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 BOOKS. 
 I. N. \W. 
 ;ton, d c. 
 
 THE LIBRARY 
 
 OF 
 
 THE UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW
 
 hyi^
 
 THE ELEMENTS OF THE LAW 
 
 OP 
 
 NEGOTLIBLE LNSTRUMENTS 
 
 BY 
 
 JOHIS" W. DAIS-IEL, 
 
 OF THE LYNCHBURG (VA.) BAR, AND 
 AUTHOR OF "DANIEL ON NEGOTIABLE INSTRUMENTS." 
 
 AND 
 
 CHAS. A. DOUGLASS, 
 
 OP THE BAR OP THE DISTRICT OF COLUMBIA, AND 
 
 PROFESSOR OF THE LAW OF NEGOTIABLE INSTRUMENTS IN 
 
 GEORGETOWN UNIVERSITY, OF WASHINGTON, D. C. 
 
 NEW YORK: 
 
 BAKER, VOORHIS & COMPAXY, 
 1903.
 
 Copyright, 1903, 
 By baker, VOORHIS & COMPANY. 
 
 T 
 
 J. B. LYON COMPANY 
 
 PRINTERS AND BINDERS 
 
 ALBANY, N. Y.
 
 V) 
 
 rv 
 
 V 
 
 TO 
 
 JOSEPH J. DARLINGTON, LL. D., 
 
 OF THE BAR OB" THE DISTRICT OF COLUMBIA, 
 
 PROFESSOR, AUTHOR, AND LAAVYER, WHOSE GREAT ABILITY AXD EXALTED CUAKAC- 
 
 TER HAVE GIVEN ADDED 81'LENDOR TO THE PROFESSION OF THE LAW, 
 
 AND WHOSE GENEROUS AID TO STRUGGLING YOUNG LAWYERS 
 
 HAS MADE HIM AN INSPIRATION, 
 
 THIS WORK 
 
 IS, WITH HIS PERMISSION, 
 
 RESPECTFULLY INSCRIBED 
 
 BY THE AUTHORS. 
 
 729409
 
 PREFACE. 
 
 The work which follows is designed exclusively for the 
 use of students and instructors in law schools, and it has, 
 therefore, been styled " The Elements of the Law of Nego- 
 tiable Instiniments." 
 
 It is based upon the treatise known as " Daniel on Nego- 
 tiable Instruments," and upon the lectures of Mr. Douglass 
 on that subject in the Law Department of Georgetown (D. C.) 
 University. To the student should be vouchsafed the sub- 
 stantial benefits, on the one hand, of the point of view and 
 professional experience of the lawyer-author, and on the 
 other, of the lecturer's practical appreciiation of the usual 
 difficulties attendant upon the study of the law. These were 
 the considerations in mind in determining upon the com- 
 bined sources of infomiation and material for a student's 
 text-book on this important subject. 
 
 Wherever it has been practicable, free use has been made 
 of the text of '' Daniel on Negotiable Instruments," includ- 
 ing both language and arrangement, but pains have been 
 taken to regulate and apportion the space devoted to the 
 many sub-subjects, as their relative importance, from the 
 standpoint of the student, requires. In addition, the sub- 
 ject-matter has been rearranged and transposed and new mat- 
 ter added ; in fine, everything has been done that seemed to 
 the authors necessary' to make the subject both intelligible 
 and attractive. The volume contains no notes except tlie bare 
 citation of the cases, and they have been principally confined 
 to, and carefully selected from, well-considered cases cited 
 in " Daniel on Negotiable Instruments." \Miile it is a 
 radical departure from ]u-evailing methods, it has been 
 esteemed wise to omit in the notes themselves all comments 
 upon, and reference to, the scope and effect of the decisions, 
 
 [vl
 
 VI I'KEl'ACE. 
 
 whether in hannony, or in oonilict, with the text, preferring 
 to include in the body of the work, itself all that is thought 
 necessary for the student's use. ' The experience, both of 
 teacher and piiiuK amply establishes the fact that comments 
 and statements in the notes, especially when in conflict with, 
 or in modification of, the law as announced in the text, are 
 well-springs of confusion, doubt, and difficulty to the student, 
 however faithfully and diligently he may seek to master the 
 subject in hand. 
 
 The "" Xew Negotiable Instruments Law," first enacted by 
 the Legislature of New York on May 19, 1897, has become 
 law in nineteen States, and also in the Territory of Arizona 
 and the District of Columbia, and it is destined in the near 
 future to l)e the uniform law throughout the United States. 
 The full text of this important statute will be found in an 
 appendix to this work. 
 
 We are indebted to Mr. E. B. Sherrill, of the Bar of the 
 District of Columbia, for the carefully prepared index and 
 table of cases, and also for valuable assistance given in the 
 preparation of the text. 
 
 JNO. W. DANIEL. 
 CHAS. A. DOUGLASS. 
 
 Washingtox, D. C, December 1, 1902.
 
 TABLE OF CONTENTS. 
 
 BOOIv I. 
 
 THE MAKING OF THE INSTRUMENT. 
 
 CHAPTER I. 
 
 Nature, History, and Uses of Negotiable Instruments 1 
 
 Section I. Natnio, origin, ami liistoiy of bills and notes 1 
 
 II. Foreign and inland bills 5 
 
 III. The effect of a bill of exchange — when it is an assign- 
 ment, and when not i 
 
 CHAPTER II. 
 
 Different Kinds of Negotiable Instruments 11 
 
 Section I. Definitions of bills of exchange and promissory notes, 
 
 and the differences between them 11 
 
 II. Coupon bonds 1- 
 
 III. Bank notes li'> 
 
 IV. Certificates of deposit l'» 
 
 V. Checks 1' 
 
 VI. Bills of credit 25 
 
 VII. Quasi-negotiable instruments 26 
 
 CHAPTER III. 
 
 Formal Requisites of Negotiable Instruments 34 
 
 Section I. Difference in structure between bills of exchange and 
 
 promissory notes 34 
 
 II. Formality in respect to style and material 34 
 
 , III. The several parts of a foreign bill called a set 3!) 
 
 IV. Stamps upon negotiable instruments 40 
 
 V. Delivery 42 
 
 CHAPTER IV. 
 
 Essential Requisites of Negotiable In.struments 44 
 
 Section I. The paper must be open — that is. unsealed 44 
 
 II. Certainty as to engagement to pay 4.^ 
 
 III. Certainty as to fad of payment 40 
 
 IV. Certainty as to amount to be paid ">1 
 
 V. Certainty as to the medium of payment, which must be 
 
 only in money o3 
 
 [viil
 
 Vlii TABLE OF CONTENTS. 
 
 CHAPTER V. 
 
 Page; 
 
 Consideration of Negotiable Instruments 5G 
 
 Section 1. Consideration pvesumed 5G 
 
 II. Good and valuable considerations 57 
 
 111. Wliat are illegal considerations 62 
 
 IV. By what law legality of consideration is determined. . 65 
 V. Partial want, failure, or illegality of consideration. ... 66 
 VI. Between what parties the consideration is open to in- 
 quiry 69 
 
 VII. How illegality may be purged — renewal of instru- 
 ment 71 
 
 BOOK IL 
 
 PARTIES TO THE INSTRUMENT. 
 
 CHAPTER VI. 
 
 Persons Qualified 73 
 
 Section I. Fiduciaries as parties 73 
 
 II. Agents as parties 75 
 
 III. Partners as parties 83 
 
 IV. Corporations as parties 88 
 
 CHAPTER VII. 
 
 Persons Partially or Wholly Disqualified 94 
 
 Section I. Infants 94 
 
 II. Lunatics, imbeciles and drunkards 98 
 
 III. Alien enemies 101 
 
 IV. Married women 103 
 
 BOOK III 
 
 THE NEGOTIATION OF THE INSTRUMENT. 
 
 CHAPTER VIII. 
 
 Transfer by Delivery and Indorsement 106 
 
 Section I. Nature of, and liabilities created by, contract of in- 
 dorsement 107 
 
 II. Form and varieties of indorsement Ill
 
 TABLE OF CONTENTS. IX 
 
 CHAPTER IX. 
 
 Page. 
 
 Nature axd Rights of a BoxNA Fide Holder 122 
 
 Section T. Tho ri«Thl.s of a ho)ia fide liolder 1-- 
 
 11. Exceptions to, and niodilUations of, the rule as to the 
 
 rights of a bona fide holder 1 :i7 
 
 III. What constitutes a bona fide holder H- 
 
 BOOK IV. 
 
 FIXING LIABILITY TO PAY THE INSTRUMENT. 
 
 CHAPTER X. 
 
 Presentment for Acceptance, and Acceptance 162 
 
 Section I. What bills of exchan'rc should be presented for accept- 
 ance 162 
 
 II. By and to whom presentment should be made lO.j 
 
 III. The place where, and how, presentment should be 
 
 made 16" 
 
 IV. Time of presentment for acceptance 16!^ 
 
 V. The nature and effect of acceptance 172 
 
 VI. By whom, and when, bills should be accepted 178 
 
 VII. Form and varieties of acceptance 188 
 
 CHAPTER XI. 
 Presentment fob Payment 199 
 
 Section I. By and to whom the instrument should be presented. . 200 
 
 II, Time of presentment 20;') 
 
 III. Place of presentment 210 
 
 IV. Mode of presentment 219 
 
 CHAPTER XII. 
 Protest and Notice of Dishonor 225 
 
 Section I. Protest 22.5 
 
 II. Notice of dishonor 234 
 
 CHAPTER XIII. 
 
 Circumstances op a General or Special Nature Which Excuse 
 
 Want of Presentment, Protest, or Notice of Dishonor. . . . 254 
 
 Section T. Circumstances of a general nature which excuse want 
 
 of presentment, protest, or notice of dishonor 254 
 
 II. Circumstances of a special nature which either excuse 
 want of, or show absence of a right to require, pre- 
 sentment, protest, or notice of dishonor 257
 
 TABLE OF CONTENTS. 
 
 BOOK V. 
 
 ACTIONS AND DEFENSES. 
 
 CHAPTER XIV. 
 
 Page. 
 
 Actions 268 
 
 Section I. Who may sue 2G8 
 
 II. \Vho may be sued 275 
 
 ITT. WlH>n liiilit of aetion accrues 277 
 
 IV. Wlicu right of action expires 280 
 
 CHAPTER XV. 
 
 Defenses 282 
 
 Section I. Tlie defendant did not make the instrument 283 
 
 II. The contract sued upo-i is in law nonenforceable .303 
 
 ITT. The phuntiff is not entitled to sue 30.5 
 
 IV. The obligation created has been discharged 306 
 
 V. Statute of limitations 328 
 
 CHAPTER XVI. 
 
 Conflict of Laws 330 
 
 Section I. Lex loci contractus 332 
 
 II. Lex fori 339
 
 TABLE OF CASES CITED. 
 
 [The references are to paragraphs marked §.] 
 
 Abel r. Sutton, 141. 
 Aciair l\ Lenox, 455. 
 Adams r. llackensack Co., 464. 
 
 V. Lcland, 397. 
 
 r. Otterback, 328. 
 
 V. Keevcs, 452. 
 
 r. Wilson, GO. 
 
 f. \^■ol•dk'y, 310. 
 
 c. Wright, 378. 
 Administrators of 13eaman v. Rus- 
 sell, 443. 
 Agnol (". Kllis, 277. 
 Agncw r. Aldeii, 108. 
 
 i\ Bank of Gettysburg, 259. 
 Agricultural Bank r. Burr, 4o. 
 .Alderson r. Langdale. 441. 
 Alleman r. Wheeler, 423. 
 Allen r. Bratton. 49/. 
 
 V. Frazee, 214. 
 
 L\ Hearn. 102. 
 
 V. iVIereliants' Bank, 132. 
 
 r. Newburv. 405. 
 
 r. O'Donald, 478. 
 
 r. Pegrani, 45. 
 
 (7. Suvdam. 257, 268. 
 
 V. Tate. 399. 
 Alston V. Hartnian, 402. 
 Amherst Academy r. Cowles, 405. 
 Ammidown r. Woodman, 330. 
 Aniner r. Clark, 7. 
 Anderson r. Bullock, 73. 
 
 r. De Soer. 12. 
 
 r. Drake, 264, 397. 
 
 V. Hick, 300. 306. 
 
 r. Warne. 477. 
 Andover Bank r. Crafton, 222. 
 Andovor Savings IJank v. Adams, 
 
 401. 
 Andressen r. First Nat. Bank, 299. 
 Andrews r. Franklin, 78. 
 
 r. Pond, 245, 486, 490. 
 Androscoggin Bank r. Kimball, 62. 
 Anirel r. McClellan, 151. 
 Angle r. Ins. Co., 245, 251, 427, 432, 
 
 441. 
 
 Anketel v. Converse, 459. 
 Annville Nat. Bank r. Kettering, 
 
 389. 
 Ansel r. Olson. 333. 
 Appleby r. Beddolph, 77. 
 Applegarth r. Abbott, 355. 
 
 L\ Robinson, 108. 
 Arents r. Commonwealth, 195. 
 Armeiidiaz v. Sana, 486. 
 Armitt V. Breame, 62. 
 Armstrong, In re, 297. 
 Armstrong v. Am. K.k. Bank, 7. 
 
 r. Chadwick, 389. 
 
 r. Toler, 485. 
 Arnold r. Dresser, 319. 
 
 V. Jones, 437. 
 
 V. Kinloch, 354. 
 
 V. Potter, 491. 
 
 V. Sprague, 128. 
 
 r. Stackpolc, 128. 
 Arnot r. Erie Railway Co.. 145. 
 Ashurst r. Royal Bank. 203. 
 Aspi.iwall r. Wake, 275. 
 Atkins r. Owen, 467. 
 Atkinson r. Hawden. 441. 
 Atlanta Nat. Bank r. Douglass. 478. 
 Attornev-General r. CnnUnental 
 
 Life Ins. Co., 14. 
 Attwood r. ]Munnings, 283. 
 
 r. Weeden, 102. 
 Atwood r. Crowdie. 98. 
 Auerbach r. Pritchett, 86. 
 Averett's Admr. v. Booker, 91. 92. 
 Aymar r. Beers, 395. 
 
 v. Sheldon. 500. 
 
 Bachellor r. Priest, 268, 312, 314, 
 
 450, 454. 
 Backus V. Shepherd. 389. 
 Bailey r. Dozier. 347. 
 
 r. Raw'lev, 124. 
 
 r. Taylor. 443. 
 Bain r. Whitehaven, etc.. R. R. Co., 
 
 496. 
 Baker r. Stackpole, 460. 
 
 [xi]
 
 XI 1 
 
 TABLE OF CASES. 
 
 [References are to 
 parayruplis' marked §.] 
 
 Baldwin r. Farnswovth, 33G. 
 15a 1 hud r. Ins. Co., 430. 
 Ballingalls r. Gloster, 174, 413. 
 Balnie r. Wanibaugh, 131. 
 Banbury r. Lissctt, 30S. 
 Bank r. C'ason, 248. 
 
 c. Mailan. 400. 
 
 r. Pittell, 38. 
 Bank of Alexandria v. Swan, 362, 
 
 378. 
 Bank of America r. Indiana Bank- 
 ing Co., 40. 
 Bank of British North America v. 
 
 Ellis. 1)3, 171. 
 Bank of Columbia r. Lawrence, 373, 
 375. 
 
 r. Patterson's Admr., 146. 
 Bank of Commerce v. Bogy, 11. 
 
 r. Union Bank, 280, 431. 
 Bank of Commonwealth c. Curry, 
 285. 
 
 V. Mudgett, 335, 357. 
 Bank of England v. Newman, 316. 
 Bank of Fayetteville r. Lutterloh, 
 
 337. 
 Bank of Fort Madison v. Alden. 
 
 134, 138. 
 Bank of Genesee v. Patchin Bank, 
 
 437. 
 Bank of Geneva V. Howlett, 372, 
 
 370. 
 Bank of Hamburg v. Flynn, 252. 
 Bank of Ireland v. Archer, 303. 
 Hank of Kansas City v. Mills, 314. 
 Bank of Kentucky v. Pursley, 348. 
 Bank of Louisyiflo r. Ellery, 286. 
 Bank of Metropolis r. New England 
 
 Bank, 98. 
 Bank of Missouri r. Vaughn, 366. 
 Bank of Mobile v. Brunn, 32. 
 Bank of Ohio Valley v. Lockwood, 
 
 430, 438. 
 Bank of Old Dominion v. McVeigh, 
 
 360, 301. 
 Bank of Republic v. Millard, 40. 
 Bank of Sandusky v. Scoville, 100. 
 Bank of Troy ;;. Topping, 118. 
 Bank of United States v. Bank of 
 Georgia. 451. 
 
 r. Bierne, 369. 
 
 V. Carneal, 364, 375, 379. 
 
 V. Dandridge, 146. 
 
 V. Donally. 403, 496. 
 
 r. Goddard. 365. 366. 
 
 V. Hatch, 475, 476. 
 
 V. Norwood. 373. 
 
 r. United States, 314, 454, 492. 
 
 Bank of Utica r. Smith, 259, 312, 
 314, 342, 454. 
 
 V. Wager, 326. 
 Bank of V'ergennes V. Cameron, 339, 
 
 353, 356. 
 Bank of Washington v. Triplett, 
 
 257, 258, 326, 500. 
 Barber v. Gingell, 125. 
 Barclay V. Bailey, 323. 
 Baring v. Clark, 293. 
 Barker r. Barker, 94. 
 
 V. Hall, 373. 
 Barnes v. Gorman, 89. 
 
 V. McMullins, 474. 
 
 17. Reynolds, 371. 
 Barnet v. Smith, 38, 298. 
 Barnett v. OfTerman, 110. 
 IJarr v. Boyer, 478. 
 Barrett v. Barrett, 494. 
 Barring V. Clark, 453. 
 Barry v. Clark, 294. 
 
 V. Morse, 389. 
 Bartlett v. Benson, 203. 
 
 V. Robinson, 376. 
 Bass V. Clive, 275. 
 Bassenhorst r. Wilby, 325. 
 Bassett v. Ayery, 201. 
 
 V. Haines, 298. 
 Batchelder v. White, 431. 
 Bathe v. Taylor, 429. 
 Baumgarden i\ Reeves, 393. 
 Bausmann r. Kelley, 313. 
 Baxter v. Earl of Portsmouth, 160. 
 
 V. Little, 204. 
 
 V. Stewart, 89. 
 Bay V. Frazer, 57. 
 Bavlev's Adnir. r. Chubb, 276. 
 Bealls V. Peck, 371. 
 Bean v. Briggs, 499. 
 Beckerdike v. Bollman, 387. 
 Beckwith v. Smitli, 377. 
 Beeching v. Glower, 338. 
 Beeler v. Frost, 389. 
 Beeman v. Duck, 278, 422. 
 Beenel v. Tourniillon, 376. 
 Begbi V. Levi, 288. 
 Belknap r. Nat. Bank, 420. 
 Bell V. First Nat. Bank, 257, 326, 
 332. 
 
 v. Hagerstown Bank, 374, 376. 
 
 v. Morrison, 481. 
 
 V. Norwood, 409. 
 Bellamy v. Majoribanks, 33. 
 Bellasis V. Hester, 287. 
 Bellows V. Lovell, 478, 
 Bonder ?". Been, 468. 
 I'.cnham r. Bishop, 155.
 
 [Rfffrnirrs arc to 
 pdiiKjrcujhfi iiiiirlad §.J 
 
 TAliLE OI-' CASES. 
 
 Mil 
 
 Benjamin r. McConnell, 4G9. 
 Bennell c. Wilder, 459. 
 Best V. Crall, '234. 
 Bettis r. Bristol, 122. 
 Beverly's Case, 157. 
 Bigelow r. Benedict, 102. 
 
 V. Colton, 190. 
 
 r. Heninger, 255. 
 
 r. Stephens, 431. 
 Biggs V. Piper, U2. 
 Billgerry i: Branch, 20, 1G4, 384. 
 Billing c. Devaux, 299, 302. 
 Billings c. Collins, 238. 
 Binney r. Plumley, 70. 
 Bird V. Daggett, 145. 
 
 r. Le Blanc, 389. 
 Bissell c. Adams, 481. 
 
 ■c. Jeffersonville, 129. 
 Black r. Ward, 88. 
 
 r. Zacharie. 47. 
 Blackman r. Green, 168. 
 
 r. Lehman, 77. 
 Blackstone Bank r. Hill, 459. 
 Blair r. Bank of Tennessee, 437, 
 475. 
 
 V. Carpenter, 459. 
 Blair & Hoge c. Wilson, 28, 384, 
 
 385 
 Blake v. McMillen, 319. 
 Blakely v. Grant, 372. 
 Blakey r. Johnson, 439. 
 Blanc V. Mutual Nat. Bank, 132. 
 Bliss r. Houghton, 498. 
 Boalt v. Brown, 431. 
 Bobe c. Stickney, 459. 
 Boehm v. Garcias, 306. 
 Bogarth v. Breedlove, 432. 
 Bogert V. Hertell, 119. 
 Bolton r. Dugdale, 82. 
 Bond c. Farnham, 396. 
 Bonnian i;. Van Kuren, 248. 
 Booe V. Mix, 154. 
 Booth V. Powers, 436, 440, 441. 
 Borden r. Clark, 186. 
 Borough r. Perkins, 347. 
 liosanquet r. Dudman, 98. 
 Bosch r. Cassing, 244. 
 Boss r. Hewitt, 243. 
 Boucholl r. Clary, 151. 
 Bouglmer r. flayer, 102. 
 Bowen v. Newell, 30, 34. 
 Bowerbank i\ Monteiro, 59, 310. 
 Bowie V. Duvall, 314, 405. 
 Bnwker r. Childs, 408. 
 Bowman c. Hiller, 177. 
 
 r. McChesnev. 321. 
 
 Bowman r. Wood, 398,_403. 
 Bowycr r. Bampton, 170. 
 Boyce v. Edwards, 304. 
 
 I". Geyer, 253. 
 
 V. Tabb, 105, 106. 
 Boyd V. Cleveland, 389. 
 
 V. Johnson, 118. 
 
 r. McCann. 111. 
 
 V. Nasiiiith, 36. 
 
 V, Plumb, 138. 
 
 t\ Vanderkamp. 255. 
 Boyd's Admrs. r. City Sav. Bank, 
 
 318, 3(10, 371, 374. 
 Bracton v. Willing, 272. 
 Bradlee r. Boston Glass Co., 126. 
 Bradley r. Ballard, 148. 
 
 r.'Nortliern Bank, 316, 348, 
 357. 
 Brage r. Netter, 469. 
 Braham v. Bubb, 77. 
 P.railesford v. Williams, 365. 
 Hraithwaite r. Gardner, 275. 
 liraley v. Buchanan, 370. 
 I'.ranch State Bank v. McLeran, 319. 
 Bray r. Hadwen, 380. 
 Brcnnan r. ilerchants' Bank, 454. 
 Brent's Exrs. r. Bank of Metropolis, 
 
 333. 
 Bresenthal v. Williams, 75. 
 Brewster i\ Sime, 51. 
 
 V. Williams, 80. 
 Bridgeport Bank r. Dyer, 268. 
 Bridges r. Berry, 359. 
 Briggs r. Bovd, 249. 
 
 r. Cent. 'Nat. Bank, 132. 
 
 v. Merrill, 2.'J8. 
 Brigham v. Potter, 109. 
 Brill v. T'uttle, 14. 
 Briscoe i\ Bank of Kentucky, 42. 
 Bristol r. Warner, 78. 
 Britain v. Dierker, 429. 
 
 r. Nichols, 337. 
 British Linen Co. r. Drummond, 
 
 495. 
 Bromwick V. Lloyd, 5. 
 Brooks r. Hanover Nat. Bank, 55. 
 
 r. Mitchell. 324. 
 Broughton r. M. & S. Water Works, 
 
 143. 
 Brown, In re, 29. 
 Brown r. Baker, 127. 
 
 r. Bank of Abington, 373. 
 
 r. Barry, 346. 
 
 r. Butchers, etc.. Bank, 58. 
 
 V. Calloway, 236. 
 
 r. Chancellor, 327.
 
 XIV 
 
 TAliJ-K OF CASES. 
 
 [nifcirncvs arc to 
 pariKjraphfi marked §.] 
 
 Brown r. Dickinson, 1S7. 
 
 r. Hull. 171. 
 
 c. Jones, 431. 
 
 r. Liuv. 459. 
 
 r. MDermott. 316. 
 
 r. Reed. 439. 
 
 i: 8pon\)id, 00. 
 Browne r. Coit^ 308. 
 Bruce r. Lj'tlc, 307. 
 
 r. Westcott, 436. 
 Brush r. Reeves, 108. 
 Buchanan r. Findley. 248. 
 Buck r. Smiley, 479. 
 Buckner r. Finley, 7. 
 
 r. Say re, 11. 
 Buckston r. Jones. 317. 
 Bulger r. Roche. 495. 
 Bull r. Sims, 149. 
 Burba nk r. Beach, 353. 
 Burbridgo c Planners. 455. 456. 
 Burchtit^d r. :Moore, 430. 
 Burgess r. Northern Bank of Ken- 
 tucky. 4-24. 
 r. Vreeland, 379. 
 Burko r. McKay, 347, 348. 
 Burleigh r. Stott, 482. 
 Burlingame r. Foster, 376. 
 Burmester v. Barron, 376. 
 Burnes r. Scott, 60. 111. 
 Burrough r. ;Moss, 400. 
 Burrow r. Zapp, 196. 
 Burrows r. Jemimo, 487. 
 Burton r. Slaughter, 450. 
 Bush V. Baldrey. 458. 
 
 r. Brown. 224. 
 Bussard r. Levering. 330, 375. 
 Butler V. Duval. 370. 
 
 V. Ganibs. 478. 
 Byrd v. llolloway. 118. 
 Byrom v. Thompson, 436. 
 
 Cabot Bank r. Morton, 424. 
 
 r. Warner. 374. 
 Cahoun r. Mooie. 119. 
 Caldwell r. Cassidy, 464. 
 
 r. Evans, 131. 
 
 T. Lawrence. 398. 
 Calhoun r. Calhoun, 106. 
 Callahan r. Bank of Kentucky, 172, 
 
 371. 
 Calvin v. Sterrett, 114. 
 Camden v. Doremus, 343. 
 Cammer r. Harrison. 411. 
 Campbell r. Alford, 52. 
 
 r. French, 327. 
 
 r. IVttengill. 308. 
 Canal Bank v. Bank of Albany, 425. 
 
 Cannon r. Grigsby, 438. 
 Capital City Ins. Co. r. Quinn, 272. 
 Cardwell r. Allen, 307. 
 Carlton v. \\'oods, 109. 
 Carpenter r. .McLaughlin, 4S1. 
 r. JMurphee, 469. 
 V. Northboro Nat. Bank, 426. 
 Carr l\ Nat. Sec. Bank, 38. 
 Carroway r. Odeneal, 468. 
 Carruthers r. West, 205. 
 Carson r. Russell, 257. 
 Carter r. Burley, 348. 
 V. Flower, 268. 
 V. L'nion Bank, 376 . 
 V. Whallcy, 140. 
 V. Zemblin, 409. 
 Cartwright r. Williams, 169. 
 Cashnian r. llapies, 82. 
 Castle V. Rickley, 196. 
 Catskill Bank v. Stall, 284. 
 Caulkins v. Whisler, 222. 
 Caunt r. Thompson, 360. 
 Caverick r. Vickery, 187. 
 Caviness v. Rushton, 76. 
 Cayuga County Bank r. Bennett, 
 371. 
 V. Hunt. 267, 319, 378. 
 Central Bank r. Allen, 393, 397. 
 Challiss i: McCrum, 173. 
 Chalmers v. Lanion, 201. 
 
 V. McMurdo, 188. 
 Chamberlin r. White, 468. 
 Champion v. Gordon, 31. 
 Chandler v. Johnson, 103. 
 Chanoine V. Fowler, 348. 
 r'hapman v. Black, 115. 
 V. Keene, 305. 
 r. Lipsconibe, 392. 
 V. Robinson, 491. 
 V. Rose, 210. 
 r. Wright. 77. 
 Chappelear r. Martin, 454. 
 Chappie v. Durston, 414. 
 Charles v. Marsden, 205, 216. 
 Charlton v. Reed. 79. 
 Chase V. Taylor, 355. 
 Chafers r. Bell. 351. 
 Chautauqua County Bank v. Davis, 
 
 314. 
 Cheek r. Roper. 260. 
 Cheney 7'. Cooper, 221. 
 Chester Glass Co. v. Dewey. 45. 
 
 r. Dorr. 242. 
 Chick ?:. PilNbury. 379. 
 Chicopee Batd< r." Chapin. 236. 
 
 V. Philadelphia Bank, 71, 342. 
 Chipman v. Tucker, 212.
 
 [References are to 
 paru(jr(ii)hs- iniirkcd §.] 
 
 TABLE OF CASES. 
 
 XV 
 
 Chouteau r. Allen, 232. 
 
 r. Webster, 37 (i. 
 Christian v. Keen, 272, 
 Christie v. Pearl, 280. 
 Christmas v. Russell, 13. 
 Church V. Clark, 322. 
 
 V. Howard, 432. 
 Citizens' Hank r. J^ay, 450. 
 City of Aurora r. West, 23. 
 City of Fort Scott r. Schulenberg, 
 
 ■ 415. 
 City of Willianisport i\ Common- 
 wealth, 147. 
 Clallin r. Briant. 109. 
 
 i\ Farmers' I?ank, 38. 
 
 V. WMlson, 185. 
 Clark V. Caldwell. 101. 
 
 V. Connor, 4!)5. 
 
 V. Peace. 113. 
 
 r. Thayer, 248. 
 Clark Nat. Bank i'. Bank of Albion, 
 
 38. 
 Clarke r. Percival, 82. 
 
 V. Russell, 346. 
 
 r. Sigourney, 70. 
 Clason r. Bailey, 58. 
 Claxon r. Demaree. 01, 107. 
 Clay County v. Oakley, 308. 
 Clayton r. Gosling, 415. 
 Cleveland v. Sherman, 55. 
 Clewer r. Wjmn. 200. 
 Cline r. Templet on. 112. 
 Clippinger v. Hepbaugh, 99. 
 Clode r. Bailev, 370. 
 Clopton V. Elkin, 109. 
 Closson l\ Stearns, 58. 
 Clute V. Small, 438. 
 Coates r. Doran, 40. 
 Coburn r. Webb, 431. 
 Cocke r. Dickens, 402. 
 Coggill r. American Ex. Bank, 278. 
 Cole V. Penncll, 155. 
 
 V. W^ithers, 459. 
 Coleman v. Ewing, 410. 
 
 V. Forbes, 481. 
 
 V. Saver. 327. 330. 
 Colli-ns r.' Gilbert. 200. 
 
 r. Tiotter. 321. 
 Colorado Nat. Bank v. Boettcher, 
 
 299. 
 Commercial Bank r. Barksdale, 348. 
 
 V. Gove, 372. 
 
 r. King, 379. 
 Commercial Nat. Bank r. Proctor, 
 
 141. 
 Commissioners v. Chandler, 23. 
 
 Commonwealth r. Chandler, 419. 
 
 V. Foster, 419. 
 
 V. Haas, 478. 
 
 r. Johnson, 103. 
 
 V. Sankey, 420. 
 Compton V. Blair, 387. 
 Condon i\ Pearce, 183. 
 Conn V. ('o!)urn, 152. 
 
 V. Thornton. 78. 
 Connelly c. McKean, 287. 
 Conner r. Clark, 120, 200. 
 Conrad r. Fisher, 55. 
 Continental Nat. Bank v. Townsend, 
 235. 
 
 V. W^eems, 185. 
 Cook r. Baldwin, 298. 
 
 V. Lillo, 105. 
 
 V. Moffat, 488. 
 
 V. Satterlee. 89. 
 
 V. Wolfendale. 308. 
 Cooke V. Branch Bank, 137. 
 
 r. Colehan, 78. 
 
 r. State Nat. Bank, 38. 
 Cookendorfer v. Preston, 328. 
 Cooley r. Rose, 413. 
 Coolidge V. Payson, 304. 
 
 V. Ruggles. 77. 
 Cooper V. .\lever. 275. 278. 
 Coore r. Callawav. 283. 
 Copp r. McDugall, 172, 391. 
 Coppmann r. Bank of Kentucky, 
 
 4r)5. 
 Corbet t r. Hughes. 457. 
 Cornthwaite r. First Nat. Bank. 
 
 117. 
 Cota v. Buck, 78. 
 Cotes r. Davis. 166. 
 Couch r. Meeker, 212. 
 Cowan r. Halleck, 76. 
 Cowee V. Cornell. 09. 
 Cowie V. Halsall. 430. 
 Cowing r. Altman. 39. 02. 
 Cowperthwaite v. Shenield. 13. 366. 
 Cowton r. Wickersham. 275. 
 Cox r. Coleman. 300. 
 
 V. Nat. Bank. 270. 311, 333. 
 
 V. Troy. 285. 
 Cragin r. Lovell, 127. 
 Craig V. State of Missouri. 43. 
 Cramlinsrton r. Evans, 454. 
 Crami)t..n r. Perkins. 200. 246. 
 Crandall r. Schroeppel. 339. 
 Crandell r. Vickery. 247. 
 Cranston r. Goss. 70. 
 Crawford r. West Side Bank. 429. 
 Crawshav v. Collins, 141.
 
 XVI 
 
 TABLE OF CASES. 
 
 [References arc to 
 Ijurdi/raplis marked §.J 
 
 Cregler r. Durham, 140. 
 Creswell r. Laiiahan, 140. 
 dim I*, ytarkwi'iilher, 415. 
 Cromwell r. County of Sac, 217. 
 
 r. Hynson, 317, 372, 
 Crocker r. HolnieSj 79. 
 Crookshank c. Rose, 115. 
 Crosby r. Roub, ISO. 
 Crossan v. May, 214. 
 Crosse r. Smith, 308. 
 Crossly r. Ham, 245. 
 Crostluvait r. Ross, 137. 
 Crowley r. Barry, 319. 
 Cruger r. Armstrong, 29. 
 Crutchley r. Clarence, 404. 
 Cumber c. Wane, 408. 
 Cumberland Rank r. Hall, 433. 
 Curry v. Reynolds, 282. 
 Curtis v. Leavitt, 144. 
 Cushman r. Thayer Mfg. Co., 48. 
 Cutts V. Perkins, 13, 280. 
 
 Da Costa r. .Jones, 102. 
 Daggett V. Whiting, 248. 
 Dair v. U. S., 213. 
 Dakin r. Graves, 356. 
 Dale v. Pope, GO. 
 Daniels v. Wilson, 217. 
 Darbishire v. Parker, 378, 381. 
 Darey v. .Jones, 375. 
 Darwin v. Rippey, 432. 
 Davis V. Allen, 140. 
 
 V. Briggs, 399. 
 
 r. Clarke, 282. 
 
 V. Clemson, 491. 
 
 17. Coleman, 433. 
 
 V. Henry, 431. 
 
 V. Miller. 242. 453, 455, 474. 
 
 V. Smith, 139. 
 
 V. Thomas, 214. 
 
 r. Wait. 247. 
 Davis Machine Co. v. Best, 251. 
 Davison r. City Bank, 457. 
 Dean r. Newhall, 470. 
 
 t\ Richmond, 400. 
 Deardorf r. Thacher, 137. 
 Deck V. Works, 196. 
 Deener v. Brown, 31. 
 Dehers r. Harriott, 314, 327. 
 De T>a Vega r. Viatina, 493, 496. 
 Deminds r. Kirkman, 379. 
 Demuth r. Cutler, 403. 
 Dennie v. Walker, 412. 
 Dennistoun r. Stewart, 351, 362. 
 Dennv r. Dana. 109. 
 Derg'f. Abbott, 393. 
 
 Desesse r. Napier, 12. 
 Desha r. Stewart, 271. 
 Devendorf r. West Virginia 0. & 
 
 O. L. Co., 100. 
 Devries v. Shumate, 09. 
 Dewey v. Cochran, 477. 
 
 V. Reed, 431. 
 De Wolf V. .lolinson, 491. 
 Dews V. Eastham, 411. 
 Dexter Sav. Bank r. Copeland, 113. 
 Dick V. Lever ick, 278. 
 Dicken r. Hall, 374, 376. 
 Dickens v. Beal, 355, 387. 
 Dickerson v. Davis, 157. 
 
 V. Turner, 357. 
 Dickinson r. Dickinson, 140. 
 Dietz V. Harder, 431. 
 Disher v. Disher, 69. 
 District of Columbia v. Cornell, 147, 
 
 245. 
 Ditchburn r. Goldsmith, 102. 
 Dixon V. Nuttall, 327. 
 Dobbins L\ Oberman, 16. 
 Dodge v. Nat. Ex. Bank, 33. 
 Dollfus v. Frosch, 124. 
 Donegan v. Wood, 326. 
 Donnell v. Sav. Bank, 387. 
 Donner v. Remer, 372. 
 Doty V. Knox County Bank, 109. 
 Doubleday r. Kress, 454. 
 Dougherty r. Deeney, 449. 
 Dow V. Updike, 84. 
 Dowdy v. McClellan, 106. 
 Do wee r. Schutt, 214. 
 Downer v. Reed, 214. 
 Downes r. Cliurch, 66. 
 Downs V. Webster, 61. 
 Drage c. Netter, 470. 
 Drake v. Markle, 27. 
 
 V. Rogers, 62. 
 Draper v. Hill, 468. 
 
 V. Jackson, 400. 
 
 V. Rice, 454. 
 
 V. Wood, 434. 
 Drayton v. Dale, 276. 
 Dresser r. M. & I. R. R. Co., 233, 
 
 247. 
 Drexler v. Smith, 428, 474- 
 Drovers' Nat. Bank v. Provision 
 
 Co.. 340. 
 Dubois f. Mason, 100. 
 Dubreys v. F'armer. 328. 
 Dufour V. Oxenden, 301. 
 Dugan V. United States, 314, 453, 
 
 454.
 
 [References arc to 
 puruyraijlts nnirktd §.j 
 
 TABLE OF CASES. 
 
 XVll 
 
 Duggan V. King, 395. 
 
 Duke of Norfolk v. Howard, 339. 
 
 Dumont r. Pope, 35(j. 
 
 V. Williamson, 173. 
 Duncan r. AlcCullough, 397. 
 
 V. Pope, 213. 
 Duncan & Sherman v. Gilbert, 230, 
 
 249. 
 Dunn V. Ghost, 216. 
 
 V. Weston, 242. 
 Dupays v. Shepherd, 284. 
 Durdcn r. Smith, 383. 
 Durein v. Moeser, 238. 
 Durnford r. Patterson, 332. 
 Dutchess County Bank v. Ibbottson, 
 
 355. 
 Duvall V. Farmers' Bank, 389. 
 Dwight V. Newell, 119. 
 Dye V. Scott, 389. 
 
 Eagle Bank t\ Chapin, 379. 
 Earhart v. Gant, 238. 
 Easeley v. Crockford, 228. 
 Eason v. Isbell, 333. 
 Eastman r. Plumer, 449. 
 
 V. Turman, 368. 
 Easton v. Hyde, 27. 
 Eberhart v. Page, 193. 
 Ebersole v. Ridding, 455. 
 Edwards r. Thomas, 124. 
 Ehrichs v. De Mill, 14. 
 Eldred r. Mallov. 77. 
 Elford V. Teed, 267, 322. 
 Elias V. Finnegan, 237. 
 Elliott V. Nichols, 481. 
 Ellsworth r. Brewer, 408, 450. 
 
 1-. Fogg, 468. 
 Elmingor r. Drew, 108. 
 Ely V. Kilborn, 60. 
 Emery v. Hobson, 388. 
 
 V. Vinall, 70. 
 Emmett r. Tattenham, 403. 
 English r. Wall, 257. 
 Erickson l>. Roehm, 214. 
 Ernst V. Steckman, 79. 
 Erwin r. Downs. 319. 
 
 •I'. Lynn. 183. 
 Espy V. Bank of Cincinnati, 30, 31, 
 
 38. 
 Essex County Nat. Bank r. Bank of 
 
 Montreal. 37. 
 Etheridge v. Gallagher, 111. 
 
 V. Ladd. 339. 
 Evans r. Anderson, 486. 
 
 V. Gee. 171, 183. 
 
 r. Underwood, 78. 
 
 ii 
 
 Evansville Nat. Bank r. Kaufman, 
 
 93. 
 Everett r. Vendryes, 492. 
 
 Fairbanks r. Snow, 224. 
 Fairchild v. Adams, 402. 
 
 V. Holly, 460. 
 Fairley v. Koch. 461. 
 Fairlie v. Herring, 306. 
 Fall River Union Bank i'. Willard, 
 
 265, 266. 
 Fant r. Miller, 93, 486, 488. 
 Fareira v. Gabell, 102. 
 Farina v. Home, 53. 
 Faris r. Wells, 168. 
 Farmers' Bank v. Allen, 353. 
 
 V. Bank of Allen County, 36. 
 
 t\ Duvall, 320, 379. 
 
 V. Gunnell, 375, 383. 
 
 V. Reynolds, 478. 
 Farmers & Citizens' Nat. Bank v. 
 
 Noxon, 248. 
 Farmers & Mechanics' Bank v. 
 
 Butchers, etc., Bank, 38. 
 Farquhar v. Southey, 437. 
 Farwell v. Hilliard, 407. 
 Faulkner r. Bailey, 482. 
 
 r. Faulkner. 393. 
 Fay V. Smith, 431. 
 Fcnn i: Harrison, 179. 
 Fenno r. Gay, 415. 
 Field V. Tibbetts, 243. 
 Finan r. Babcock, 128. 
 First Nat. Bank v. Bensley, 306. 
 
 V. Carson, 431. 
 
 V. Clark, 297. 
 
 V. Coates, 11. 
 
 V. Day, 470. 
 
 •i;. Dubuque S. R. R., 11. 
 
 V. Gay, 84, 126. 
 
 V. Hatch, 265. 
 
 V. Hunt, 62. 
 
 V. Johns, 210. 
 
 r. Leach, 37. 
 
 V. Loyhed, 255. 
 
 t\ Owen, 322. 
 
 r. Price, 327. 
 
 V. Reno County Bank, 185. 
 
 r. Ryerson. 360. 
 
 r. Whitman. 40. 
 
 V. Wood. 374. 
 Fisher r. Beckwith, 265. 
 
 i\ Bradford. 406. 
 
 V. Evans. 372. 
 
 r. Fisher. 236. 
 
 V. Leland, 239.
 
 XVlll 
 
 TABLE OF CASES. 
 
 [References are to 
 parcKjntphs intirkril S.] 
 
 y 
 
 Fisk r. Broekett, 494. 
 
 Fiteh r. Citizens' Nat. Bank, 367. 
 
 f. ilanimer. 464. 
 
 r. Sutton, 468. 
 Flaerg r. Baldwin, 491. 
 [•"iannajran r. Brown, 469. 
 Flaum V. Wallace, liO. 
 Fleckner v. Bank of L'niteil States, 
 
 146. 
 Flctclier r. Tlioinpson, 89. 
 Flour City Nat. Bank v. Traders' 
 
 Nat. Bank. 3(i. 
 Flower v. Sadler, 111. 
 Flowers r. Billing, 58. 
 Floyd Acceptances, 222. 
 Fogarties r. State Bank, 40. 
 P'olger r. Cliase, 180, 342, 437. 
 Follain r. Dupre, 377. 
 Foot V. Sabin, 138. 
 Forbes v. Boston & L. R. R. Co., 52. 
 
 r. Cochrane, 485. 
 y^^^^.^\ Omaha Nat. Bank, 373. 
 ^ord r. Beech, 470. 
 Forman r. Wright, 113. 
 Foss r. Nutting, 494. 
 Foster r. CliiTord, 310. 
 Foulke V. Fleming, 499. 
 Fox V. Bank, 244. 
 Fraker v. Little, 426. 
 Frank r. Irgens, 91. 
 
 V. Lazier, 426. 
 
 r. Quasi, 249. 
 Franklin Bank r. Lynch, 304, 305. 
 Freeman v. Boynton, 259, 264. 
 Freeman's Bank r. Ruckman, 490. 
 Freese r. Brownell, 488, 492. 
 French r. Bank of Columbia, 387. 
 
 r. Turner, 179. 
 Frick r. Moore, 101. 
 Friend v. Wilkinson, 366. 
 Frost V. Wood, 1Z4. 
 Fuller V. Green, 437. 
 
 r. McDonald, 389. 
 Fullerton r. Bank of United States, 
 
 342, 379. 
 Fulton V. Loughlin, 135. 
 
 V. McCracken, 306. 
 
 Gaar r. Louisville Banking Co., 84. 
 Gaines v. Dorsett, 80. 
 
 r. Rhelton, 89. 
 Gale r. Walsh, 346, 347. 
 Gallery r. Prindle. 308. 
 Gallway r. Matthews, 137. 
 Gardner r. Bank of Tennessee, 357. 
 
 r. Barger, 79. 
 
 i\ National City Bank, 12. 
 
 Garnett v. Woodcock, 323. 
 
 Garrard r. Haddan, 439. 
 
 Gates V. Beecher, 259. 
 
 Gay V. Kingsley, 165. 
 
 Gazzam v. Armstrong, 290, 291, 292, 
 
 293. 
 Geill V. Jeremy, 379. 
 George r. Surry, 58. 
 Georgia Nat. Bank v. Henderson, 34. 
 Geralopulo r. Wieler, 463. 
 Gibbon v. Scott, 59. 
 Gibbs V. Howard, 498. 
 Gibson v. Carruthers, 51. 
 
 V. Smith, 306, 309. 
 Gilbert v. Dennis, 339, 362, 363. 
 
 i;. Iron Mfg. Co., 46. 
 Gill r. Morris, 114. 
 Gillespie v. Hannahan, 397. 
 Gilman r. County of Douglas, 458. 
 
 V. New 0. R. R. Co., 250. 
 Gimmi v. Cullen, 216. 
 Gist V. Lybrand, 373, 374. 
 Glasscock r. Glasscock, 92. 
 Glatt V. Fortmann, 131. 
 Glick I'. Crist, 482. 
 Glicksman v. Early, 362. 
 Glossup r. Jacob, 288. 
 Goddard r. Lyman, 399. 
 
 V. Merchants' Bank, 451. 
 Godwin v. Crowell, 103. 
 Goetz V. Bank, 111, 273. 
 Golder v. Foss^ 405. 
 Goldman r. Blum, 59. 
 Goldsmid r. Lewis County Bank, 
 
 230. 
 Goldsmith r. Blane, 372. 
 Good r. Elliott, 102. 
 
 V. Martin, 193, 194. 
 Goodale v. IToldridgo, 103. 
 Goodall V. Polhill, 293. 
 Goodman v. Harvey, 228, 245. 
 
 V. Simonds, 200. 
 Goodnow V. Warren, 371. 
 Goodsell r. Myers, 154, 155. 
 Goodwin r. American Nat. Bank, 34. 
 
 r. Jones, 494. 
 
 V. McCoy, 310. 
 
 V. Nickcrson, 61. 
 Gordon i\ Adams, 69. 
 
 r. Brown, 472. 
 
 V. Mulcher, 40. 
 
 V. Sutherland, 434. 
 Gore V. Gibson, 161. 
 (Joudy V. Gillam, 482. 
 Gough V. Findon, 69. 
 Gould r. Robson. 475. 
 
 V. Segee, 230.
 
 [Refrrrnces are to 
 jninujiuphH iiiarkiO §.J 
 
 TABLE OF CASES. 
 
 XIX 
 
 Goupy 17. Haidi'Ti, 2<)9. 
 Governor r. Daily^ 121. 
 Gowan r. Jackson, 3G9. 
 Grafton Bank c. Cox, 392. 
 Graliani v. Robertson, 415. 
 
 r. Sangston, 376. 
 Granmit'l v. Carnier, 11, 13. 
 Grand Bank v. lihuuliard, 343. 
 Granite Bank r. Ayres, 335. 
 Grant r. Sliaw, 285. 
 
 V. Wood, 77. 
 Graves r. American Ex. Bank, 451. 
 Gray r. Bank of Kentucky, 248. 
 
 r. Cooper, 153. 
 
 V. Milner, 282. 
 Great Lake r. Brown, 259. 
 Greele v. Parker, 302, 304. 
 Greeley r. Peoj)le, 23. 
 
 (•.'Thurston, 410. 
 Green r. Raymond, 309. 
 Greenough r. Rmead, 194, 259. 
 Greensdale r. Dower, 134. 
 Gregory v. Allen, 389. 
 
 r. Leigh, 117. 
 
 r. Wendell, 102. 
 Griffin r. CoiT, 320. 
 GrifVith r. Sitgreaves, 113, 477. 
 Grimstead r. Briggs, 438. 
 Griswold i\ Davis, 70. 
 
 1-. Waddington, 163. 
 Grosvenor v. Stone, 368. 
 Grover v. Grover, 3')S. 
 Grutacap r. WouUoise, 83. 
 Guidon r. Robson, 399. 
 Gunnis ;•. Weigley, 475, 476. 
 Guthrie v. Murphy. 151. 
 Gwinnell v. Herbert, 168, 189. 
 
 Haas r. Sackett, 169. 
 Hacker t*. Brown. 108. 
 Hadden r. Rodkey, 168. 
 Haddock t\ Woods, 87 
 Haight V. Joyce, 221 
 Hale r. Houghton, 
 Halifax r. Lvle. 275. 
 Hall r. FiilleV, 439. 
 Hallenbach r. Dickinson, 481. 
 Haly r. Lane. 177. 
 Ham r. Smith, 103. 
 Hamilton r. Hooper. 43 
 
 r. Vought, 229. 
 
 r. Wilson, 251. 
 Hammond r. Barclav, 286. 
 
 r. Dufresne. 387. 
 Ha-nauer r. Doane. 109. 246. 
 Handy r. Siblev. 236, 
 
 Hanessler v. Greene, 204, 
 Harden c. Boyce, 384. 
 Harding r. Kdgecumbe. 482. 
 Hardman v. I'x'lihouse, 408. 
 Hardy r. Wateis, 153. 
 
 r. Woodroofe. 333. 
 Hare v. Henty, 322. 
 Harker r. Anderson, 29. 
 Harpending r. Daniel, 398. 
 Harper c. Butler, 494. 
 
 i\ West, 298. 
 
 r. Young, 221. 
 Harris r. Brooks, 477. 
 
 r. Clark, 259. 
 
 r. Lewis, 80. 
 
 V. Robinson, 392. 
 Harrison r. Edwards. 497. 
 
 r. Nicollet Xat. Bank, 34. 
 
 V. Richardson, 157. 
 
 r. Robinson. 366. 
 
 r. Ruscoe. 365, 366. 
 Harsh r. Klepper, 431, 441. 
 Hart r. Clouser, 431. 
 
 r. Stevens, 400. 
 
 ■v. Stifkney. 243. 
 Harter v. Kernochan, 23. 
 Hartford P.ank r. Barry, 312. 
 Hartley '". Case, 450. 
 
 r.'Manton, 469, 470. 
 
 r. Rice, 103. 
 
 r. Wilkinson, 59. 
 Harvey v. Cane, 285. 
 
 17.' Girard Xat. Bank, 311, 340, 
 450. 
 
 V. Martin, 299. 
 Hascall r. Life Assn. of America, 
 
 281. 
 Haskell v. Champion, 433. 
 Hatch r. Burroughs, 104. 
 Haughton /•. ICwbank, 125. 
 Hawkey /•. Borwick. 333. 
 Haxtoii r. Bishop, 398. 
 Hay r. Goldsmidt, 124. 
 Haynes r. Rudd, 103. 
 Hays r. Ha thorn. 403. 
 
 r. N. W. Bank, 358. 
 Hayward r. Bank of England, 341. 
 
 r. French, 136. 
 Haywood r. Stearns. 204. 
 Heartt r. Rhodes, 457. 
 Heath r. Blake, 427. 
 Heaton r. Myers. 127. 
 Hcdger r. Steavenson. 303. 
 Hedlev r. Bainbridge. 137. 
 HetTron v. Hanaford, 13S. 
 Helmer c. Krolick, 227.
 
 XX 
 
 TABLE OF CASES. 
 
 IRcferences arc to 
 imruyraphs marked §.] 
 
 Hemminway r. Stone, 434. 
 Henry r. Jones, 330. 
 
 V. Sneed, 253, 255. 
 Herrimon v. Shomon, 457. 
 Hertell r. Bogert, 119. 
 Heurteiuatte r. Morris, 272, 274. 
 Hevey's Case, 419. 
 Hewins V, Cargill, 431. 
 Hickligg V. Hardey, 258. 
 Hilborn r. Alford, 58. 
 Hildeburn r. Turner, 354. 
 Hill r. Heap, 258. 
 V. Henry, 411. 
 V. Lewis, 328. 
 V. Norvell, 330, 376. 
 r. Shields, 202. 
 Hilton V. Shepherd, 365, 385, 395. 
 Hindlaugh v. Blakey, 301. 
 Hindley i\ Marean, 496. 
 Hine v. Allely, 393, 456. 
 Hinton v. Bank of Columbus, 272. 
 Hoagland v. Erck, 81. 
 Hoare v. Cazenove, 289. 
 
 r. Graham, 59. 
 Hoffman & Co. v. Bank of Milwau- 
 kee, 111, 273. 
 Hofheimer v. Losen. 367. 
 Holcomb V. Wyckoff, 216, 217. 
 Holden v. Cosgrove, lOG, 113. 
 Holdsworth r. Hunter, 66. 
 Holland v. Hatch, 437. 
 Holmes v. Kerrison, 327. 
 Holt V. Ross, 278. 
 Holtz r. Boppe, 259, 318. 
 Home Bank v. Drumgoole, 77. 
 Hook r. Pratt, 185. 
 Hooper v. Keay, 460. 
 Hoopes V. Collingwood, 431. 
 Hoover r. Kilander, 214» 
 Hopkinson r. Forstor, 40. 
 Horah v. Long, 402. 
 Horn f. City Bank, 433. 
 Hortsman v. Henshaw, 274, 278, 
 
 423, 424. 
 Houek r. Graham, 61, 433. 
 Houghton V. Francis, 437. 
 House V. Adams, 383, 3S4, 
 Houston V. Bruner, 194 
 Howard Bank v. Carson, 355. 
 Howard r. Stratton, 61. 
 Howe r. Bradley, 401. 
 V. Merrill, 175. 
 V. Ould, 69. 
 V. Potter, 217. 
 Howell V. Crane, 242. 
 Howry f. Eppinger, 229. 
 
 Hoyt f. Lynch, 57. 
 
 '17. Wilkinson, 408. 
 Hubbard v. Chapin, 221. 
 
 r. Matthews, 319, 368, 369. 
 Hubbly V. Brown, 475. 
 HufTaker v. National Bank, 348. 
 IIufTmanns v. Walker, 449. 
 Hughes 1-. Fisher, 59, 306. 
 Hulbert v. Douglass, 252. 
 Hull V. Conover, 313. 
 Hume V. Watt, 369. 
 Humphrey v. Hitt, 478. 
 Humphreys V. Guillow, 434. 
 Humphreyville V. Culver, 398, 
 Humphries v. Nix, 73. 
 Hunt V. Bell, 102. 
 
 V. Bridgham, 482. 
 
 V. Johnson, 499. 
 
 V. Massey, 155. 
 
 V. Maybee, 342. 
 Hunter v. Robertson, 482. 
 Huntington v. Branch Bank, 209. 
 Huse V. Hamblin, 27. 
 Hussey v. Jacob, 292. 
 Hutchins t\ State Bank, 45. 
 Hutchinson v. Bogg, 113. 
 
 V. Crane, 399. 
 Hyde v. Goodnow, 488. 
 Hyslop V. ClarR, 109. 
 
 V. Jones, 374. 
 
 Indiana Nat. Bank v. Holtzclaw, 
 
 222. 
 Ingalls V. Lee, 171. 
 Ingham v. Dudley, 89. 
 Ingraham r. Gibbs, 65. 
 Ingram v. Forster, 287. 
 Insurance Co. v. Wilson, 355, 366. 
 Ireland v. Kip, 372, 373. 
 Irvin f. Villiar, 102. 
 Irvine i\ Lowry, 87. 
 Ivory V. Michael, 431. 
 
 Jackson v. Hudson, 281. 
 
 V. Love, 312. 
 
 V. Newton, 320. 
 
 V. Parks, 165. 
 
 r. Van Dusen, 157. 
 Jacob V. Hart, 429. 
 
 V. Town, 372. 
 James v. Wade, 383. 
 Jameson r. Swinton, 322, 378, 380. 
 Jansen r. Thomas, 327. 
 Jarvis r. Garnett, 334. 
 
 V. Wilson, 75.
 
 [References are to 
 jjuruyruphu marked §.J 
 
 TAliLE OF CASES. 
 
 XXI 
 
 Jefferson County v. Railroad Co., 
 
 93. 
 Jennera v. Howard, IGl. 
 Jenys V. Fawler, 273. 
 Jcune V. Ward, 2Ui». 
 Jewell r. Wriylil, ilOO. 
 Johnson c. Bank, 451. 
 
 'V. Bank of United States, 436. 
 
 V. Berlizheiiner, 141. 
 
 V. Butler, 231. 
 
 V. Catlin, 402. 
 
 V. Chad well, 158. 
 
 V. Collings, 303. 
 
 V. Frisl)ie, 83. 
 
 V. Henderson, 87. 
 
 ■V. Meeker. 221. 
 
 V. Mitchell, 183. 
 
 V. Thaver, 12. 
 
 V. Underhill, 4G. 
 Johnson Township v. Citizens' Bank, 
 
 76. 
 .Tohnston r. Laflin, 46, 49. 
 Johnston Harvester Co. v. McLean, 
 
 439. 
 Jones V. Darch, 276. 
 
 ■V. Fales, 343. 
 
 V. Fort. 453. 
 
 V. Hook, 495. 
 
 ■V. Jones, 482. 
 
 V. Lewis, 373. 
 
 V. Simpson, 82. 
 Joseph V. Salomon, 367. 
 Joslyn V. Smith, 481. 482. 
 Josselyn r. Lacier, 81. 
 Julian V. Shorebrook, 308. 
 Juniata Bank v. Hale, 318, 360, 365. 
 
 Kampmann r. Williams, 324. 
 Kanaga r. Taylor, 486. 
 Kaufman v. Barringer, 298. 
 Kearney v. Kinfr, 9. 
 
 r. W. Granada :\rin. Co., 64. 
 Keeler r. Bartine, 4G9. 
 Keenan r. Nash, 281. 
 Keller r. Hicks, 149. 
 Kelley r. Whitney, 186, 243. 
 Kello<r<r r. Curtis, 237. 
 
 r. French, 254. 
 Kempner v. Corner, 238. 
 Kennedy r. Geddes. 303. 
 
 r. Goodman, 110. 
 
 r. Knijiht, 491. 
 Kenner r. Creditors, 332. 
 Kerrick v. Stevens, 403. 
 Kershaw r. Cox, 436. 
 Keyes r. Fenstermaker, 324. 
 
 V. Mann. 114. 
 
 Kilgour i\ Finlayson, 124. 
 Kimhro c. Bui lit, 137. 
 Kincaid v. Higgins, 79. 
 King V. Baldwin, 478. 
 
 V. Crowell, 336, 339. 
 
 V. Ellor, 75. 
 
 V. Faber, 137. 
 
 V. Fleece, 403. 
 
 V. Gillet, 4U7. 
 
 V. Hamilton, 88. 
 
 V. Holmes, 336. 
 
 f. Sarria, 486. 
 
 V. Thom, 117. 
 Kinney v. Ford, 71. 
 Kinyon v. W^ohlford, 207. 
 Kirk r. Strickwood, 103. 
 Kirkman c. Benham, 117, 118. 
 Kirtland v. Wanzer, 347. 
 Klein r. Keyes, 110. 
 Klopfer i'. Levi, 274. 
 Knapp r. Mayor of Hoboken, 147. 
 Knickerbocker Ins. Co. v. Pendleton, 
 
 353. 
 Knifjht r. IMcReynolds, 80. 
 Knill r. Williams, 435. 
 Knisely v. Sampson, 62. 
 Knox Co. r. Aspinwall. 23. 129. 
 Konior r. Bayard. 289, 291. 
 Koontz V. Central Xat. Bank, 426. 
 Kost V. Bender, 112. 
 Kountz V. Kennedy, 443. 
 Krampt's Exr. r. Hatz's Exr., 195. 
 Kuenzi r. Elvers, 499. 
 Ku^tz V. Tempel, 330. 
 
 Lacey r. Woolcot, 140. 
 
 Lafayette Bank r. St. Louis Stone- 
 ware Co., 145. 
 
 Laflin & Rand Powder Co. v. Sins- 
 heimer, 111. 
 
 Lakeshore Nat. Bank v. Colliery Co., 
 125. 368. 
 
 Lamar r. Brown, 431. 
 
 Lamljert, Ex parte, 462. 
 
 Lambert r. Ghiselin, 392. 
 
 Lancaster Co. Nat. Bank r. Huver, 
 233. 
 
 Lancey r. Clark. 449. 
 
 Landriim r. Trowbridge, 256, 257. 
 
 Lang r. Smyth, 66. 
 
 Langenberger r. Kroeger, 339. 
 
 Langston r. Corney, 306. 
 
 Lanuton r. Lazarus, 280. 
 
 Lannay r. Wilson, .399. 
 
 Lanussa r. Massicot. 334. 
 
 Laprice r. Bowman. 106. 
 
 Lash r. Edgerton. 459.
 
 XXll 
 
 TABLE Oi'' CASES. 
 
 [h'vfnviiccfi are to 
 pani(/rapli.s marked §.] 
 
 Lathrop r. Commercial Bank, 485. 
 Laubaiu-h r Persell, 90. 
 Law r. Painell, 3!)S. 
 Lawreufe r. Bajssett, 488. 
 f. Dougherty, 80, 
 V. Fussell, 182. 
 Lawson r. Fanners' Bank, 307, 380. 
 
 r. Sayder, 478. 
 Lean v. Lozardi, Oi. 
 Leathers V. Commercial Ins. Co., 
 
 384. 
 Leavens v. Thompson, 127. 
 Leavitt c. Sinies, 344. 
 Lebanon Sav. Bank r. Penney, 01. 
 Lee r. Selleck, 494. 500. 
 
 V. Starbird. 431. 
 Leftly V. Mills, 312. 351, 410. 
 Leggc r. Thorpe, 387. 
 Legro r. Staples, 82. 
 Lehman r. .Tones, 397. 
 Leighlon r. Bowen. 113. 
 Le Neve r. Le Neve, 255. 
 Leiilu'im v. Fay, 240. 
 Lennig v. Ralston, 9. 
 Lenox r. Cook. 413. 
 V. Leverett, 381. 
 1-. Prout. 478. 
 V. Roberts, 378. 
 Leonard v. IMason, 57. 
 
 r. Phillips. 437. 
 Lerned v. .Johns. 127. 
 Le Roy r. Board. 490. 
 Leslie r. Hastings, 301. 
 Lester f. Given, 40. 
 Lewis V. P>al:ewell. 371. 
 V. Gompcrtz, 303. 
 V. .Jones. 4()8. 
 Lime Rock F. & M. Ins. Co. v. Hew- 
 itt, 82. 
 Lincoln & Kennebec Bank r. Page, 
 
 343. 
 Lindcll r. Rokes. 97. 
 Lindcnberger r. Beall, 375. 
 Lindsev r. McClellan, 27. 
 Lirigle'r. Cook, 459. 
 Lioiibcrger r. Kinealy. 449. 
 Litchfield Bank ?;. Peck, 238. 
 Little r. Blunt, 415. 
 
 r. Phfpnix Bank. 32. 
 r. Slackford. 75. 
 Littledalc r. :\rayl)erry. 354. 
 Livingston r. Roosevelt, 284. 
 Llovd V. Lee. 165. 
 
 ■ r. West Branch Bank, 148. 
 Loan Assn. r. Topcka. 23. 
 Lockott's Case, 419. 
 
 Lockhart i;. Hullinger, 102. 
 Lockwood V. Crawford, 339. 
 Logan V. Cassell, 403. 
 Lomax r. Picot, 180. 
 J.,i)nsdalc r. Brown, 314. 
 Loring r. Hailing. 330. 
 Louisiana v. Wood, 420. 
 Louisiana Ins. Co. v. Sliamburgh, 
 
 397. 
 Louisiana State Bank r. Ellery, 308. 
 
 V. Rowell, 373. 
 Louisville R. R. Co. v. Caldwell, 91. 
 
 Louviere c. Laubray, 409. 
 
 Lovejoy r. Whipple, 70. 
 
 Lovell c. Evertson, 399. 
 V. Hill, 70. 
 
 Lovinger v. First Nat. Bank, 420. 
 
 Low r. Argrove, 435. 
 
 Lowden v. Nat. Bank, 439. 
 
 Lowe V. Peers, 103. 
 
 Lowell r. Boston, 23. 
 
 Lowenthal v. Chappeli, 481. 
 
 Lucas I". Ladew, 499. 
 
 Lunt c. Adams, 323. 
 
 Lyman v. Gedney, 454. 
 
 Lynch v. Reynolds, 470. 
 
 Lynn Nat. Bank r. Smith. 870. 
 
 Lyon I'. Aiken, 409. 
 
 Lyons r. Holmes, 58. 
 
 Lytle r. Wheeler, 100. 
 
 McClellan r. Coffin, 80. 
 McCormick v. Littler, 100. 
 
 V. Trotter, 87. 
 
 V. Williams, 238. 
 McCrady r. Jones, 481. 
 McCramer v. Thompson, 433. 
 McCullis V. Bartlett. 100. 
 McCurbin r. Turnbull, 430. 
 McCurdv T. Bowes, 81. 
 McCutchen v. Rice, 299. 
 McDonald v. Lee, 332. 
 
 t". Magruder. 408. 
 McElvain r. :\Iudd, 100. 
 McEvers i'. Mason, 302. 
 McFarland r. Pico, 412. 
 McGregor r. Bishop, 107. 
 McGruder r. Bank of Washington, 
 
 311, 340, 397. 
 Mclntyre r. Yates, 100. . 
 McMonigal r. Brown, 324. 
 McMurchey r. Robinson. 329. 
 McNamara v. Gargett, 109. 
 AfcNamee v. Carpenter, 399. 
 McNinch V. Ramsey, 80.
 
 [Ucfrriiicrs- iirr to 
 yuiuyruitliH inurkcd §.J 
 
 lAHl.K ol' CASES. 
 
 xxm 
 
 McVoan r. Scott, 4:i3. 
 
 McVeigh i. Hank of Old Dominion, 
 
 374. 
 Maccoun r. Atchafalaya Hank, 350. 
 Mace c. KiMinedy, 240. 
 MacGrogor r. Rhodes, 424. 
 Mackay i'. St. Mary's Church, ll!i. 
 Maddur v. Bevan, 457. 
 Magoun c. Walker, 357. 
 Magruder c. Union Bunk, 318. 
 Mahaiwe Bank r. Douglass. 430. 
 Mahoney c. Ashland, 7. 
 Maitland r. Citizens" Nat. Bank, 
 
 •235. 23<i. 
 Maiden Bank c. Baldwin, 338. 
 Maltz V. Fletcher, 108. 
 Manuiion v. Hartman, 193. 
 Manchester Bank r. Fellows, 412. 
 Manchet r. Cason. 437. 
 Mandeville v. Welch, 10, 11, 12, 13. 
 Maniort r. Roberts, 404. 
 Mann c. King. 122. 
 
 r. IMoors, 376. 
 Manufacturers' Nat. Bank v. Newell 
 
 232. 
 Marbourg r. Brinkman, 324. 
 Marr v. Johnson. 376. 
 Marret r. Equitable Ins. Co., 82. 
 Marryatts r. White, 459. 
 Marsh r. Gold, 137. 
 
 r. Havford, 405. 
 Marshall r. B. & O. R. R. Co., 99. 
 
 r. Clary, 308. 
 
 r. Gougler, 434. 
 Martendale r. Follett, 432, 441. 
 Martin r. Bacon, 300. 
 
 V. Chauntry. 80. 
 
 r. Graginsky. 392. 
 
 r. Mayo, 155. 
 
 V. Morgan, 452. 
 
 V. Muncv. 272. 
 
 r. Wade", 103. 
 Mason r. Barff. 299. 
 
 r. Bradley, 433. 
 
 r. Franklin. 346. 
 
 r. Hunt. 308. 
 
 r. Metcalf. 77. 
 
 r. Moi-gan, 165. 
 
 r. Rumsey. 284. 
 Massachusetts Bank r. Oliver, 371. 
 Massie v. Byrd, 415. 
 Massman r. Holscher, 212. 
 "Maspero r. Pedesclaiix, 371. 
 Master r. "Miller. 429. 
 Matthews /•. Haydon. 316. 
 
 v. HoughtoTi, 80. 
 
 Maury v. Coleman, 214. 
 May r. Boisseau, 95. 400. 
 
 V. Chapman, 252. 
 
 V. Coffin, 397. 
 
 r. Kelly. 281. 
 Mayhew v. Boyd, 478. 
 .\lcacher r. Fort, 423, 424. 
 Mead v. Young, 182, 419. 
 .Meadow •-. Bird, 99. 
 Meclianics' Bank v. Bank of Colum- 
 bia, 120. 
 
 V. Livingston, 285. 
 Mechanics, etc.. Bank V. Crow, 98. 
 
 i\ Farmers, etc.. Bank, 52. 
 Mechanics' Bank. Assn. v. Place, 
 
 372. 
 Medburv c. Watrous, 154. 
 Melick V. First Nat. Bank, 477. 
 Mellish r. Hawdon, 208. 
 Mercantile Bank i\ ^McCarthy, 372. 
 Merchants' Bank r. Birch, 371. 
 
 V. Elderkin, 342. 
 
 V. McClelland, 237. 
 
 r. Spicer, 29, 58. 
 
 r. State Bank, 31, 34, 30, 38. 
 Merchants' Nat. Bank v. Comstock, 
 113. 
 
 V. Ritzinger. 34. 
 Merritt r. Duncan, 238. 
 Mersman V. Werges, 427. 
 Mcrtens r. Withington, 461. 
 :\rerz r. Kaiser, 314, 372, 404. 
 Metcalfe r. Richardson. 300. 
 Metzger i\ Waddell, 320. 
 Mever r. Ha worth, 105. 
 Me'vers r. Standart. 309. 
 Micliigan Bank r. Eldred. 209. 
 Micliigan Ins. Co. r. Leavenworth, 
 
 62. 
 Michigan State Bank r. Leaven- 
 worth. 305. 
 :\riers r. Brown, 300. 304. 
 :\Iillard r. Barton, 232. 
 Miller r. Austen. 27. 
 
 r. Bovkin. 234. 
 
 r. Butler. 298. 
 
 r. Finlev. 161. 
 
 r. Gilliland. 429. 
 
 )'. Reed, 434. 
 Milliken r. Brow-. 409. 
 :\Ii11i()ii r. Ohmsberg. 103. 
 Mills r. Bank of United States, 328, 
 344. 302. 
 
 r. Barber, 113. 
 
 r. Davis. 415. 
 
 t'. I'owlkes, 459.
 
 XXIV 
 
 TABLE OF CASES. 
 
 [References are to 
 jHiriKjruplts marked §.] 
 
 Mills v. Glcason, 23. 
 
 r. Kuvkeiulale, 81. 
 r. Mills, 99. 
 Millies V. Duman. 452. 
 Mineral Point R. R. Co. r. Barron, 
 
 495, 498. 
 Misher r. Carpenter, 175. 
 Mitchell r. Baring, 333. 
 V. Cross. 379. 
 r. Culver. 429. 
 V. De Grand. 257, 327, 330. 
 r. Railroad Co., 145. 
 Mitford r. Walcott, 296. 
 Mobile Sav. Bank r. McDonnell, 415. 
 Moffat v. Edwards, 77. 
 Moge V. Herndon, 442. 
 Moggridge r. Jones, 108. 
 Moline, Ex parte, 371, 456. 
 Molson's Bank v. Howard, 297. 
 Monroe v. Fohl, 459. 
 Monson r. Drakeley, 433. 
 Montague v. Perkins, 285, 310. 
 Montgouierj' County Bank v. Albany 
 
 City Bank, 287. 
 Montpelier Bank v. Dixon, 478. 
 Moodie v. Morrell. 317. 
 Moody r. Threlkeld, 285. 
 Moore v. Baird, 21G. 
 
 V. Hutchinson, 441. 
 r. Robinson, 214. 
 Morgan r. United States, 21, 203, 
 
 239, 324. 
 Morris r. Husson, 376. 
 
 r. Morton, 249. 
 Morrison r. Bailey, 31. 
 
 V. Buclianan,"^2G6, 287. 
 Morse v. Chamberlain, 377. 
 IMortee v. Edwards, 80. 
 Morton v. Naylor, 12, 14. 
 
 ■V. Rogers. 113. 
 Moses V. McTerlar, 426. 
 Mosher v. Allen, 405. 
 Mowat V. Brown, 99. 
 Moxon I'. Pulling, 179. 
 Muilman v. D'Eguino, 269, 381. 
 Muncy Borough School Dist. t', 
 
 Commonwealth, 324. 
 Munn V. Baldwin, 375. 
 Munro v. King, 61. 
 Murphy v. Keyes, 110. 
 Murray r. Beckwith, 229. 
 r.'Lardner, 229. 
 V. Snow, 468. 
 Musson V. Lake, 339, 353, 358. 
 Mutual Nat. Bank v. Rotge, 37. 
 
 165 
 
 Nailor r. Bowie, 339. 
 Nance v. Lary, 222. 
 Nash r. Fugate, 213. 
 National Bank v. Brewster 
 r. Cade, 375. 
 
 V. Dorset Marble Co., 190 
 V. Gunhouse, 250. 
 V. Howe, 255. 
 Kirbv, 243. 
 Kirk, 103. 
 Law, 138. 
 Smoot, 488. 
 Wells, 145. 
 National Exch. Bank v 
 National State Bank )" 
 
 xT 
 
 l\ 
 
 V. 
 V. 
 
 V. 
 V. 
 
 Wilder, 55. 
 Rising, 438. 
 
 National State Capital Bank V. 
 
 Noyes, 137. 
 Nave V. Richardson, 316, 353. 
 Nazro v. Fuller, 430. 
 Neal V. Irving, 125. 
 N. E. Bank l". Lewis, 412. 
 Neff V. Horner, 431. 
 Neff's Appeal, 478. 
 Neil r. Case, 443. 
 Nelson v. Fotterall, 354, 357. 
 
 V. Manning, 80. 
 Nevada Bank v. Luce, 297. 
 Nevins y. Bank of Lansingburgh, 
 
 372. 
 New V. Walker, 104. 
 Newberry V. Detroit, etc., Iron Co., 
 
 47. ■ 
 Newcomb r. Raynor, 475, 476. 
 Newell r. Gregg, 243. 
 
 v. Mayberry, 440. 
 New England Mortgage Co. v. Gay, 
 
 255. 
 Newhall v. Central P. R. R. Co., 51. 
 New Orleans, etc., i\ Montgomery, 
 
 241. 
 New York, etc., Co. v. Selma Sav. 
 
 Bank, 368. 
 Niagara Bank v. Fairman, 309. 
 Nichols V. Gross, 402. 
 V. Nichols, 97. 
 V. Webb, 348. 
 Nicholson v. Sedgwick, 26. 
 Nicolay v. Fritschle, 403. 
 Nicolls V. Rodgers, 495. 
 Nightingale v. Withington, 153. 
 Norris r. Badger, 453. 
 
 V. Despard, 383, 384. 
 North British Ins. Co. v. Lloyd, 477. 
 North River Bank v. Aymar, 123. 
 Northwesterti Coal Co. V. Bowman, 
 30, 34, 375.
 
 [Rpfrrences are to 
 jjunKjruph.f inarlad §.J 
 
 TABLE OF CASES. 
 
 XXV 
 
 Norvill V. Hudgins, 250. 
 Nott V. 15eard, 1^53. 
 
 Oakley v. Ooddcen, 253. 
 
 Ocean Nat. Bank v. Williams, 347, 
 
 348 
 Odd Fellows v. First Nat. Bank, 126. 
 Ogden V. Dobbin, 306. 
 
 V. Saunders, 174, 175, 326. 
 Ogle V. Graham, 4:51. 
 O'Keefe r. Dunn, 203. 
 Oridge v. Sherborne, 321, 327. 
 Oriental Bank v. Blake, 371. 
 Ormsbee r. Howe, 252. 
 Orr r. Maginnis, 347. 
 Ort r. Fowler, 210. 
 Osborn r\ Adams Co., 23. 
 
 V. Bryce, 474. 
 
 V. Nicholson, 106. 
 Osmond r. Fitzroy, 158. 
 Otis V. Barton, 464. 
 Otisfield V. Mayberry, 453. 
 Otsego Co. Bank v. Warren, 354. 
 Oulds i\ Harrison. 204. 
 Outhwaite r. Luntlcy, 429. 
 Overman v. Hoboken City Bank, 287. 
 Overton r. Tyler, 1. 
 Owen i\ Hall, 441. 
 
 V. Moody. 494. 
 
 V. Van Uster, 284. 
 
 Pacific Bank v. Mitchell, 449. 
 
 Packwood r. Gridley, 254. 
 
 Paese v. Hirst, 405. 
 
 Page V. Gilbert, 303. 
 
 Paige V. Carter, 62. 
 
 Palmer v. Hummer, 79. 
 
 Pardee v. Fish, 27. 
 
 Parish r. Stone, 107. 
 
 Park V. Nichols, 274. 
 
 Parker r. Citv of Svracuse, 12. 
 
 V. Gordon, 300.' 322, 378. 
 
 V. Reddick, 324. 
 Parks V. Evans, 488. 
 Parmelee v. Williams, 479. 
 Parr v. Jewell, 205. 
 Partridge v. Bank of England, 32. 
 
 t\ Davis, 179. 
 Paton V. Coit, 221. 
 Patrick r. Beazley, 373. 
 Patten v. Gleason, 248. 
 Patterson f. Todd, 171. 
 
 r. Wright. 243. 
 Pattison v. Hull, 459. 
 Pavne r. Commercial Bank, 478. 
 
 V. Elliot, 45. 
 
 Peacock v. Purcell, 359. 
 
 r. Rhodes, 183. 
 Pearl v. McDowell, 160. 
 Pearsall v. Dwiglit, 485, 486. 
 Pearson v. Garrett, 77. 
 Pease v. Landauer, 13. 
 
 V. Warren, 131, 313. 
 Pcasley v. Boatwright, 92. 
 Peck V. Hozier, 496. 
 Pendleton v. Knickerbocker, 320. 
 Penny v. Graves, 00. 
 
 V. Innes, 189. 
 People l: Getchell, 420. 
 People's Bank v. Brooks, 342, 353. 
 
 f. Gridley, 48. 
 
 V. Keeeh, 309. 
 Percival v. Frampton, 98. 
 Perkins v. Barstow, 481. 
 
 V. Franklin Bank, 328, 332. 
 
 V. White, 247, 391. 
 Perring r. Hone, 434. 
 Perry r. Barret, 195. 
 
 V. Harrington, 308. 
 Peters r. Hobbs, 376. 
 I'fiel V. Vanbatenberg, 453. 
 Phelps V. Stocking. 378. 
 Phillips r. Astberg, 317. 
 
 V. Frost, 298. 
 
 V. Gould. 300. 
 
 V. McCurdv. 346. 
 
 r. Meilly, 01. 
 
 t*. Paget, 153. 
 
 r. Plato, 195. 
 
 V. Poindextor, 357. 
 
 v. Thurn, 295. 
 Philliskirk v. Pluckwell, 400. 
 Philpott V. Bryant, 257, 318. 
 Pier r. Heinrickshoffen, 340. 
 Pierce v. Cate, 410. 
 
 V. Indseth, 348, 490. 
 Piorcy V. Piercy, 434. 
 I^illow r. Hardeman, 371. 
 Pine r. Smith, 244. 
 Pinkerton v. ^lanchester R. R., 48. 
 Piiikney r. Hall, ,'5, 284. 
 Pitman v. Breckenridge, 358. 
 
 r. Crawford, 81. 
 Plain V. Roth, 459. 
 Planters' Bank v. Kesee, 30, 31. 
 Planters" Rice Mill Co. v. Mer- 
 chants' Nat. Bank, 54. 
 Plait V. Beebe, 98. 
 
 r. Jerome, 215. 
 
 r. Snipes. 110. 
 Polhill r. Walter. 281. 
 Polk r. Spinks. 374.
 
 XXVI 
 
 TABLE OK CASES. 
 
 IReferences are to 
 paruyruphs marked §.] 
 
 Pomeroy v. Amswoith, 490. 
 
 r. Taiinor. 47!'. 
 Poorman r. Mills, 404. 
 Pope i: Huth, 13. 
 Porter v. Cushman, 313, 454. 
 
 r. Pittsburg Steel Co., 201. 
 Potter r. Earnest, 60. 
 
 V. Tyler. 108. 
 Powell V. Cominonwealtli, 418. 
 
 I". Jones, 300. 
 Power r. Hathaway, 495. 
 Powers r. Waters, 248. 
 Pratt c. Parknian, 52. 
 Prescott Bank r. Caverly, 166, 269. 
 Preston v. Jackson, 115. 
 Price V. Jones^ 78. 
 
 V. Keen, 111. 
 
 V. YounfT. 378, 390. 
 Prins r. Lumber Co., 251. 
 Pulsifer r. Hotchkiss, 108. 
 Purcell V. Allemong, 29. 
 Purviance r. Jones, 69. 
 Putnam v. Sullivan, 209, 220. 
 
 Quaker City Bank v. Showacre, 488. 
 Quimby r. *Mcrritt, 86. 
 Quinn'f. Tuller, 94. 
 
 Raborg V. Peyton, 274. 
 
 Kail road Co. v. County of Otoe, 23. 
 
 V. Howard. 44. 
 
 V. Nat. Bank, 8. 
 
 r. Schutto. 217. 
 Rand v. Barett, 449. 
 
 V. Dovy, 168. 404. 
 
 r. Reynolds, 377. 
 Raphael r. Bank of England. 228. 
 Rasmussen v. State Nat. Bank, 468. 
 Ray V. Smith, 396. 
 
 V. Tnbbs, 151. 
 Raymond r. T^Iiddloton, 63. 
 Read v. P.unk of Kentucky, 348. 
 
 V. Wilkinson, 306. 
 Reamer v. Bell. 182. 
 Reed v. Batchelder, 155. 
 
 V. Roark. 58. 
 
 V. Wilson, 322, 328. 330. 
 Rees V. Conorooheague Bank, 404. 
 
 V. Warwick. 302. 
 Regina v. Wilson, 418. 
 Reid V. Coats, 350. 
 
 V. Morrison. 397. 
 
 V. Payne. 375. 
 Renner ?\ Bank of Columbia, 328. 
 Rex r. Atkinson. 420. 
 V. Hales, 418. 
 
 Rex V. Hart, 418. 
 V. Palmer, 421. 
 V. Parke, 419. 
 V. Post, 420. 
 V. Rogers, 419. 
 V. Treble, 420. 
 V. Webb, 419. 
 Rey V. Simpson, 193, 194. 
 Rhett V. Poe, 369, 387. 
 Rhode V. Proctor, 371. 
 Rhodes v. Lindley, 86. 
 Richards v. Richards, 400. 
 Richardson v. Carpenter, 81. 
 V. Ellet, 62. 
 V. Lincoln, 70. 
 V. Mellish, 103. 
 V. Strong, 160. 
 Richmond v. Diefendorf, 231. 
 Ridgely Bank r. Patton. 28. 
 Riegel v. Cunningham, 242. 
 Riggin V. Collier, 9. 
 Robb r. Bailey, 399. 
 Robbins V. Eaton, 155. 
 Roberts v. Austin. 40. 
 V. Bethel, 286, 288. 
 V. Hall, 238. 
 V. Hardy, 163. 
 V. Mason, 393. 
 V. Peake, 77. 
 V. Roberts, 103. 
 V. Smith, 86. 
 Robertson r. Allen, 177. 
 Robins v. Gibson, 387. 
 Robinson r. Ames, 257. 413. 
 V. Berryman, 433. 
 V. Bland. 109. 
 V. Blen, 320. 
 V. St. Louis, 23. 
 r. Wilkinson, 405. 
 r. Yarrow. 277, 278, 279, 451. 
 Rock County Nat. Bank v. Hollister, 
 
 403. 
 Rogers r. Blythe, 103. 
 V. Burlington. 23. 
 V. Hadley, 227, 446. 
 Rohde, Ex parte, 397. 
 Rolin V. Stewart, 41. 
 Roof r. Stafford, 154. 
 Ross V. Bedell, 387. 
 
 V. Herd, 389. 
 Rothschild i\ Currie, 358. 
 Roundtree v. Baker, 106. 
 Rowe V. Young, 262. 
 Rowland r. Fowler, 251. 
 Royce r. Nye. 405. 
 Rubelman v. McNichol, 403.
 
 [Urfrrrncrti nrr in 
 punKjntiilis iiKirki'd §.] 
 
 TABLE OF CASES. 
 
 XXV il 
 
 Huckcr /•. Wiulliii^toii, 118. 
 Kuddi-11 c. riialur, lilU. 
 Kuir r. Webb, 75. 
 Itiuuic'l r. Kec'ler, 151. 
 ]{usscll r. Lee, 151. 
 r. lliillips, 258. 
 Rust r. (Jolt, 102. 
 KiilhiiKi. etc., K. K. Co. 1-. Cole, 402. 
 
 Sabino r. IJaiik of Worcester, 48. 
 
 Sac-kctt r. Kcllar, 2 15. 
 
 Saco Nat. iJaiik r. Sanborn, 376. 
 
 Sacriber r. Urown. 348. 
 
 Sager v. Tupper, 58. 
 
 St. John r. Kcdnian, 125. 
 
 V. Roberts, 370. 
 St. Louis Bank r. Aliheimer, 3G9. 
 Salinas v. Wright, 77. 
 Salisbury r. Bartleson, 337. 
 Salt Springs Nat. Bank v. Burton, 
 
 322. 
 Salter r. Burt, 330. 
 Sanderson i;. Oakev. 393. 
 Sands r. Smith. 491. 
 Saunderson v. .Judge, 342. 
 Savage r. Merle, 449. 
 Savintrs Bank i\ Shaffer, 441. 
 Savings Bank of Kansas v. Nat. 
 
 Bank of Commerce. 104. 
 Sawyer V. Wiswcll, 112, 114, 201. 
 Saylor r. Busliong. 40. 
 Soaife r. Byrd, 70. 
 Schepp r. Carpenter, 100. 
 Schimmelpennich v. Bayard, 291, 
 
 304. 
 Schmidt r. Gates, 481. 
 Schlosinger v. Arline. 84. 
 Schindel v. Schmaelter, 58. 
 Schneider r. Norris, 58. 
 Schofi.'ld V. Bavard. 293. 
 Scholev r. Walsby, 453. 
 Schultz V. Ashley. 285. 
 Schutt 17. Evans, 114. 
 Schuylkill County r. Copely, 220. 
 Schwalm v. McTiitvrc, 432. 
 Scolhms r. Flvn. 102. 
 Scotland Couiitv r. Hill, 201. 
 Scott r. Lefford. 469. 
 
 r. Ocean Bank. 1.32. 
 Scoville r. Canfudd. 493. 
 Sears V. Wricrht. 79. 
 Sea ton r. Scnvill. 370, 380. 
 Sebag r. Ahithol, 309. 
 Second Xnt. Bank r. Howe, 95. 
 Security Bank r. Luttgen, 51. 
 Seelev v. Engell, 107. 
 
 Scclcy r. Reed, 173. 
 
 Secligson v. Lewis, 115. 
 
 Seneca County Bank c. Neass, 357, 
 
 37G. 
 Sessions i". Mosely, 398. 
 Seventh Nat. i5ank c. Cook, 40. 
 Sewancc .Mining Co. r. .McCall, 124. 
 Seymour v. Farrell, 193. 
 Shade r. Creviston, 407. 
 Shank i\ Butscti, 58. 
 Sharpe r. Bellis, 128. 
 Shaw r. Railroad Co., 51. 
 
 c. Spencer, 120. 
 Sliavlor v. Mix, 374. 
 Shiild v. Brett, 319, .366, 412. 
 Sliclburne Falls Nat. Bank V. 
 
 Townslcy. 373, 375, 377. 
 Sli(dton V. Braithwaite, 3G2. 
 Shepherd v. Evans, 402. 
 
 r. Graves, 62. 
 Slicply r. Waterhouse, 481. 
 Slicrrington r. Yates, 400. 
 Slierwood r. Roys, 398. 
 Shi[)nian r. Cook, 359. 
 Shirley v. Howard, 113. 
 Shoe & Leather Nat. Bank v. Wood. 
 
 490. 
 Shoemaker r. Benedict, 481. 
 
 r. Mechanics' Bank. 374. 
 Shultz i: Taync. 62. 
 Sliuttloworth r. Noves, 166. 
 Sliutts V. Fingar. 476, 478, 479. 
 Sibree r. Tripp, 468. 
 Sicl)eneck r. Anchor Sav. Bank, 479. 
 Sicgerson r. Mathews, 389. 
 Simon r. Ingham, 460. 
 Simonton's Estate. 213. 
 Simons r. Morris. 242. 
 Sims r. Nat. Commercial Bank, 311. 
 Singleton r. Townsend. 4S1. 
 Skcltnn r. Dunston, 322, 353. 
 Slack r. Kirk, 188. 
 Sloan r. ilcCarty. 77. 
 Slonian r. Cox. 441. 
 Small r. FraTd-;lin Mining Co., 457. 
 Smallev r. Wright. 371. 
 Snicdcs r. Bank of L'tica, 132. 166. 
 Smith r. Abbott, 308. 
 
 V. Allen, 76. 
 
 V. Bank of Washington. 412. 
 
 r. Caldwell. 482. 
 
 V. Chester, 425, 451. 
 
 V. Hanie, 399. 
 
 r. .Tnnscn. 231. 
 
 V. Kendall. S3. 
 
 V. Loekridge, 281.
 
 XXVlll 
 
 TABLE OF CASES. 
 
 [References are to 
 paragraphs marked §.] 
 
 Sniiili r. McCluie. 70. 
 c. McNair, 424. 
 r. Maisaok, 100, 276. 
 c. Melton, 284. 
 i\ Muncie Nat. Bank, 272. 
 V. Nightingale, 82. 
 V. Philbrick, 337. 
 r. Screven, 4.59. 
 r. Smith, 437. 
 r. Stranger, 130. 
 r. Whiting. 119, 362. 
 Snead c. Coleman, 117, 118. 
 Solarte c. Palmer, 364. 
 Solser V. Brock, 477. 
 Sondheim r. Gilbert, 221. 
 Soule r. Bonney, 103. 
 Southcot V. Watson, 24. 
 Spalding r. Andrews, 285. 
 Sparhawk V. Willis, 401. 
 Spaulding v. Kelly, 130. 
 Spear r. Pratt, 298. 301. 
 Speck V. Pullman Car Co., 239. 
 Spencer v. Harvey, 389. 
 Sperry v. Horr, 84. 
 Spiller V. Creditors, 459. 
 Sprigg V. Cuny, 314. 
 Sproat r. Matthews, 306. 
 Spurgeon v. McPheeters, 94, 110. 
 Stafford v. Yates, 365. 
 Stainback r. Bank of Virginia, 123, 
 
 316, 354, 357. 
 Stanley v. iMcElrath, 360. 
 Stanton v. Blossom, 365, 412. 
 Stanwood V. Stanwood, 400. 
 Staples V. Franklin Bank, 410. 
 Star Ins. Co. v. Bank, 224. 
 Stark V. Alford, 398, 409. 
 Starr t'. Paehmond, 459. 
 State V. Cilley, 432. 
 V. Crawford. 29. 
 V. Loomis, 55. 
 €. Madison, 23. 
 V. Peck, 213. 
 V. Polk, 433. 
 V. Taylor, 84. 
 State Bank v. Fearing, 424. 
 V. Hennen, 372. 
 V. McCoy, 161. 
 State ex rel. v. Osakee Township, 23, 
 Staunton v. E. P. Co., 81. 
 Steams r. Burnham, 494. 
 Steele r. McDowell. 118. 
 V. McKinlay. 301. 
 r. Soule. 481. 
 Stephens r. Monongahela Nat. Bank 
 93, 248. 
 
 Stephenson v. Dickson, 379. 
 Stevens v. Graham, 429, 431, 432. 
 Stevenson v. Woodhull, 454. 
 Stewart V. Lispenard, 158. 
 Stivers r. Prentice, 317. 
 Stoddard v. Kimball, 216, 236, 248. 
 Stokes V. Anderson, 71. 
 Stone V. Peake, 108. 
 
 V. Seymour, 459. 
 Strachan v. Muxton, 59. 
 Straughan v. Fairchild, 235. 
 Strawbridge v. Robinson, 9. 
 Stroh r. Hinchman. 125. 
 Stroud V. Marshall, 157. 
 Studebaker i\ Man. Co., 253. 
 Styles V. Wardle, 62. 
 
 Siidler V. Collins, 430. 
 
 Sullivan v. Bonesteel, 103. 
 V. Rudisill, 433. 
 
 Sultzbacher v. Bank of Charleston, 
 393. 
 
 Supervisors v. Schenck, 129, 145. 
 
 Sussex Bank r. Baldwin. 334, 335. 
 
 SutcliflFe V. McDowell, 387. 
 
 Sutton V. Toomer, 327. 
 
 Swan V. Steele, 135. 
 
 Swansey t". Breck, 308. 
 
 Swasey* r. Vanderheyden, 152. 
 
 Swayze v. Britton, 365. 
 
 Sweat V. Hall, 400. 
 
 Sweet f. Swift, 367. 
 
 Swift V. Tyson, 8, 98, 100, 111. 
 
 Swire v. Redman, 479. 
 
 Svvope V. Leflfingwell, 449. 
 V. Ross, 271. 
 
 Taft's Case, 419. 
 
 Talbot V. Nat. Bank, 452. 
 
 Tannant v. Rocky Mountain Nat. 
 
 Bank, 126. 
 Tardy v. Boyd, 384. 
 Tassel v. Cooper, 41. 
 Tassey v. Church, 308. 
 Tayloe v. Sandiford, 459. 
 Taylor i?. Bank of Illinois, 354. 
 
 V. Croker, 275. 
 
 V. Newman, 306. 
 
 V. Tliomas, 71. 
 Texas Banking Co. v. Turnley, 234. 
 
 V. Hardenburg, 203. 
 Texas Land Co. v. Carroll. 127. 
 Thackeray i\ Blackett, 387. 
 Thatcher v. Dinsmore. 120. 
 
 V. West River Nat. Bank, 248. 
 Thayer v. Buffum, 399.
 
 [References are to 
 purayraphs wurked §.] 
 
 TABLE OF CASES. 
 
 XXIX 
 
 The Distilled Spirits, 255. 
 
 The Julia, 1U3. 
 
 Tliillniau v. Gueble, 370. 
 
 Third Nat. Bank r. Lange, 120, 251. 
 
 r. Snyder, 137. 
 Thomas c. Bank of British North 
 America, 36. 
 
 r. Shoemaker, 329. 
 
 c. Thomas, 110. 
 Thompson v. Brown, 4G0. 
 
 17. Flower, 314, 409. 
 
 r. Harrison, 102. 
 
 i\ Ketchum. 321, 400. 
 
 I?. Samuels, 104. 
 
 V. Sloan, 88. 
 
 V. Warren, 100. 
 
 V. Wharton, 99. 
 
 V. Williams, 361. 
 
 i\ Wilson, 494. 
 Thorington v. Smitli, 105. 
 Thornburg i;. Emmons, 268. 
 Thornton v. Rankin, 120. 
 Thrasher r. Everhart, 496. 
 Throop V. Grain Cleaner Co., 14. 
 Thurman v. Van Brunt, 409. 
 Ticonic Bank v. Stackpole, 347. 
 Tidmarsh V. Grover, 430. 
 Tindal c. Brown, 364, 378. 
 Todd V. Bank of Kentucky, 490. 
 
 V. WMck, 201. 
 Toledo Iron & Agr. Works v. Heis- 
 
 ser, 128. 
 Tolman r. Haurahan, 284. 
 Tompkins v. Woodward, 138. 
 Tonne V. Wasson, 403. 
 Tooke V. NewTuan, 236. 
 Tooting V. Hubbard. 281. 
 Torinus r. Buckham, 108. 
 Torrey v. Foss. 387. 
 Townsend r. Dry Goods Co., 336, 
 364. 
 
 r. Lorain Bank, 364. 
 
 r. Star Wagon Co., 430. 
 Township of Burlington v. Beasly, 
 
 23. 
 Township of Pine Grove v. Talcott, 
 
 148. 
 Townsley v. Sumrall, 100, 256, 257, 
 
 268, 355. 
 Trapp V. Spearman, 430. 
 Treanor v. Yingling, 478, 
 Tredick r. Wendelt 339. 
 Trickey r. Lame, 108. 
 Trimbey l'. Vigmer, 494. 
 Troy City Bank v. Lauman, 309. 
 True V. Collins, 377. 
 
 Tucker v. Randall, 413. 
 Turner v. Browder, 274. 
 
 V. Keller, 175. ''^• 
 
 V. Leach, 365, 395. 
 
 V. Ross, 481. 
 
 V. Samson, 370. 
 Tutt V. Thornton, 437. 
 Twopenny v. Young, 470. 
 Tyree v. Lyon, 138. 
 Tyrell v. Cairo, 499. 
 Tyson r, Oliver, 376. 
 
 Union Bank v. Fowlkes, 353. 
 
 r. Hvde, 347. 
 
 r. Willis, 319, 369. 
 Union Nat. Bank v. Barber, 200, 
 406. 
 
 V. Fraser, 104. 
 
 V. Marr, Adinr., 384. 
 
 r. Roberts, 436. 
 United States v. Bank of Metropolis, 
 111, 310. 
 
 V. Barker, 257, 379. 
 
 V. Clinton Nat. Bank, 426. 
 
 V. Dodge Co., 23. 
 
 V. January, 459. 
 
 V. Kirkpatrick, 459. 
 
 r. Linn, 434. 
 
 r. Nat. Park Bank, 425, 426. 
 United States Bank v. Binney, 136. 
 
 r. Carneal, 322. 
 I'ther V. Rich, 227. 
 
 Valott V. Parker, 104, 221. 
 Valk r. Gaillard, .308. 
 
 V. Simmons, 387. 
 Vanoleave i\ Beach, 472. 
 Vandewall i-. Tyrrell, 461, 463. 
 Van Duzer r. llowe. 280, 439. 
 Van Eman r. Staneiifield, 168. 
 Van Rensselaer's Exrs. V. Roberts, 
 
 460. 
 Van Steenburg r. Hoffman, 165. 
 Vanstrum r. Liljengren, 309. 
 Variium v. Milford, 255. 
 Vathir v. Zane, 113. 
 Vinton r. King, 243. 
 Violett r. Patton, 93, 209. 
 Voglc r. Ripper, 440. 
 Voorhees v. Atlee, 389. 
 Vreeland v. Blunt, 13. 
 
 Wackerbath, Ex parte, 462. 
 Wager r. Brooks. 428. 
 Wagner r. Diodrich. 248. 
 r. Kenner, 329.
 
 XXX 
 
 TABLE OF CASES. 
 
 [References arc to 
 paru(jr(iiilis marked §.] 
 
 Walker r. Bank of New York, 307. 
 
 r. Kimble, 401. 
 
 r. Turner. 356. 
 Wail r. 3.1onroe County, 147. 
 Wallai-e r. A<;rv, 208. 
 
 V. Crilleo, *323. 
 
 r. McConnell, 475. 
 Walnislev r. Action, 353. 
 
 r. Cooper, 470. 
 \\ alter r. Haynes, 377. 
 Wallers r. Brown, 374. 
 Walton V. Hastings, 429. 
 Walwin v. St. Quintin, 408. 
 Walz r. Alback. 103. 
 \\aiii:er r. Tapper. 347. 
 Ward ;•. Allen, 280, 298. 
 
 r. Churn, 213. 
 
 r. Doane, 103. 
 
 V. Smith, 131. 164. 
 
 r. Vass. 478. 
 Warden v. Howell, 249. 
 Warden r. Rvan, 428. 
 Wardlow r. List, 438. 
 Warren r. Chapman, 109. 
 
 V. Oilman, 367. 
 
 r. Lynch, 496. 
 
 r. Martin, 139. 
 Warrinjrton r. Early, 431. 
 Warwick v. Bruce, 153. 
 Waterman v. Vose, 431. 
 Watson 77. Flanagan, 111. 
 
 r. Heasel. 151. 
 
 V. Hoag, 215. 
 
 V. Loring, 346. 
 
 ??. Tarpley, 256. 
 Wavland University r. Boormati. 60. 
 Weakly r. Bell, 376. 
 Weaver v. Barden, 247. 
 
 r. Bromlev, 399. 
 
 V. Carnalf, 126. 
 Webb V. Fairmauer. 327, 410. 
 
 r. IMears, 257. 
 Weber r. Orten, 312. 
 Webster v. Switzer, 120. 
 
 V. Ray, 127. 
 Wegner r. Biering, 114. 
 Weir r. Walmslcy, 428. 
 Weismer r. Village of Douglas, 23. 
 Welbv V. Drake, 468. 
 Welcii r. Lindo. 314. 
 Wells r. Brigham, 310. 
 
 V. Morrison. 468. 
 Wemple v. Dangerfield, 379. 
 Wessell V. Glenn, 438. 
 West V. Brown. 379. 
 We.stern Bank /•. :\n]ls, 113. 
 
 Westgate V. Healy, 398. 
 Wharton r, Morris, 87. 
 Wheatley r. Strobe, 10, 75. 
 Wheeler r. Field, 392. 
 
 V. Guild, 453, 455. 
 
 V. .lolmson, 406. 
 
 V. Webster, 282. 
 Wheelock v. Freeman, 59, 420, 440. 
 Whidden v. Seelye, 499. 
 Whipple r. Stevens, 482. 
 Whitcomb r. Whiting, 481. 
 White f. Continental Nat. Bank, 
 280, 425, 426. 
 
 P. Hopkins, 476. 
 
 V. Nat. Bank, 185. 
 
 IK Smith, 77, 
 
 V. Stoddard, 315, 366, 395. 
 Whiteford r. Burckmeyer, 406. 
 Whitehouse r. Hansen, 194, 
 Whitesides v. Northern Bank, 430. 
 Whitewell c. Johnson, 343. 
 Whitmer v. Frye. 431. 
 Whittier r. Havden, 404. 
 Whitwell V. Winslow, 00. 
 Whitworth v. Adams, 95. 
 Widoe V. Webb, 109. 
 Wiggle r. Thomasson, 412. 
 Wilcox V. Routh, 368. 
 Wilds r. Savage, 305. 
 Wildman, Ex parte. 407. 
 Wilkinson r. Adams, 363. 
 Williams r. Bank of LTnited States, 
 372. 
 
 V. Cheney. 221. 
 
 V. Drexei, 278 
 
 V. Germaine, 294, 296. 
 
 V. Hoogewerff, 335. 
 
 V. James, 409. 
 
 V. -Tones, 407, 495. 
 
 V. Mathews, 140. 
 
 V. Moore, 155. 
 
 V. Potter, 185. 
 
 V. Putnam, 347, 500. 
 
 V. Tishomingo Sav. Inst., 178. 
 Williamson r. Harrison, 152. 
 
 V. Watts, 152. 
 Willis V. Green, 259. 
 Wil lough by r. Moulton, 58. 
 Wilson r. Codman's Executor, ISO. 
 
 r. Ellsworth, 110. 
 
 V. Holmes, 185. 
 
 r. Lazier. 221, 490. 
 
 V. Second Nat. Bank, 255. 
 Wilson Sewing Machine Co. i:.' 
 
 Spears, 406. 
 Windham Bank v. Norton. 320. 385.
 
 [ReferenccH are to 
 purmj III [tits inurkvd §.] 
 
 TABLE OF CASES. 
 
 XXIil 
 
 Wintermute r. Post, 308. 
 Wisdom V. Bc'cker, 117. 
 Wise r. I'rowse, 407. 
 Wood v. Callagluin, 307. 
 
 c. Corl, 32S. 
 
 f. Pugh, -iDO, 291, 403. 
 
 r. Steele, 429. 
 Wo()dl)iid<;(" r. I'.rigliiim, 342. 
 Woodford V. Dorwiii, 70. 
 Woodiiouse V. Simmons, 482. 
 Woodman v. Churcliill, 201. 
 
 r. Tluirston, 388. 
 Woodrutr V. Hill, 497. 
 
 V. Merchants' Hank, 33, 
 
 r. Monroe, 422. 
 Woods /•. Armstrong, 104. 
 
 V. North, 84. 
 WoodtlioriK? V. Lawes. 300. 
 Woodward r. Row, 256. 
 Woodwortli V. Anderson, 431. 
 
 r. Bank of America, 438 
 Woonsocket Inst, for Sav. v 
 
 lou, 481. 
 Worden v. Nourse^ 306. 
 
 327. 
 
 Bal- 
 
 Worden v. Salter, 193. 
 Workman r. Wright, 422. 
 \\(jiks c. Hershey, 79. 
 Worth V. Case, 78. 
 Wright c. Andrews, 390. 
 
 V. Laing, 4.j9. 
 
 V. Robinson & Co., 404. 
 
 V. Travers, 84. 
 Wvatt V. Hodson, 482. 
 WvUie 1-. Pollen, 25."). 
 Wynne v. Raikes, 2S.->. 280. 
 
 Vale r. Wood. 9. 
 Yeager r. Falwell, 389. 
 York V. Jones, 434. 
 Young V. Bryan, 347. 
 
 f. Durgin. 37-3. 
 
 r. Grote. 280. 
 
 r. Harris. 490. 
 
 r. Lehman, 280. 420. 
 
 V. Ward. 400. 
 
 Zellner v. Cleveland. 120. 
 Zimmerman v. Rote, 439.
 
 THE ELEMENTS OF THE LAW 
 
 OF 
 
 NEGOTIABLE INSTRUMENTS. 
 
 (xxxiii)
 
 ELEMENTS OF THE UW 
 
 OF 
 
 NEGOTIABLE INSTRUMENTS. 
 
 BOOK I 
 
 THE MAKING OF THE INSTRUMENT. 
 
 CHAPTER I. 
 
 NATURE, HISTORY, AND USES OF NEGOTIABLE INSTRU- 
 MENTS. 
 
 SECTIO^nT I. 
 
 NATURE, ORIGIN, AND HISTORY OF BILLS AND NOTES. 
 
 § 1. An instrument is called negotiable when the legal 
 title to the instrument itself, and to the whole amount of 
 money expressed upon its face, may be transferred from one 
 to another by indorsement and delivery by the holder, or 
 by delivery onl}'. The peculiarities which attach to nego- 
 tiable paper are the growth of time, and were acceded for 
 the benefit of trade. 
 
 It was a rule of the common law of England, that a chose 
 in action — by which is meant a claim which the holder 
 would be driven to his action at law to recover — could not 
 be assigned to a stranger, our forefathers conceiving that if 
 claims and debts could be assigned, '' pretended titles might 
 
 [H
 
 2 NEGOTIABLE INSTRUMENTS. § 1.. 
 
 be granted to great men, whereby riglit might be trodden 
 down and the weak oppressed, which he conimon law for- 
 biddeth." ^ The first relaxation of . <rhis rule was made in 
 respect to bills of exchange, and was gradually extended to 
 notes and other securities, until the rule itself disappeared. 
 But while all clioses in action are now transferable, the 
 negotiable instrument is the only species which carries, by 
 transfer, a clear title and a full measure ; and like an instru- 
 ment under seal, imports a consideration. It has, therefore, 
 three j^eculiar and distinguishing characteristics : 
 
 First. Respecting the title. — If a horse, or other personal 
 chattel, or a nonnegotiable instrument, be stolen, no pur- 
 chaser, however innocent or ignorant of the theft, can acquire 
 title against the true owner, who may at any place, and at 
 any time, identify his property and reclaim it. But if a 
 negotiable instrument, payable to bearer, be stolen, and trans- 
 ferred by the thief to a third person in the usual course of 
 business, before maturity and for a valuable consideration, 
 the person so acquiring it may hold it against the world. 
 
 Second, Respecting the amount. — If a nonnegotiable note 
 be assigned, the assignee steps into the shoes of the assignor, 
 and if the instrument has been paid, or is subject to any 
 defense or equity against the original maker, they attach to 
 and encumber it into whosesoever hands it may fall. But 
 a negotiable paper carries the right to the whole amount 
 it secures on its face, and is subject to none of the defenses 
 which might have been made between the original or inter- 
 vening parties, against anyone who acquired it for value, 
 with notice, in the usual course of business and before ma- 
 turity. It is a circulating credit like the currency of the 
 country, and, before maturity, the genuineness and solvency 
 of the parties are alone to be considered in determining its 
 value. It has been fitly termed " a courier without luggage." ^ 
 
 Third. Respecting the consideration. — By the common law, 
 an instrument under seal imports a consideration, by virtue 
 
 iCoke, Lilt. 214a; Chitty on Bills [*7], 9; Edwards on Bills, 55. 
 2 Overton v. Tyler, 3 Barr, 346, Gibson, C. J.
 
 § 2. NATURE, ORIGIX, AND HISTORY OF BILLS AND NOTES. 3 
 
 of the solemn ceremony of its execution ; and no other non- 
 negotiable instrument does. A negotiable instrument, how- 
 ever, by the usages of merchants, prima facie imports a con- 
 sideration. As between immediate parties, the true state of 
 the case may be shown, and the presumption of consideration 
 rebutted. But when the instrument has passed to a bona fide 
 holder for value, and before maturity, no want or failure of 
 consideration can be shown. 
 
 § 2. Bills of exchange were probably the first instruments 
 for the payment of money that were accorded a negotiable 
 quality, though promissory notes, being simpler in form, 
 were doubtless used as evidences of debt before bills of ex- 
 change came in vogue amongst merchants. Certainly these 
 two securities were recognized as negotiable instruments be- 
 fore any other papor representatives of money or property 
 passed currently from hand to hand in like manner as money ; 
 and from them, as fruitful parents, have sprung all the 
 varieties of negotiable instruments now known. 
 
 § 3. Origin and history of bills. — In respect to bills of 
 exchange, it is said by Pothier that there is no vestige 
 of them among the Romans, or of any contract of 
 exchange; for though it appears that Cicero directed one 
 of his friends at Rome, wlio had mon^-y to receive at Athens, 
 to cause it to be paid to his son at that place, and that friend 
 accordingly wrote to one of his debtors at Athens, and 
 ordered him to pay a sum of money to Cicero's son, althougb 
 it is doubtful whether this amounted technically to a bill 
 of exchange.^ 
 
 Chancellor Kent finds warrant for the opinion that bills 
 were used among the Greeks, while Story adheres to a con- 
 trary view.* 
 
 Blackstone says : " This method is said to have been 
 brought into general use by the Jews and Lombards when 
 banished for their usury and other vices, in order the more 
 easily to draw their effects out of France and England into 
 those countries in which they had chosen to reside. But 
 
 ^Pothier dc Change, note G. 
 
 •* 3 Kent Comm., Lect. 44 ; Story on Bills, § 6, note 4.
 
 4 NEGOTIABLE INSTRUMENTS. § 4. 
 
 the invention of it was a little earlier; for the Jews were 
 banished out of Guienue in 1287, and out of England in 
 1290; and in 1236 the use of paper credit w^as introduced 
 into the Mogul Empire in China," ^ There is no certainty 
 on the subject, though it seems clear foreign bills were in 
 use in the fourteenth century, as appears from a Venetian 
 law of that period; and an inference drawn from the statute 
 
 5 Eich. II, Stat. 1, chap. 2, warrants the conclusion that 
 foreign bills were introduced into this country previously to 
 the year 1381." ® And there is reason to believe that bills 
 of exchange were known in England as early as 1307, since 
 in that year King Edward I ordered certain money collected 
 in England for the Pope, not to be remitted to him in coin 
 or bullion, but by way of exchange (per viam Cambii)? 
 
 § 4. Origin and history of promissory notes. — Promis- 
 sory notes have as obscure an origin as bills of ex- 
 change. There is no doubt that they were in use 
 among the Romans, but they seem never to have acquired 
 those negotiable qualities which now import to them their 
 chief value as instruments of commerce. They were in use 
 upon the continent of Europe before their introduction into 
 England, where they first came in vogue about the middle 
 of the seventeenth century, although it has been thought 
 that they have a more recent origin. 
 
 It has been a much debated question whether or not the 
 common law of England recognized the negotiability of 
 promissory notes; and most vigorously was the negative ad- 
 vocated by Lord Holt, who declared that the effort to place 
 them on the same footing as bills of exchange " proceeded 
 from the obstinacy and opinionativeness of the merchants 
 who were endeavoring to set the law of Lombard street 
 above the law of Westminster Hall." This controversy was 
 terminated by the passage of the statute 3 and 4 Aniie, chap. 
 9 [1705] (made perpetual by the statute 7 Anne, chap. 25), 
 which made promissory notes " assignable or indorsable over 
 
 2 Bl. Comm. 467. 
 
 eChitty on Bills [*11], 10. 
 
 7 Anderson's History of Commerce, vol. I, 361.
 
 §§ 5, 6. FOKEIGX AND INLAND BILLS. O 
 
 in the same manner as inland bills of cxcliange are, or may be 
 according to the custom of merchants." 
 
 This statute has been adopted in some of the States of 
 the United States, or in its lieu, other statutes prescribing 
 the criteria and conditions of negotiability. By some au- 
 thorities it is contended that the statute of Anne was only 
 declaratory of their then existing status, while by others 
 the result of Lord Holt's reasoning is concurred in.* 
 
 SECTIOX II. 
 
 FOREIGN AND INLAND BILLS. 
 
 § 5. Bills of exchange are either foreign or inland, — for- 
 eign, when drawn in one State or country, and made pay- 
 able in another State or country; inland, when drawn, and 
 made payable, in the same State or country. Inland bills 
 are of later origin than foreign bills, not having been in 
 use in England at a much earlier period than the reign of 
 Charles 11. Inland bills, like them, were at first more re- 
 stricted in their operation than at present, for it was deemed 
 essential to their validity that a special custom for the draw- 
 ing and accepting them should exist between the towns in 
 which the drawer and acceptor lived; or if they lived in the 
 same town, that such a custom should exist therein.^ At 
 first, also, effect was only given to the custom when the 
 parties were merchants, though afterward extended, as in 
 the case of foreign bills, to all persons Avhether traders or 
 not.i*^ 
 
 § 6. The chief difference between foreign and inland bills 
 is this : that the former must be protested in order to charge 
 the drawer, while the latter need not be." But there are 
 other important differences which will be hereafter con- 
 sidered. 
 
 SCaton V. Lenox, 5 Rand. 31: Davis v. Miller, 14 Gratt. 18; First 
 Nat. Bank v. Hunt, 2.5 Mo. App. 170. 
 
 ftPinkney v. Hall, Ld. Raym. 175: Chitty on Bills [*11, 12], 1(1. 
 
 lOBromwick v. Lloyd. 2 Lutw. 158.5. 
 
 II Daniel on Xeuotiable Instruments. § 926 et seq.
 
 C NEGOTIABLE INSTRUMENTS. §§ 7-0. 
 
 § 7. When bills are deemed foreign in England and in this 
 country. — In Englaiul, a bill drawn in Ireland and payable 
 in England is deemed a foreign bill/^ but one drawn and 
 payable in Great Britain is an inland bill.^^ For the pur- 
 poses of the law of negotiable instruments, the several 
 States of the United States are foreign to each other. ^"^ 
 
 Thus a bill drawm in IlTew York city, N. Y., and payable 
 in Chicago, 111., is a foreign bill, while one dra^vn in Phila- 
 delphia, Pa., and payable in Pittsburg, in the same State, 
 is an inland bill of exchange. 
 
 § 8. Kules of decision of Federal courts. — In the courts of 
 the United States, the decisions are sometimes in conformity 
 with those of the State courts of last resort in respect to 
 the liabilities of parties to bills and notes, but not uni- 
 formly. Where any controversy arises as to the liability 
 of a party to a bill of exchange, promissory note, or other 
 negotiable paper, in one of the Federal courts of the United 
 States, ^vhich is not determined by the positive words of a 
 State statute, or by its meaning as construed by the State 
 courts, the Federal courts will apply to its solution the gen- 
 eral principles of the law merchant, regardless of any local 
 decision.-^^ 
 
 § 9. The face of the bill does not always disclose its char- 
 acter. — If the bill does not disclose, on its face, the place 
 where drawn, the omission may be supplied by evidence, 
 but the court wall not take judicial cognizance of political 
 divisions of foreign States, and therefore will not conclude 
 from the fact that a given city is named, that the place 
 named is situated in a certain country or State. For exam- 
 ple: it has been held that a bill dated " Dublin," the court, 
 without proof, will not presume Avas dated at Dublin, Ire- 
 land, or that a note dated " Philadelphia," was made in 
 
 12 Mahoney v. Ashlin, 2 B. & Ad. 478. 
 
 13 Ai.iiier V. Clark, 2 Cromp., M. & R. 468. 
 
 14 Buckner v. Finley, 2 Pet. 580 ; Armstrong v. American Exch. Nat. 
 Bank, 133 U. S. 433. 
 
 15 Swift V. Tyson, 10 Pet. 1; Railroad Co. v. Nat. Bank, 102 U. S. 14.
 
 § 10. THE EFFECT OF A BILL OF EXCHANGE. 7 
 
 Pennsylvania, or that a hill (hitod " Xew Orleans," was 
 drawn in Louisiana."' 
 
 If the instrument, upon its face, puiiDorts to be a foreign 
 hill (although actually drawn and payable in the same 
 country), and innocent third parties take it in the belief that 
 it is what it appears to be, the presumption that it is foreign 
 will be conclusive. ^^ As between the original parties and 
 others having notice of the circumstances under which it 
 was drawn, the question would be doubtful, although the 
 better view seems to be that it would be ovon then held to 
 be a foreign bill.^^ 
 
 If a bill be on its face an inland bill, the fact that it 
 was actually drawn and delivered in a foreign State will 
 not divest it of its inland character. The principle is that 
 it is competent for the parties to provide, by agreement, 
 that it shall be governed by the law^s of any particular State 
 or countr}''.^^ 
 
 SECTIOX ITT. 
 
 THE EFFECT OF A BILL OF EXCILVNGE WHEN IT IS AN ASSIGN- 
 MENT, AND WaiEN NOT. 
 
 § 10. Bills of exchange and promissory notes have 
 long been exceptions to the rule of the common law 
 tliat interdicted assignments of things in action. Courts 
 of equity have for many years discredited the common law 
 rule, and held valid the assignments of a naked possibility,^ 
 and courts of law, following in the footsteps of equity, now 
 recognize and enforce such assignments brought in the name 
 of the assignor for the benefit of the assignee."^ 
 
 The effect of the dra\ving of a bill of exchange, upon the 
 
 16 Kearney v. King, 18 Eng. C. L. 28; Yale v. Wood, 30 Tex. 17; Rig- 
 gin V. Collier, 6 Mo. 5f)8. 
 
 1" Daniel on Negotiable Instruments, § 12; Lennig v. Ralston, 23 Pa. 
 St. 137. 
 
 i» Daniel on Negotiable Instruments, § 12; Parsons on Notes and 
 Bills, 57. 
 
 10 Strawbridge v. Robinson, 5 Oilman, 472. 
 
 20 3 Leading Cases in Equity [*G52], 307. 
 
 2iMandeville v. Welch, 5 Wheat. 277; Wheatley v. Strobe. 12 Cal. 
 98.
 
 8 NEGOTIABLE INSTRUMENTS. §§11.12. 
 
 rights and interests of the parties in the fund in the hands 
 of the drawee — whether or not it operates as an assign- 
 ment of the funds — is always a practical, pertinent ques- 
 tion. 
 
 § 11. What is the effect, if drawn for the whole amotini 
 of the fund in the hands of the drawee. — If the bill is ac- 
 cepted, it is generally held to constitute an assignment,^ 
 but the doctrine that an unaccepted bill for the entire debt 
 or fund operates as an equitable assignment thereof is op- 
 posed to the current of authority in the United States, and 
 in England as well, it being considered, that the bill of ex- 
 change is an independent security resting on the commer- 
 cial responsibility of the parties thereto.^'^ But it is con- 
 ceded that the bill, whether for the whole of the fund or 
 debt, or only a part, may be evidence to show an assignment ; 
 and that with other circumstances indicating that such was 
 the intention, will vest in the holder an exclusive claim to 
 the debt or fund, and bind it in the hands of the drawee 
 after notice.^ ^"^eiy slight circumstances in addition to the 
 bill ought to effectuate an equitable assignment; and while 
 the current of authority is undoubtedly otherwise, the bet- 
 ter opinion, as it seems to us, is that a bill for the entire 
 amount of a debt or fund should operate as an equitable 
 assignment thereof. The doctrine of equitable assignment 
 is the creature of courts of equity, and the phrase " equi- 
 table assignment " is used because, by the technicalities of 
 pleadings at law, no legal assignment can he effectuated."'' 
 
 § 12. What is the effect of a nonnegotiable order for the 
 whole of the fund. — It may be regarded as a settled doc- 
 trine, that an order founded upon a good consideration, 
 given for a specific debt or fund owing by or in the hands 
 
 23 Daniel on Negotiable Instruments, § 18; Mandeville v. Welch. .S 
 Wheat. 277: Buckner v. Sayre, 17 B. Monroe, 7o4. 
 
 23 Bank of Commerce v. Bogy, 44 Mo. 15; Gramnel v. Carmer, 55 
 Mich. 201. 
 
 24 First Nat. Bank v. Dubuque 8. R. Co., 52 Iowa, 'M8; Bank of 
 Commerce v. Bogy, 44 Mo. 17. 
 
 25 Daniel on Negotiable Instruments, § 20; First Nat. Bank v. Coates, 
 8 Fed. 540.
 
 § 13. THE EFFECT OF A BILL OF EXCHANGE. 9 
 
 of a third person, operates as, or rather is evidence of, an 
 equitable assignment of the demand to the holder.^" It is 
 clearly an assignment, as between the drawer and the payee, 
 because so intended.-^ It is equally so as between them and 
 the drawee, as soon as it is presented to him and he as- 
 sents,^** and whether he assents or not, the holder may, in 
 equity, recover the debt or fund from him."^ 
 
 § 13. What is the effect of a bill of exchange or nonnego- 
 tiable order for part of a fund. — The doctrine is laid down 
 with emphasis by many authorities that an order or a bill 
 drawn for part of a fund does not operate as an assignment 
 of that part, or give a lien as against the drawee, unless he 
 consents to the appropriation by an acceptance of the draft. 
 Mr. Justice Story, delivering the opinion of the United 
 States Supreme Court and speaking of the rights of the 
 debtor, said: " He has a right to stand upon the singleness 
 of his original contract, and to decline any legal or equitaldc 
 assignments by which it may be broken into fragments. 
 When he undertakes to pay an integral sum to his creditor, 
 it is no part of his contract that he shall be obliged to pay 
 in fragments to any other persons. So that, if the plaintift' 
 could show a partial assignment to the extent of the bills, 
 it would not avail him in support of the present suit." ^° 
 
 This doctrine is correct in so far as it applies to legal 
 assignments. But it has been held in numerous cases, and, 
 we think, should now be regarded as law, that a nonnego- 
 tiable order for part of n fund operates as an equitable as- 
 signment pro tanto.^^ Clearly this is the case when it has 
 been accepted or assented to by the drawee.^^ And when 
 
 2ii Mandeville v. Welch, 5 Wheat. 277: Anderson v. De Soer. G Giatt. 
 3G4; Parker v. City of Syracuse, 31 N. Y. 379. 
 
 27:^rorton v. Xoylar. 1 Hill (N. Y.) .583: Gardner v. Xat. City Bank. 
 39 Ohio St. G04. 
 
 28 Johnson V. Thayer, 17 Me. 403; Desesse v. Napier, 1 MoCord. IOC. 
 
 21) Story's Eq. Jur., § 1044. 
 
 30Mandeville v. Welch, ."> Wheat. 277: Cranincl v. Carmer. .1.'. :Mi(h. 
 201; Cowperthwaite v. Sheflield. 1 Sandf. 41G. 
 
 31 Christmas v. Russell, 14 Wall. 84; Pope v. Huth. 14 Cal. 407. 
 
 32Vreeland v. Blunt, G Barb. 182; Cults v. Perkins, 12 Mass. 20G.
 
 10 NEGOTLiBLE INSTKUMENTS. § 14. 
 
 it has not been accepted, our own view is this: that a non- 
 negotiable order for part of a fund does operate as an 
 equitable assignment pro tanto as between the drawer and 
 payee, because obviously so intended. And if the payee or 
 indorsee goes into equity, or the parties are brought therein 
 by any proceeding, so that all of them are before the court, 
 the holder of the order may enforce it as an equitable as- 
 signment as against all subsequent claimants, whether by 
 assignment from the drawer, or by legal process served upon 
 the drawee.^^ 
 
 § 14. In jSTew York there have been numerous cases in- 
 volving the questions under consideration, and there the 
 doctrine obtains that a bill or check payable generally, does 
 not operate as an assignment of the part of the fund for 
 which it is drawn, unless assented to by the drawee;^'* but 
 that an order for part of a specified fund then due or to 
 become due operates as an assig-nment, and that the drawee 
 may be compelled by action to apply the fund as directed, 
 after notice of the assignment.^^ In that State the rules of 
 practice are such that the same effect is given to the partial 
 order at law as in equity; and hence we do not observe in 
 the decisions of its courts the distinctions generally taken 
 between legal and equitable assignments.^*^ 
 
 3''' Daniel on Negotiable Instruments, § 23 ; 3 Leading Cases in Equity, 
 350 ; Pease v. Landauer, G3 Wis. 20. 
 
 3-t Attorney-General v. Continental Life Ins. Co., 71 N. Y. 325; Throop 
 Crain Cleaner Co. v. Smith, 110 N. Y. 90. 
 
 35Ehrichs v. De Mill, 75 N. Y. 370; Brill v. Tuttle, 81 N. Y. 457. 
 
 30 Morton v. Naylor, 1 Hill, 583.
 
 CHAPTER II. 
 
 DIFFERENT KINDS OF NEGOTIABLE INSTRUMENTS. 
 
 SECTION I. 
 
 DEFINITIONS OF BILLS OF EXCILYNGE AND PROMISSORY NOTES, 
 AND THE DIFFERENCES BETWEEN THEM. 
 
 § 15. Bills of exchange. — A bill of exchange is an open 
 letter addressed by one person to a second, directing him, 
 in effect, to pay absolutely, and at all events, a certain sum 
 of money therein named, to a third person or to any other 
 to whom that third person may order it to be paid; or it 
 may be payable to bearer or to the drawer himself.^ 
 
 The person who draws is called the drawer, the one on 
 whom drawn, the drawee, and to whom payable, the payee. 
 
 ^ 16. Promissory notes. — A promissory note is an open 
 promise in writing by one person to pay to the order of 
 another therein named, or to bearer, a specified sum of 
 money absolutely and at all events." The person who makes 
 the note is called the maker, and the one to whom the 
 promise is made, the payee. 
 
 The term " holder " is a general word applied to anyone 
 in actual or constructive possession of the bill or note, and 
 entitled in law to recover or receive its contents from the 
 parties to it. 
 
 § 17. Difference between bills and notes. — Tn their original 
 structure, a bill of exchange and a promissory note do not 
 strongly resemble each other. Tn a bill, there are three 
 original parties: drawer, drawee, and payee; in a note only 
 two: maker and payee. In a bill the acceptor is the primary 
 
 1 For various definitions of a bill of exchange and a promissory note, 
 i=ee Daniel on Negotiable Instruments, § 27, note. 
 
 2 Dobbins v. Oberman, 17 Neb. Ifi"): Daniel on Negotiable Instruments, 
 § 28. 
 
 nil
 
 12 DIFFEKEXT KINDS OF XEGOTIABLK I NSTKUMEXTS. § IS. 
 
 debtor. In a note the maker is the only debtor. But if the 
 note be transferred to a third party by the payee, it becomes 
 strikingly similar to a bill. The indorser becomes then, as 
 it were, the drawer; the maker, the acceptor; and the in- 
 dorsee, the payee.^ 
 
 SECTION II. 
 
 COUPOX BONDS. 
 
 § 18. Coupon bonds are issued by the Federal Govern- 
 ment, by the States, by territorial governments or local 
 divisions thereof, by municipalities, by railroad, canal, and 
 steamboat companies, and all manner of trading corpora- 
 tions. A vast portion of the wealth of the country is repre- 
 sented in " coupon bonds," and the subject is one of grow- 
 ing importance. 
 
 § 19. Description of coupon bonds. — A coupon bond is an • 
 instrument complete in itself, and yet composed of several 
 distinct instruments, each of which is in itself as complete 
 as the whole together. As originally issued, the " coupon 
 bond " consists of (1) an obligation to pay a certain amount 
 of money at a future day; and (2) annexed to it is a series 
 of coupons, each one of which is a promise for the payment 
 of a periodical instalment of interest. The contract be- 
 tween the payor and the holder is contained in the bond, 
 but the coupons are furnished as convenient instruments 
 to enable the holder to collect interest without presenting 
 the bond, by separating and presenting the proper coupon; 
 and it also enables him to anticipate his interest by nego- 
 tiating the coupon which represents it, to another person, 
 at any time before its maturity.^ 
 
 § 20. 'I'he term '^ coupon " is derived from the French 
 " couper," meaning "■ to cut," and has been well defined to 
 be " one of the interest certificates attached to transferable 
 bonds, and of which there are usually as many as there are 
 payments to be made — so called, because it is cut off when 
 
 3 Daniol on Xef^otiable Instruments, § 29. 
 
 4 Daniel on Xegotiable Instruments, § 1488.
 
 §§ 21, 22. courox ijonds. lo 
 
 it is presented for payment. They may he severed and 
 negotiated before maturity of the interest they represent, 
 and thns pass as separate and independent negotiable instni- 
 nients." Coupons are substantially a minute repetition of 
 what is contained in more elaborate terms in the bond it- 
 self. They are more closely assimilated to promissory 
 notes than to bank notes, bills of exchange, or checks, al- 
 though in their formal wording they may sometimes less 
 resemble them.'^ 
 
 § 21. Negotiability of coupon bonds. — Since the seal does 
 not affect the negotiability of such securities issued by cor- 
 porations and States, there is no reason why the same prin- 
 ciple should not be extended to them when issued by indi- 
 viduals. As a general rule a bond is a sealed instrument, 
 but it does not follow that it always is or must be. AVhile 
 it is usual that such instruments are authenticated by a 
 corporate seal, the old idea that States and corporations can 
 only bind themselves under seal is utterly obsolete. 
 
 There no longer remains a shadow of doubt that the 
 coupon bonds of the United States, of the several States, 
 and of municipal and other corporations, when expressed in 
 negotiable words, are as negotiable to all intents and pur- 
 poses as bills of exchange or promissory' notes.** 
 
 § 22. Municipal bonds. — If the bonds are issued by a mu- 
 nicipal or public coi*j)oration, the purpose must be a public 
 one. In the United States the following propositions are 
 sustained by the weight of authority: 
 
 1. That whenever a municipal corporation has power con- 
 ferred to contract a debt, borrow money, or issue a nego- 
 tiable security, it is to be regarded quoad lioc as a private 
 corporation. 
 
 2. That a municipal corporation has implied power to 
 contract a debt Avhenever necessary to carry' out any power 
 conferred upon it. 
 
 '"'Daniel on Xegotiahlo Instruments, §§ 1480, 1490. 
 (■•Daniel on Negotiable Instruments, § 1.500; Morgan v. United States, 
 113 U. S. 491.
 
 li DIFFEKEXT KINDS OF NEGOTIABLE INSTRUMENTS. § 23, 
 
 3. That whenever it may contract a debt, it may borrow 
 money to pay it. 
 
 4. 'lliat whenever it may contract a debt or borrow 
 money, it may issue its negotiable coupon bonds for its 
 payment.^ 
 
 § 23. As to what purposes are public. — The construction 
 and grading of streets;^ the construction of waterworks;'^ 
 of a bridge ;^^ of a town hall;^^ gas works ;^- markets ;^^ the 
 providing of lire engines ;^^ the laying out of cemeteries/^ 
 are proper objects of municipal care, and undoubtedly the 
 Legislature may authorize the municipality to contract with 
 reference to them, to borrow money for the purpose of 
 effecting those objects, and to issue its negotiable securi- 
 ties therefor.^*' But the loaning of money to enable citizens 
 to rebuild their burned houses,^^ to equip and furnish manu- 
 facturing establishments of individuals,^* to construct saw 
 or grist mills^^ (unless such mills be made public institu- 
 tions, in which case it would be different"^), to improve a 
 water privilege and manufacture lumber,'^ to establish a 
 citizen in business,^ to provide destitute citizens with pro- 
 visions and grain for seed and feed,^^ would not be mthin 
 the scope of public purposes, and the Legislature could con- 
 fer no authority to subscribe to such objects. 
 
 7 Daniel on ISTegotiable Instruments, § 1527ct. 
 
 8 Rogers v. Burlington, 3 Wall. 362. 
 Hale V. Houghton, 8 Mich. 458. 
 
 10 Commissioners v. Chandler, 90 U. S. 205; United States v. Dodge 
 County, 110 U. S. 156. 
 
 11 Greeley v. People, GO 111. 19. 
 
 12 City of Aurora v. West, 9 Ind. 74. 
 
 13 State V. Madison, 7 Wis. 688. 
 
 14 Robinson v. St. Louis, 28 Mo. 488. 
 
 15 Mills V. Gleason, 11 Wis. 470; Robinson v. St. Louis, 28 Mo. 488. 
 
 16 1 Dillon on Municipal Corporations, § 66. 
 
 17 Lowell V. Boston, 1 1 1 Mass. 454. 
 
 18 Loan Assn. v. Topeka, 20 Wall. 655. 
 
 19 Osborne v. Adams County, 109 U. S. 1. 
 
 20 Township of Burlington v. Beasley, 94 U. S. 314. 
 
 21 Weismer v. Village of Douglass, 4 Hun, 211. 
 
 22 Cooley on Constitutional Limitations, 494. 
 
 23 State ex rel. Griffith v. Osawkoe Township, 14 Kan. 418.
 
 §§24,25. IJA.NK NOTKS. 15 
 
 Whetlicr or not the construction of a railroad or other 
 highway is a public puii:)ose to which a municipal corpora- 
 tion may be authorized to contribute is a much debated 
 question. The Supreme Court of the United States, in 
 numerous decisions, has afiirmed that it is, and so likewise 
 have many of the State courts of last resort.^"* 
 
 SECTION III. 
 
 BANK NOTES. 
 
 § 24. Bank notes or bank bills (as they are equally as 
 often called) are the promissory notes of incorporated banks, 
 designed to circulate like money, and payable to bearer on 
 demand. 
 
 The terms " bank notes " and " bank bills " are of the like 
 signification, and for the purposes of interpretation, both 
 in criminal and civil jurisprudence, are equivalent and inter- 
 changeable. 
 
 In form and substance they are promissorj^ notes, and 
 they are governed by very many of the principles M'liieh 
 apply to the negotiable notes of individuals given in the 
 course of trade. But they are designed to constitute a cir- 
 culating medium, and this circumstance imparts to them 
 peculiar characteristics, and essentially varies the rules 
 w'hich govern promissory notes in general. They have been 
 held not securities for monev, but monev itself.^ 
 
 § 25. Chief characteristics of — Bank bills are (1) always 
 payable on demand;^" (2) usually payable to bearer, though 
 sometimes expressed to be payable to a person named or 
 bearer ;^^ (3) a lawful tender in payment of debts, unless 
 objected to because they are not money .^ 
 
 24 Railroad Co. v. County of Otoe, 16 Wall. 667; Harter v. Kernochan, 
 103 U. S. r)68; Knox County v. Aspinwall, 21 How. 539; Daniel on 
 Negotiable Instruments, § 1523 and cases cited in note. 
 
 25Southcot V. Watson, 3 Atk. 226; Daniel on Negotiable Instru- 
 ments, § 1664. 
 
 20 Daniel on Negotiable Tnstnnnents, § 1666. 
 
 2VDaTiicl on Negotiable Instruments, § 1665. 
 
 28 Daniel on Negotiable Instruments, § 1672a.
 
 IG DIFFERENT KINDS OF NEGOTIABLE INSTRUMENTS. § 26. 
 
 Bank notes are not, legally speaking, money, but in a 
 popular sense are often spoken of as money, and are con- 
 ventionally used in its stead with tke like etfect.^ 
 
 SECTIOISr IV. 
 
 CERTIFICATES OF DEPOSIT. 
 
 § 26. Definition. — A certificate of deposit is a receipt of 
 a bank or banker for a certain sum of money received upon 
 deposit, and it is generally framed in such a form as to 
 constitute a promissory note, payable to the depositor, or to 
 the depositor or order, or to bearer. 
 
 It appears to have been at an early day the practice of 
 the goldsmiths in England, who generally engaged in the 
 business of banking, to give receipts to their customers for 
 moneys deposited with them, in the form of promissory 
 notes payable to the bearer on demand, or to the depositor 
 or order.^*^ And the statute of Anne placed them, as other 
 promissory notes, on the same footing as bills of exchange.^^ 
 Thus originated the instrument now so commonly used, and 
 called a certificate of deposit, which is, in short, generally 
 a promissory note for the payment of an amount which it 
 certifies to be deposited in bank. 
 
 ^ 27. Negotiability of. — It w^as once questioned whether 
 or not certificates of deposit are negotiable, but there is now 
 no doubt that they are, where expressed in negotiable words. 
 This view has been adopted by the Supreme Court of the 
 United States.^^ 
 
 In order, however, to be negotiable, a certificate of de- 
 posit must possess the requisite features of certainty in 
 respect to parties, and time and mode of payment; and the 
 same causes wdiich deprive bills and notes of negotiability 
 would affect it in like manner. Thus, if payable " in cur- 
 
 20 Daniel on Negotiable Instruments, ■§ 1G72. 
 
 30 Nicholson v. Sedgwick, 1 Ld. Raymond, 180; Chitty on Bills [*522], 
 501. 
 
 31 3 and 4 Anne, chap. 9. 
 
 32 Miller v. Austin, 13 How. 218.
 
 I 28. ciiKCKs. IT 
 
 reiic-v " it woiiM iint lir iiciii. liable according to the prin- 
 ciple's which jtrcvail as lo lulls and notes;'" though it has 
 been held otherwise.^"' ^o if payable in " United States six 
 per cent, interest-bearing bonds," it is a mere contract to 
 deliver such bonds, and not negotiable.^^ 
 
 SECTION V. 
 
 CHECKS. 
 
 § 28. A check is (1) a draft or order (2) npon a bank or 
 banking house, (:}) jjurporting to be drawn upon a (h-posit 
 of funds (4) for the payment at all events of a certain sum 
 of money, (5) to a certain person therein named, or to 
 him or his order, or to bearer, and (G) payable instantly on 
 demand. This definition has been approvingly quoted.^ 
 
 The Supreme Court of the United States, in the leading 
 case of Merchants Bank v. State Bank, says of checks when 
 contrasted with bills of exchange: "Bank checks are not 
 inland bills of exchange, but have many of the properties 
 of such commercial paper, and many of the rules of the law 
 merchant are alike applicable to Itoth. Each is for a specified 
 sum, payable in money — in both cases, there is a drawer, 
 a drawee, and payee. Without acceptance, no action can be 
 maintained by the holder, upon cither, against drawee. The 
 chief points of difference are that (1) a check is ahuays 
 drawn on a bank or banker; (2) the drawer is not discharged 
 by the laches of the holder in presentment, unless he can 
 show that he has sustained some injury by the default ; (4) 
 it is not due nntil payment is demanded, and the statute of 
 limitations runs only from that time; (5) it is, by its face, 
 the appropriation of so much money of the drawer, in the 
 hands of the drawee, to the payment of an admitted liability 
 of the drawer; (0) it is not necessary that the drawer of a 
 
 33Huse V. Hamblin. 29 Iowa. HOI: Lindsay v. McClelland, 18 Wis. 
 481. 
 
 •^^ Pardee v. Fish. GO X. Y. •205: Drake v. Markle, 21 Ind. 433. 
 
 35 Easton v. Hyde, 13 Minn. 90. 
 
 36 Blair & Hoge v. Wilson, 28 Gratt. 170; Ridgely Bank v. Patton. 
 100 Til. 484. 
 
 2
 
 IS DirFEKE2sT KINDS OF NEGOTIABLE INSTRUMENTS. § 29. 
 
 hill slioiikl have fimds in the hands of the drawee — a check 
 in sneh casfc would be a fraud." **' 
 
 § 29. (1) A check is a draft or order. — A bill is also a 
 draft or order; and it is often said that a check is, in 
 legal elfect, a bill of exchange drawn on a bank or bank- 
 ing house, with some peculiarities.^^ In some cases it is 
 called a bill payable on dcmand,^'-^ and in others an in- 
 land bill, or in the nature of an inland bill, payable on de- 
 mand ;"*'' and the expression that a check is " like a bill " has 
 been criticized on the groivid that " niJill simile est idem/^ 
 whereas " checks are bills, or rather bill is the genus, and 
 check is a species." ^^ In form a check is a bill on a bank- 
 ing house, and it is perfectly correct to say that it is a bill 
 with some peculiarities, or in other words, a species of bill 
 of exchanae. 
 
 § 30. (2) It is absolutely necessary that the draft, in order 
 to be a check, should be drawn upon a bank or banker. — 
 Upon this point the authorities are agreed."*" A bill may 
 also be drawn upon a banker; and, therefore, while it is 
 necessary that a check should be so drawn, that alone does 
 not distinguisli it. It does not seem necessary that the 
 drawee, when an individual, should be described as a banker; 
 and au order addressed simply to " Messrs. A. & B.," has 
 been held a check, it being proved that they were bankers,^^ 
 although on sound principle it would seem that the instru- 
 ment should not be so considered unless its face showed that 
 it was drawn on a banking house. 
 
 § 31. (3) A check purports to be drawn upon a deposit. — 
 
 It 1? frequently said a check is drawn upon a deposit 
 
 37 Merchants' Bnnk v. State Bank. 10 Wall. fi47. 
 
 3?BilIperrv v. Eranfli. 10 Oratt. 418; Cniger v. Armstrong, .3 Johns. 
 Cas. .5: State v. Crawford, 1.3 La. Ann. 301. 
 
 SOHarker v. Anderson, 21 Wend. 372: Edwards on Bills, 396. 
 
 40 Merchants' Bank v. Spicer, Wend. 44.5; Purcell v. Allemong, 22 
 Gratt. 742. 
 
 41 :\ratter of Bro^^'n. 2 Story, .502. 
 
 42 Espy V. Bank of Cincinnati, 18 Wall. G20; Bowen v. Newell, 8 
 X. Y. 19.5: Xortliwc-tcrn Coal Co. v. Bo^vn^an, 69 Iowa, 152. 
 
 43 Planters' Bank v. Kesee, 7 Ileisk. 200.
 
 g :]-2. CHECKS. i'J 
 
 ill the banker's hands ;"'^ and the fact that it is so 
 drawn has been held necessary to constitute the th-aft u 
 check/'' Ihit this cannot \>v the true criterion. It is not 
 the fact that the order is actually drawn on a deposit, but 
 the fact that it purports to be so drawn, which constitutes 
 it a check; and it is more accurate to say that it is ui)on its 
 face a draft upon a dei)osit.^^ To hold otherwise would au- 
 thorize the construction of a written contract by the li«;ht 
 of an extraneous fact of wdiich the holder had no notice. 
 If there were no deposit, it would be a fraudulent check — 
 but a check, nevertheless — and we cannot conceive of a 
 wider departure from ])rinciple than to hold that the fraud 
 varied the nature of the instnmient itself."*' 
 
 In the case of Merchants' Bank v. State Bank, to which 
 reference has already been made, a contrary princi])le was 
 announced, but, for the reasons herein assigned, the de- 
 cision in this particular does not seem to be consonant ^\^th 
 correct principle. 
 
 § 32. (4) A check must be for the payment at all events 
 of a certain sum of money. — In this respect it does not 
 differ from other negotiable instruments; and though, per- 
 liaps, it might still be termed a check, although not pay- 
 able in money, by which is meant the legal tender currency 
 of the countrv, it would certainlv not be negotiable if ex- 
 pressed to be payable '' in bank bills " or " in currency," "^^ 
 or if it lacked words of negotiability,"*^ or were deficient in 
 any of the characteristics in respect to certainty in fact 
 and time of pavment and party to whom payment is to be 
 made.^'^ 
 
 4-1 ;Morrison v. Bailey, 5 Ohio St. l:?; Espy v. Bank ot Cincinnati. IS 
 Wall. 620. 
 
 •»•"> Planters' Bank v. Keseo. 7 Heisk. 200. 
 
 ^'! Clianipion v. Gordon, 70 Pa. St. 476; Deener v. Brown, 1 Mac- 
 Arthur. S.'iO. 
 
 47 Merchants' Bank v. State Bank. 10 Wall. 647. 
 
 4SBank of Mobile v. Brunn, 42 Ala. 108; Little v. Phoenix Bank, 2 
 Hill (N. Y.) 425. 
 
 ■»f> Partridge v. Bank of England, 9 Q. B. 396. 
 
 r>o Daniel on Xegotiahle Insfrniiicnts, § l.i70.
 
 >'^. 
 
 '20 DlFl-'KREAT KIXDS OF IvEGOTIAlJLE lA'STUU-MKATS. g 31 
 
 g 33. (5) A check is payable to a certain person therein 
 named, or to liim or his order, or to bearer. — There is no 
 comiuon liuv obligation, according to the English au- 
 thorities, upon a bank to pay checks other than those pay- 
 able to bearer, it being considered that the bank has a right 
 to require that it should not run the risk of mistaking the 
 signature of the party to whose order it is payable, and 
 thus becoming responsible in the event of its turning out to 
 bo a forgery ;^^ and this has led some text writers and 
 judges to declare that a check must be payable to bearer. ^^ 
 But the custom of banks for years (and it prevails every- 
 where, certainly in this country) is to pay checks drawn 
 payable to order, and as to the law in the United States, it 
 has been properly said that the opposite doctrine " is un- 
 supported either by reason or authority." ^^ 
 
 § 34. (6) A check is payable instantly on demand. — 
 This is, as we conceive, the touchstone by which a check 
 is tested.^'* Usually, no time of payment is expressed upon 
 its face, but all commercial instruments in which no time of 
 payment is expressed are understood to be, and impliedly 
 are, payable on demand; and when so payable by implication, 
 or in express terms, they are payable instantly, without the 
 allowance of grace, which pertains to those payable on a 
 particular day.^^ The whole theory and use of a check points 
 to its immediate payability as its distinguishing feature, and 
 its name imports it. A person deposits money with his bank 
 or banker, where it is subject at any time to his order. By 
 an order he appropriates so much of it to another person, 
 and the bank or banker, in consideration of its temporary 
 
 51 Bellamy v. Majoribanks, 8 Enj?. L. & Eq. 519. 
 
 52Byles on Bills [*].3], 84 fSharswood's ed.) ; Chitty on Bills \*5U], 
 578; Woodruff v. Merchants' Bank, 25 Wend. G72. 
 
 53 Dodge V. National Exch. Bank, ,30 Ohio St. 8. 
 
 54 Harrison v. Nicollet Nat. Bank, 41 ]\linn. 488; Merchants' Nat. 
 Bank v. Ritzinjjer, 118 111. 480; Georgia Nat. Bank v. Henderson, 40 
 Ga. 496; Northwestern Coal Co. v. Bowman, 09 Iowa, 152; Daniel on 
 Negotiable Instruments, § 1572. 
 
 55 Daniel on Negotiable Instruments. § 617; Merchants' Bank v. 
 State Bank, 10 Wall. 647.
 
 §§ 35, 36. CHECKS. 21 
 
 use of the money, agrees to i)ay it in whole, or in parcels, 
 to the depositor's order when demanded.^'' But he does not 
 agree to contract to pay at a future day by acceptance, and 
 the depositor cannot require it. It follows that a check is 
 not entitled to grace.^' And the preponderance of authority 
 sustains the N-iew that if the instnuuent is not immediately 
 payable, it is classed as a bill of exchange.^* 
 
 § 35. Certification of checks. — The holder has no right to 
 demand from the bank anything but payment of the check. 
 And the bank has no right, as against the drawer, to do 
 anything else but pay it. Consequently there is no such 
 thing as acceptance of checks in the ordinary sense of the 
 term. For acceptance ordinarily implies that the drawer 
 requests the drawee to pay the amount at a future day, and 
 the drawee "' accepts " to do so, thereby becoming the prin- 
 cipal debtor, and the drawer being his surety. But still, by 
 consent of the holder, the bank may enter into an engage- 
 ment quite similar to that of acceptance, by certifying the 
 check to be " good " instead of paying it.^^ 
 
 § 36. Effect of certification — By certifying a check (1) 
 the bank becomes the principal and only debtor; (2) the 
 holder by taking a certificate of the check from the bank, 
 instead of requiring payment, discharges the drawer;^ (3) 
 and the check then circulates as the representative of so 
 much cash in bank, payable on demand to the holder. Such 
 in brief is the eifect of the certification of a check. It has 
 been said to be, and obviously is, " equivalent to accept- 
 ance " '"^ in respect to the obligation it creates upon a bank; 
 
 56 Goodwin V. American Xat. Bank, 48 Conn. 550; Daniel on Xo.co- 
 tiablo Instruments, § 1572. 
 
 57 Morse on Banking. 24.3; 2 Parsons on Notes and Bills, OS. 00; 
 Daniel on Negotiable Instruments, § 1575. 
 
 58 Harrison v. Nicollet Nat. Bank, 41 Minn. 488: Bowen v. Newell, 
 5 Sandf. (N. Y.) .320; Daniel on Negotiable Instnuiients. «j 1574. 
 
 50 Daniel on Negotiable Instriiments. § 1001. 
 
 *iOBoyd V. Nasmith, 17 Ont. 42, citing Daniel on Negotiable Instru- 
 ments, § 1001a. 
 
 «l Merchants' Bank v. State Bank, 10 Wall. 647.
 
 22 DUFEKEA'T KISDH OF NEGOTIABLE INSTRUMENTS. § 37. 
 
 l.ut it would be confounding terms to regard it as altogether 
 the same thing in its effect upon the relations of the parties. 
 
 The certification by a bank of an acceptance made pay- 
 able at its counter by one of its customers, has the same 
 effect and imports the same obligation on the part of the 
 bank as the like certification of a check drawn upon it.^- 
 It is a short-hand certificate of deposit."^^ 
 
 § 37. Holder taking certified check discharges drawer. — 
 The holder, by taking a certificate of the check instead of 
 payment, discharges the drawer. This results from what 
 lias been already said. If the bank refuses payment, the 
 drawer should be notified. But if the holder receives some- 
 thing else in lieu of payment, it is the same as payment; 
 and as the drawer cannot legally mthdraw the funds after 
 checking on them, it would be unjust that they should be 
 held at his risk or his liability on the check extended.*^ 
 The indorser of a check who is a new drawer Avould also 
 ordinarily be discharged if the holder had it certified instead 
 of requiring payment; but if the indorser request or con- 
 sent to the certification, this rule would not apply ;^^ and 
 if tlio holder of a certified check indorse it, his indorsee may 
 hold liim liable as well as the bank.^^ 
 
 § 38. Form of certification, and by whom made. — Xo par- 
 ticular w^ords are essential to a legal certification of a check 
 — it is usual to use the word " good " *^^ — it is sufficient if 
 tho names or initials of the proper officer is written on, or 
 across, the face of the check.''^ In England, by statute, a 
 distinct promise, written and signed, is requisite. In the 
 United States, some authorities hold that a verbal statement 
 
 62 Flour City Xat. Bank v. Tradprs' Xat. Bank, 42 Hun, 244. 
 
 63 Thomas v. Bank of Britisli North America, 82 N. Y. 1; Farmers' 
 Bank v. Bank of Allen County (Tenn.), 12 S. W. .545. 
 
 64 First Xat. Bank v. Leach, .52 X. Y. ,3.50; Morse on Banking, 382; 
 Essex County Xat. Bank v. Bank of Montreal. 7 Biss. in7. 
 
 65 Mutual Xat. Bank v. Rotge, 28 La. Ann. 9.33. 
 
 66 :Mutual Nat. Bank v. Rotge, 28 La. Ann. 933 ; Daniel on Negotiable 
 Instruments, § 1004. 
 
 67Barnet v. Smith. 10 Fost. 2.56. 
 68 Morse on. Banking, 284.
 
 39, 40. CHECKS. 23 
 
 (if communicated) that the check is good is tantamount to 
 certification,"'"' while the Supreme Court of the United States 
 announces the proposition that such verbal certitication, 
 even when communicated, would not l^ind the bank fur- 
 ther than as to the genuineness of the drawer's signature 
 and the state of his account.^" The casliier has imj)lied au- 
 thority to certify checks, and likewise the board of directors, 
 or any other officer specifically authori/.ed.'* 
 
 § 39. Stale checks. — A eheck is payable iu.stunlly on de- 
 mand; and should be presented within a day when the payee 
 receives it in the place where drawn, and forwarded by the 
 next day, when fonvarding is necessary, in order to pre- 
 serve the payee's recourse against the drawer, in the event 
 of a failure of the bank."" But if the bank remains solvent 
 the holder may retain the check as long as he pleases, and 
 hold the drawer liable until the time for suit is ended by 
 the statute of limitations.^^ But while age cannot invalidate 
 a good check (unless the limitation has applied), and the 
 fact that it was dishonored when transferred, and that pre- 
 sentment was delayed, does not lessen the drawer's lia- 
 bility,'"' unless he has suffered loss;'^ yet the lapse of a long 
 period from its date before its payment, is a circumstance 
 so out of the ordinary course of business that it ought to 
 arouse suspicions and excite inquiry. And the bank pay- 
 ing, or the party receiving such a check, acts at his peril.'^*' 
 
 § 40. Right of holder of uncertified check to sue bank. — 
 
 This is an unsettled question, but the weight of authority 
 
 C9 Bank v. Pettel, 41 111. 492; Carr v. National Secy. Bank, 107 Mass. 
 48. 
 
 70 Espy V. Bank of Cincinnati. IS! Wall. 021. 
 
 71 Merchants' Bank v. State Bank. 10 Wall. 648; Claflin v. Farmers' 
 Bank, 25 N. Y. 29,3; Clarke Xat. Bank v. Bank of Albion, 52 Barb. .592; 
 Conko V. State Xat. Bank. 52 X. Y. 115; Farmers & Mechanics' Bank v. 
 I'.utclicrs, etc., Bank, 14 X. Y. 624; Daniel on Xegotiable Instruments, 
 H ir.09-1611. 
 
 "2 Daniel on Xcjroiiablo Tnstnntioiits, § 1590 et seq. 
 
 73 Tliompson on Bills, 118; Daniel on Xegotiable Instruments, § 1G32. 
 
 74 Cowing V. Altman. 79 X. Y. 168. 
 
 7?"' Daniel on Negotiable Instruments, § 1590. 
 ""•Daniel on Xegotiable Instruments, § 1632.
 
 24r DIFFERENT KINDS OF NEGOTIABLE INSTRUMENTS. § 41. 
 
 in this country and in England supports the view that such 
 suit cannot be maintained. The courts of last resort in 
 South Carohna, Louisiana, Illinois, Missouri, and Kentucky, 
 and possibly other States, in well considered cases adhere 
 to the view that the check holder can maintain such a suit,'^^ 
 while the courts of very many States have taken the con- 
 trary view. The Supreme Court of the United States has, 
 in a number of decisions, adopted the latter, but it has 
 qualified its opinion by remarking: " It may be if it could 
 bo shown that the bank had charged the check on its books 
 against the drawer and settled with him on that basis, that 
 the plaintilf could recover on the count for money had and 
 received, on the ground that the rule ex aequo et bono would 
 be applicable, as the bank having assented to the order, and 
 communicated its assent to the paymaster (the drawer), 
 would be considered as holding the money to the plaintiff's 
 use; and therefore under an implied promise to pay it on 
 demand." "^ And in Pennsylvania the exception thus sug- 
 gested is established.'^^ The general doctrine, as announced 
 by the United States Supreme Court, is supported by the 
 English cases.^^ 
 
 § 41. Damages for improper dishonor of check. — Of course 
 the check holder may sue the drawer of the check on its dis- 
 honor. The depositor may always recover nominal dam- 
 ages from the bank improperly dishonoring his check, and 
 a trader may recover substantial damages. If not a trader, 
 the depositor would have to allege and prove special in- 
 jury.^^ An agent who has put to his private account funds 
 
 77Fogarties v. State Bank, 12 Rich. Law (S. C), 518; Gordon v. 
 ^fulfhor, 34 La. Ann. 008 ; Bank of America v. Indiana Bkg. Co., 
 114 111. 483; Roberts v. Austin, 20 Iowa, 310; Coates v. Doran, 83 Mo. 
 337; Lester v. Given, 8 Bush. 358. 
 
 78 Bank of Republic v. Millard, 10 Wall. 152; First Nat. Bank v. 
 Whitman, 94 U. S. 343. 
 
 79 Seventh Nat. Bank v. Cook, 73 Pa. St. 48.5; Saylor v. Bushong, 
 100 Pa. St. 23. 
 
 SOHopkinson v. Forster, IS Eq. Cas. L. R. 74. For full discussion 
 of the cases pro and rem, see Daniel on Negotiable Instruments, § 1635 
 et serf. 
 
 siRolin V. Stewart, 14 C. B. 007.
 
 §§ 42, 43 BILLS OF CREDIT. 25 
 
 of an undisclosed principal, may recover damages from the 
 bank for refusal to honor his check upon them, although he 
 had improperly obtained them.**" 
 
 SECTIOX VI. 
 
 BILLS OF CREDIT. 
 
 § 42. Tho tenth section of the first article ol the consti- 
 tution of the United States contains certain prohibitions 
 and restrictions upon the power of the States; and the tirst 
 clause of the section reads as follows: ''No State shall 
 enter into any treaty, alliance, or confederation; grant let- 
 ters of marque and reprisal; coin money, emit bills of 
 credit; make anything but gold and silver coin a tender in 
 payment of debts; pass any bill of attainder, ex post facto 
 law, or law impairing the obligation of contracts." But the 
 inhibition contained in that instrument is limited to the 
 States; and although the bill may be designed to circulate 
 as currency, if it be not emitted by a State, it is as free 
 from impeachment, as in violation of the constitution, as 
 any other negotiable paper. A State may therefore grant 
 acts of incorporation authonzing banks or other associations 
 to issue that description of paper to answer the purposes 
 of money, and it may be issued by private persons and part- 
 nerships. This was detennined by the United States Su- 
 preme Court in a case involving an act of tho Tx^gislature 
 of Kentucky, which incorporated the '' Bank of the Com- 
 monwealth of Kentucky," in behalf of the conunonwealth, 
 the president and directors of which were chosen by the 
 I^gislature.^"^ 
 
 § 43. Definition and nature. — A bill of credit is a nego- 
 tiable })aper designed to pass as currency and circulate as 
 money. Such a bill of credit as comes within the constitu- 
 tional prohibition is a negotiable paper issued by the sov- 
 
 s^Tassell v. Cooper. J> C. B. 500: Daniel on Negotiable Instruments, 
 § 1C42. 
 
 83 Briscoe v. Bank of Kentucky, 11 Pet. 433.
 
 I'G DUa-KKJiNT KINDS OF NEGOTIABLE INSTRUMENTS. § 44. 
 
 ereign power of one of tlie United States, and designed to 
 pass as currency and circulate as money. 
 
 The nature of this class of negotiable instruments, and 
 the object and spirit of the constitutional restriction, first 
 received a judicial exposition in the case of Craig v. State 
 of Missouri.^'* In that case it appeared that the State of 
 Missouri, ^^dth a view to relieve the necessities of the times, 
 established loan offices to loan certain sums to citizens, tak- 
 ing security by mortgage redeemable in instalments. 
 
 SECTIOIsT YII. 
 
 QUASI-NEGOTIABLE INSTRUMENTS. 
 
 § 44. The phrase ^wasi-negotiable has been termed an 
 unhappy one; and certainly it is far from satisfactory, as 
 it conveys no accurate, well-defined meaning. But still it de- 
 scribes better than any other short-hand expression the na- 
 ture of those instruments which, while not negotiable in the 
 sense of the law merchant, are so framed and so dealt with, 
 as frequently to convey as good a title to the transferee as 
 if thev were negotiable. 
 
 Very frequently by application of the principles of 
 estoppel, and to effectuate the ends of justice and the in- 
 tention of the parties, the courts decree a better title to 
 the transferee than actually existed in his transferrer; and 
 the result reached in many cases is the same as would be 
 reached if the instrument were negotiable. ^^ 
 
 § 45. Nature of certificates of stock. — A share in the cap- 
 ital stock of a corporation is not a debt, nor money, nor a 
 security for money, but it is a species of incorporeal per- 
 sonal property.^ The capital stock of the corporation is so 
 much money, or property assessed at money valuation, which 
 is divided into a number of shares, which shares are the 
 holder's interest in the corporate estate. The stock of the 
 corporation is generally raised by mutual subscription of 
 
 84 Craig V. State of Missouri, 4 Pot. 411. 
 «5Kailroad Co. v. Howard. 7 Wall. 415. 
 80 Allen V. Pegram, Itj Iowa, 173.
 
 §§ 4G, 47. (iUASl-.N'EGOTlABI.K l^'STltUMEXT^^. 27 
 
 tbo iiiombers in the first instance, and its amount is regu- 
 lated by the statutory provisions by or under which the 
 corporation is chartered. The persons interested in the cor- 
 poration are tenned sharehoklers, or stockh(dders; and cer- 
 tihcates of stock are generally issued to them by the cor- 
 porate authorities of the muniments of their title to a pro- 
 portionate })art (if the i)roiits of the coiporation, and as 
 evidence of their right to participate in its concerns. Unless 
 otherwise provided by statute, the shares in the corporation 
 are generally deemed personal estate.*' 
 
 The certificate of stock is the customary and convenient 
 evidence of the holder's interest in the corporation which 
 issues it, but in the absence of legal provisions requiring it, 
 no certificate of stock is necessary to attest the rights of 
 the shareholder.*® 
 
 § 46. Transfer of certificates of stock. — As between trans- 
 ferrer and transferee of a stock certificate, — It is very well 
 settled that, in the absence of statutory restrictions, the 
 beneficial interest passes by assig-nment, and delivery of 
 the certificate, as in the case of any other species of per- 
 sonal property, or chose in action, no particular formality 
 being necessary to invest the transferee with the right and 
 title of the transferrer, as between the parties to the trans- 
 fer.*^ The equitable title passes as between the immediate 
 parties, whatever may be the rights of others in the prem- 
 ises.^" And, as a general rule, statutory restrictions do not 
 ^affect the immediate parties to the transfer, being designed 
 for otlier inii'poses. 
 
 § 47. As between transferee of certificate and creditor of 
 transferrer. — Tt would seem that any hona fide assignment 
 of the stock for value Avould effectually pass the transfer- 
 s' Huteliins V. state Bank, 12 Mete. (Mass.) 421: Payne v. Eliott, 
 54 Cal. .S.'Jft: Daniel on Xepotiable Tnstruments. § \70>^a. 
 
 88 Chester Glass Co. v. Dewey, 16 iMass. 94: Agricultural Bank v. 
 Burr, 24 Me. 2o(i. 
 
 89 Daniel on Negotiable Instruments, § 17086. 
 
 80 Johnson, v. Underbill, .-.2 N. Y. 203; .Johnston v. Laflin. 103 U. S. 
 804; Gilbert v. Iron Mfg. Co., 11 Wend. 628.
 
 28 DIFFERENT KINDS OF NEGOTlAliLK JXSTKUMENTS. § 48. 
 
 rer's interest therein, so far as to supersede the right of 
 an attachment or execution creditor to levy upon it for a 
 debt due by the transferrer. For whether such assignment 
 vest the legal or equitable interest of the assignor in the 
 assignee, no property right of the assignor remains that is 
 subject to legal process; and the provisions of corporate 
 charters that no transfer of stock shall be valid or effectual 
 until entered or registered upon the books of the coq^ora- 
 tion, are manifestly designed for the security of the cor- 
 poration itself, and of third persons taking transfers of stock 
 without notice of any prior equitable transfer, and are not 
 made with reference to the rights of creditors of a stock- 
 holder.'"*^ This is iii accordance with the general principles 
 applicable to all manner of equitable assignments of per- 
 sonal property. 
 
 § 48. As between the transferee of a certificate of stc3k, 
 and a third party who has purchased the shares, the better 
 opinion is that a hona fide transfer of the certificate carries 
 with it the transferrer's interest in the stock, and that a 
 subsequent purchaser who simply relies on the books of the 
 corporation for information as to who are stockholders, and 
 who buys the shares without taking the certificate, does 
 so at his peril. The certificate is the muniment of title. 
 It is generally dealt with as the representative of the i)ro- 
 portionate interest it assures; and if not in possession of 
 the party oft'cring to sell the shares, a purchaser would be 
 put upon inquiry to ascertain the true condition of things. 
 jVnd on the other hand, a purchaser of the certificate from 
 one whom it testifies to be a shareholder, would have a 
 right to suppose that no one would have bought the shares 
 without taking the customary evidence of title.^^ If the 
 corporation should actually transfer the shares upon its 
 books to a subsequent purchaser without surrender of the 
 certificate, it would act wrongfully and would be bound to 
 
 01 Black V. Zacharie, 3 How. 483 ; Newberry v. Detroit Iron Co., 17 
 Mich. 141 ; Daniel on NejTotiable Instruments, § 1708fi. 
 
 02 People's Bank v. Gridley. 01 111. 457; Sabin v. Bank of Worcester, 
 21 Me. 353; Pinkerton v. Manehcbter R. Co., 42 N. II. 424.
 
 §§ 49, 50. QUASI-NEGOTIABLE INSTRUMENTS. 29 
 
 issue certificates to the prior ])urchaser, ^vho had acquired 
 the stock by transfer of the certificate in diu; course. ''•' 
 
 § 49. Usual methods of transfer of stock. — On tlie back of 
 the certificates there is generally a printed form of sale 
 and assignment, with an irrevocable power of attorney in 
 blank, authorizing the unnamed person to do all things 
 requisite to perfect the transfer on the books of the corpo- 
 ration. When such fornuU assignment, and ])ower oi attor- 
 ney in blank, is signed by the shareholder, and the certificate 
 is delivered therewith, an apparent ownership in the shares 
 represented is created in the holder. And the general prin- 
 ciple sustained by the great weight of authority, as well 
 as of reason, is that when the owner of a certificate of 
 stock with such a power of attorney in blank thereon writ- 
 ten, or thereunto attached, intrusts it to an agent with 
 power to deal therewith, a bona fide purchaser for value 
 without notice will be protected in his acquisition of the 
 certificate, although the agent to whom it has been intrusted 
 has diverted it from the pui-poses for which it was put in 
 his charge, or has been guilty of a fraud or breach of trust 
 in reference thereto. This doctrine does not rest upon 
 the idea that the certificate of stock is a negotiable instni- 
 ment; but upon the equitable ])rinciple that where a person 
 confers upon another all the indicia of ownership of prop- 
 erty, with comprehensive and apparently unlimited powers 
 in reference thereto, he is estopped to assert title as against 
 a third person, who, acting in good faith, acquires it for 
 value from the apparent o^^^ler.®■' 
 
 § 50. Bills of lading-, their nature. — A bill of hiding may 
 be defined to be a written acknowledcnient by the master 
 of a ship, or the reiDresentative of any common carrier, 
 that he has received the goods therein cfescribed for the 
 voyage or jouruey stated, to be carried upon the terms and 
 delivered to the persons therein specified. It is at once a 
 
 93 Cushman v. Thavor 'S\fff. Co., 70 X. V. 'ICT : Daniel on Negotiable 
 InstnimoTits. § 1708/'. 
 
 J*-t Johnston V. Laflin. 103 U. S. SOO. and cases cited in note to Daniel 
 on Negotiable Instruments, § MOSg.
 
 30 DIFFERE.XT lvl>'DS OF XKUOTIABLE IXSTKUMKXTS. § 51. 
 
 receipt for the goods which renders the carrier responsible 
 as their custodian, and an express written contract for their 
 transportation and delivery. And to facilitate commercial 
 transactions, it has grown to be regarded as the symbolical 
 representative of the goods which it describes; and its trans- 
 fer carries with it such rights as the party in possession of 
 the goods could transmit by actual corporeal transfer of 
 the goods themselves.^'' 
 
 § 51. Analogous to negotiable instruments. — The idea that 
 bills of lading are negotiable arose from the use to which 
 they were appropriated in the transfer of goods purchased, 
 before they were delivered to the purchaser, or before they 
 were paid for; but it \vi\\ be seen that their peculiar prop- 
 erties are attributable rather to a liberal application of the 
 doctrine of equitable estoppel for the benefit of trade, than 
 to any custom or statute which placed them upon the foot- 
 ing of negotiable instruments,"'' for both of these sources 
 of negotiability are wanting. The consignor of goods 
 shipped takes from the master of the ship a bill of lading, 
 and sending it to the consignee who has ordered the goods, 
 draws upon him by bill of exchange for the purchase money. 
 Before the goods reach their destination the consignor, who 
 in the case instanced is the vendor of the goods, learns that 
 the vendee is insolvent; and to prevent the injustice which 
 would be done, if, in consequence of the vendee's insolvency, 
 and while the price is yet unpaid, they were to be seized 
 upon in satisfaction of his liabilities, the law confers upon 
 the vendor the right to stop the goods in transitu, and to 
 retain them until the whole purchase money is paid.^^ 
 
 But suppose the consignee has received the bill of lading 
 of the goods, deliverable to him or his assigns, or indorsed 
 to liim or his assigns, by the consignor, and has assigned 
 the bill by indorsement to a hona fide third party, then the 
 vendor's right to stop the goods in transitu and hold them 
 as security for the purchase money is defeated, and the as- 
 
 95 Daniel on Negotiable Instruments, § 1728. 
 o«Sepurity Bank v. Lnttpen. 29 Minn. 306. 
 OTOib^on V. C'arruthers. S M. & W. 3.36.
 
 § 52. QUASl-NEGOTIAI'.I.K I NSTKUMENTS. 31 
 
 signco (if tli«' Itill ;i<'i|uii-os as i)ei'fec't a title to the p>ods, 
 althoii<5li they have not reached tlie buyer's hands, as if 
 they had actually passed through his hands and been d(div- 
 ered hodily to liiiii. This was decided in the leading case 
 of Lickbarn»\v v. .Mason/"* and may now be regarded as the 
 settled law <>f England and 'of the United States.''" But 
 this capacity of the bill of lading for transferring the right 
 of property, under these circumstances, does not inijily that 
 it is a negotiable instrument to all intents and purposes. 
 The assignee of the bill of lading is protected because the 
 vendor of the goods has placed in the hands of his assignor 
 a muniment of title, clothing him with apparent ownership 
 of the goods, and it is inequitable that a secret trust should 
 bo enforced in favor of the vendor, who has issued such 
 muniment of title against a person who has taken an as- 
 sionment of it for valuable consideration, and without no- 
 tice of such circumstances as render it not fairly and hon- 
 estly assignable.^ 
 
 § 52. Transfer of bill of lading. — Thus the bill of lading 
 passes the property, when it is indorsed and intended so to 
 operate, in the same manner as a direct deliver)'- of the goods 
 would do if so intended, and it operates no further. It con- 
 stitutes a symbolic and constructive delivery of the goods,^ 
 being the proper substitute for the actual delivery of goods 
 at the time at sea en route to the consignee, and the arrival 
 and delivery of which the consignor has placed it in his 
 ]iower by the bill of lading to anticii)ate.^ 
 
 Delivery of the bill without indorsement, has been held 
 sufHcient to pass the title where the person to whom it was 
 
 'J« 1 Smith's Lead. Cas. 895. 
 
 »9Ne\vhall v. Central \\ R. Co., 51 Cal. 345; Daniel on Xeprotiable 
 Instruments, § 1729. 
 
 1 Sliaw V. Railroad Co., 101 U. S. 5(14; Brewster v. Sime. 42 Cal. 130. 
 
 2 Meclianics", etc., Bank v. Farmers', etc.. Bank. GO X. Y. 47: Forbes 
 V. Boston & Lowell R. Co., 133 Mass. 154; Daniel on Negotiable Instru- 
 ments, § 1731. 
 
 •t Pratt V. Parkman, 24 Pick. 42.
 
 02 DIFFERENT KINDS OF NEGOTIABLE INSTRUMENTS. § 53. 
 
 delivered, was recognized upon the face of the bill, as the 
 person entitled to the nltiniate possession of the goods.^ 
 
 § 53. Warehouse, or dock, receipts. — This species of con- 
 tracts is, independent of statute law, of modem invention, 
 and does not rest like bills of lading upon ancient mercantile 
 custom imparting to them a •^'wasZ-negotiability. "These 
 documents," says Blackburn, J., " are generally written 
 contracts, bv which the holder of the indorsed document 
 is rendered the person to whom the holder of the goods is 
 to deliver them, and in so far they greatly resemble bills 
 of lading; but they differ from them in this respect, that 
 when goods are at sea, the purchaser who takes the bill of 
 lading has done all that is possible in order to take posses- 
 sion of the goods, as there is a physical obstacle to his seek- 
 ing out the master of the ship, and requiring him to attorn 
 to his rights; but when the goods are on land, there is no 
 reason why the person Avho receives a delivery order, or 
 dock warrant, should not at once lodge it with the bailee, 
 and so take actual or constructive possession of the goods. 
 There is, therefore, a very sufficient reason why the cus- 
 tom of merchants should make the transfer of the bill of lad- 
 ing equivalent to an actual delivery of possession, and yet 
 not give such an effect to the transfer of documents of title 
 to goods on shore. ^ 
 
 § 54. Their nature. — Warehouse receipts, pure and sim- 
 ple, with only the incidents annexed to them by law, and 
 none superadded by special contract, conduct, or representa- 
 tion, are no more obligatory in the hands of bona fide hold- 
 ers for value, than in the hands of the bailor of the prop- 
 erty stored; but, if warehouse receipts of a special form 
 and character be adopted and issued in due course of busi- 
 ness, for the express purpose of being pledged as security 
 to obtain money, and if, as a part of the regular system of 
 using them the warehouseman acknowledge in writing on 
 each receipt notice of assignment by the pledgor to the 
 
 4Campbf!ll V. Alford, 57 Tex. 101. 
 
 5 Blafkhurn on Sales, 297: Benjamin on Sales, 613; Fairina v. Home, 
 16 M. & W. 119.
 
 § 55. QUASI-NEGOTIABLE INSTHUMEMTS. 33 
 
 pledgee before the latter advances Lis money thereon, the 
 pledgee after advancing his money in good faith, is entitled 
 to stand on the terms of the pledged receipt. Thus, though 
 in fact no goods had been received for storage, the recital 
 in the special receipt being utterly false, nevertheless the 
 recital will have the same effect in protecting such hoiia fide 
 pledgee, as if the goods had been received and stored." ^ 
 
 § 55. Statutory changes. — There are statutory enactments 
 in England wliicli greatly enlarge the effect of such instni- 
 ments.' In Virginia, by act of Assembly, warehouse re- 
 ceipts (for produce) are made negotiable under certain 
 rules and regulations,** and in Minnesota they are negotiable 
 by indorsement and delivery.^ And so in Ohio, and per- 
 haps in other States.^" 
 
 i; Planters' Rice Mill Co. v. Merchants' Nat. Bank, 78 Ga. 582. 
 
 7 Benjamin on Sales, C07. 
 
 8 Acts of Assembly of 1874, p. 233. 
 
 9 State V. Loomis, 27 Minn. 521; National Exeh. Bank v. Wilder, 34 
 Minn. 149; Brooks v. Hanover Nat. Bank. 20 Fed. 301. 
 
 10 Cleveland v. Sherman, 40 Ohio St. 17G; Conrad v. Fisher, 37 Mo. 
 App. 367. 
 
 3
 
 CHAPTER HI. 
 
 FORMAL REQUISITES OF NEGOTIABLE INSTRUHENTS. 
 
 SECTION I. 
 
 DIFFERENCE IN STRUCTURE BETWEEN BILLS OF EXCHANGE AND- 
 
 PROMISSORY NOTES. 
 
 §56. Difference between bills and notes. — In their orig- 
 inal Structure, a bill of exchange and a promissory note do 
 not strongly resemble each other. In a bill, there are three 
 original parties: drawer, drawee, and payee; in a note only 
 two: maker and payee. In a bill, the acceptor is the pri- 
 mary debtor. In a note, the maker is the only debtor. But 
 if the note be transferred to a third party by the payee, it 
 becomes strikingly similar to a bill. The indorser becomes 
 then, as it were, the drawer, the maker the acceptor, and 
 the indorsee the payee. 
 
 SECTION 11. 
 
 FORMALITY IN RESPECT TO STYLE AND MATERIAL. 
 
 § 57. The law does not require any particular form, either 
 as to a bill of exchange or promissory note, or other nego- 
 tiable instrument, and while it would be unwise to depart 
 from the approved forms in vogue amongst merchants, yet 
 the law respects substance more than form; and where the 
 intention appears to assume the obligations which de- 
 volve upon drawers and makers of negotiable instruments, 
 it will be enforced, although not evidenced in the usual 
 commercial form. Thus, an order written under a note, 
 " Please pay the above note, and hold it against me in our 
 settlement," signed by the drawer and accepted by the 
 drawee, has been held a good bill;^ and so, also, it has 
 been held that a like order written under an account is a 
 
 1 Leonard v. Mason, 1 Wend. 252. 
 [34]
 
 § 58. FOKMAI.ri ^ l.\ KESPECT TO STYLE AND MATEUIAL. 35 
 
 bill of exchange.- And where an indorsement ^vas made 
 on a bond, ordering- the contents to be paid to order for 
 value received, it was held a good Ijill."' 
 
 § 58. Signature and material. — It does not matter upon 
 wliat portion of the instrument, the maker or drawer af- 
 fixes his name, so that he signs as drawer or maker.'* It is 
 not material whether the writing is in pencil or ink,^ al- 
 though as matter of permanence and security, ink is, of 
 course, preferable. And the name may be printed as well 
 as written, though, in such cases, it cannot prove itself, and 
 must be shown to have been adopted and used by the party 
 as his signature." If another sign the name of the party 
 in his presence and at his request, it is the same as if he 
 did it himself;'^ and if another sign the party's name by ver- 
 bal or other authority, it is sufficient.^ The full name may 
 be w^ritten; and at least the surname should appear, and 
 generally does. But tliis is not indispensable — the initials 
 are sufficient, ° and any mark which the party uses to indi- 
 cate liis intention to bind himself will be as effectual as his 
 signature, ^'^ whether there be a certificate of -fatnesses on 
 the instrument or not.^^ But, of course, a mark does not 
 prove itself like a signature, although it is an adminicle of 
 proof.^^ ^^ny peculiarity in it may be sho\\Ti as exidence of 
 its genuineness i^'^ but, unless there be an attesting witness, 
 or one who saw it written, or is familiar with its character- 
 
 2Hoyt V. Lynch. 2 Sandf. 328. 
 •'! Bay V. Frazer. 1 Bay, 60. 
 
 •1 Clason V. Bailey, 14 Johns. 484; Schmidt v. Schmaeller, 45 Mo. 502. 
 5 Reed v. Roark, 14 Tex. .'{20: Clossoti v. Stearns, 4 Vt. 11. 
 •'Brown v. Butchers' Bank, 6 Hill, 443; Schneider v. Norris, 2 Maul© 
 & S. 286. 
 
 7 Saper v. Tupper, 42 Mich. 605. 
 
 8 Daniel on Nefrotiable Instruments, §§ 274, 299. 
 
 9 Merchants' Bank v. Spicer, Wend. 443; 1 Parsons on Notes and 
 Bills, 36. 
 
 10 Lyons v. Holmes, 11 S. C. 429. 
 
 n VVillouphby v. Moulton, 47 X. H. 205; ShaTik v. Butsch, 28 Ind. 19. 
 i2Hilborn v. Alford, 22 Cal. 482; Flowers v. Billing?, 45 Ala. 488. 
 13 George v. Surrey, 1 Moody & M. 516; 2 Parsons on Notes and Bills, 
 480.
 
 36 FOEMAL REQUISITES OF INSTRUMENTS. §§ 59, 60. 
 
 istics, the plaintiff cannot recover.^* Nor is it necessary 
 that the substance upon which the instrument is written 
 shoukl be paper — •parchment, cloth, leather or any other 
 substitute for paper will suffice. ^^ 
 
 § 59. Whole instrument must be in writing. — The whole 
 of the bill or note must be expressed in writing. But all 
 of it need not be in the body of the instrument;^'' and a 
 contemporaneous memorandum or indorsement on any 
 part of it may qualify its terms by making it payable upon 
 a contingency," or at a particular place,^^ or providing that 
 it may be renewed. ^^ And there may be a written stipu- 
 lation on a detached paper affecting the instrument, which 
 would be admissible as between the original parties and 
 their representatives;^" but such stipulation would not af- 
 fect a bona fide holder for value, who acquired it without 
 notice.^^ But a party having notice would stand on no bet- 
 ter footing than the original parties.^^ Whether the in- 
 strument be a bill of exchange or a promissory note, or 
 othermse, and whether or not it be negotiable, must be de- 
 termined by its face, without reference to any other source.^^ 
 
 § 60. Parol evidence — It is a general principle of law that 
 parol evidence is inadmissible to vary or contradict a writ- 
 ten contract. Therefore, if a negotiable contract be ab- 
 solute and complete upon its face, no evidence of a verbal 
 agreement made at the time, qualifying its terms, can be 
 admitted.^ This principle applies to every element of the 
 
 14 Thompson on Bills, 30, 31, 33. 
 
 15 Daniel on Negotiable Instruments, '§ 77. 
 
 IG Daniel on Negotiable Instruments, § 79 ; Goldman v. Blum, .58 
 Tex. 636. 
 
 17 Hughes V. Fisher, 10 Colo. 385; Wheelock v. Freeman, 13 Pick. 168. 
 IS Hughes V. Fisher, 10 Colo. 385; Wheelock v. Freeman, 13 Pick. 168. 
 le Hartley v. Wilkinson, 4 Maule & S. 25. 
 
 20 Bowerbank v. Monteiro, 4 Taunt. 844. 
 
 21 Hoare v. Graham, 3 Campb. 57. 
 
 22 Gibbon v. Scott, 2 Stark. 286. 
 2.3Strachan v. Muxton, 24 Wis. 21. 
 
 24Burne3 v. Scott, 117 U. S. 582; Whitwell v. Winslow, 133 Mass. 
 343.
 
 § 61. FORMALITY IN ICKSl'ECT TO STYLE AND MATEUIAL. '.U 
 
 instrument, and it follows that no condition can be engrafted 
 in the instrument by verbal testimony — as that it should 
 be void unless others interested agreed to the settlement in 
 which it was given ;'^ or was to be void if certain bills 
 should bo paid at maturity;"*' or was to be void or surren- 
 dered up in the event the case in which it was given for 
 a fee was compromised,^ or in any other contingency.^ 
 Nor can it be shown that it was only to be paid out of a 
 particular fund or estate.^ The Supreme Court of tho 
 United States, in the case of Bro\\Ti v. Spofford, thus com- 
 prehensively and tersely states the law: '' Negotiable notes 
 are written instruments, and as such they cannot be con- 
 tradicted, nor can their terms be varied by parol evidence; 
 and that proposition is universally true where the promis- 
 sory note is in the hands of an innocent holder." ^'^ 
 
 § 61. Contemporaneous written agreements. — But contem- 
 poraneous written agreements are admissible for the pur- 
 pose of controlling the effect of a negotiable instiiiment, as 
 between immediate parties and those having notice ;^^ and 
 a purchaser after maturity, of a negotiable instnmient, 
 would be bound by such agreement, when established.^^ 
 Parol evidence is generally admissible, as between the par- 
 ties, to show their real relations to each other ;^^ and if there 
 be a latent ambiguity, to explain it.^^ And if by mistake 
 the instrument were given for too large an amount, the bet- 
 ter opinion is that it may be shown, for as to the mistaken 
 
 25 Ely V. Kilborn, 5 Den. 514. 
 20 Penny v. Graves, 12 111. 187. 
 
 27 Dale V. Tope, 4 Litt. 166. 
 
 28 Potter V. Earnest, 45 Ind. 418; Wayland Univ. v. Boorman, 56 Wis, 
 660. 
 
 29 Brown v. Spofford, 05 U. S. 482; Adams v. Wilson. 12 Mete. 
 (Mass.) 138. 
 
 30 Brown v. Spofford, 95 U. S. 482. 
 
 31 Goodwin v. Nickerson, 51 Cal. 166; Lebanon Sav. Bank v. Penney, 
 46 N. W. 331. 
 
 32Munro v. Kinp. 3 Colo. 238. 
 33Houc'k v. Graham, 106 Ind. 195. 
 34 Wharton on Evidence, § 956.
 
 3S FORMAL REQUISITES OF INSTRUMENTS. §§ 62, G3. 
 
 excess there is partial want of consideration.^'^ And, in 
 general, parol evidence is admissible between the original 
 parties to show fraud, accident, or mistake in the creation 
 of the instrument. ^*^ Also to set up a verbal agreement by 
 performance of whicli the written contract has been dis- 
 charged."''' 
 
 § 62. The date The date is usually written in the right- 
 hand corner of the instrument; but a date is not essential 
 to the validity of the instrument ;^^ and it is of no conse- 
 (picnce on what portion of the paper it is written.^'' If 
 there be no date, it will be considered as dated at the time 
 it was made,^ and parol evidence is admissible to show from 
 what time an undated instrument was intended to operate,^^ 
 or to show that there was a mistake in the date.^ If dated, 
 it A\-ill be presumed to have been executed on the day it 
 bears date.'*" If undated, but containing a reference to 
 date, it will date from delivery.'*^ When a note without 
 date is made for another's accommodation, the maker au- 
 thorizes him to fill up the date as he sees fit.^'^ 
 
 § 63. Words of negotiability. — No precise form of words 
 is necessary to impart negotiability. As has been said in 
 Pennsylvania,^^ " ' order ' or ' bearer ' are convenient and ex- 
 
 snCJaxon V. Demaree, 14 Bush, 173; Daniel on Negotiable Instru- 
 ments, §§ 816, 179, 201. But see Downs v. Webster, Brayt. 79; 3 
 Parsons on Notes and Bills, 505. 
 
 36 Phillips V. Meily, 106 Pa. St. 53G. 
 
 37 Howard v. Stratton, 64 Cal. 487. 
 
 3s:Michigan Ins. Co. v. Leavenworth, 30 Vt. 11; Drake v. Rogers, 32 
 Me. 524. 
 
 39 Shepherd v. Graves, 14 How. 505. 
 
 40 Cowing V. Altman, 71 N. Y. 441; First Nat. Bank v. Hunt, 25 Mo. 
 App. 174. 
 
 41 Richardson v. Ellet, 10 Tex. 190; Lean v. Lozardi, 27 Mich. 424. 
 
 42 Biggs V. Piper, 86 Tenn. 589; Paige v. Carter, 64 Cal. 489. 
 
 43 Kinsely v. Sampson, 100 111. 574. 
 
 44Armitt v. Breame, 2 Ld. Raym. 1076; Styles v. Wardle, 4 B. & C. 
 908. 
 
 45 Androscoggin Bank v. Kimball, 10 Cush. 373; Shultz v. Payne, 7 
 La. Ann. 222. 
 
 46 Daniel on Negotiable Instruments, § 106; RajTiiond v. Middleton, 
 29 Pa. St. 530.
 
 §§ G4, G5. SETS IN KOREIGN blLLb. 31) 
 
 pressive, but clearly not the only words wlnck will commu- 
 nicate the quality of negotiability. Some equivalent words 
 may be used. Words in a bill, from which it can 1)0 in- 
 ferred that the person making it, or any other party to it, 
 intended it to be negotiable, will give it a transferable qual- 
 ity against that person. It may be stated, therefore, that 
 if the maker of a note, having omitted the usual words 
 of negotiability, had said, ' this is and shall be negotiable,' 
 it would have been negotiable." 
 
 SECTIOX III. 
 
 THE SEVERAL PARTS OF A FOREIGN BILL CALLED A SET. 
 
 § 64. In order to avoid delay and inconvenience which 
 may result from the loss or miscarriage of a foreign bill, 
 and to facilitate and expedite its transmission for accept- 
 ance or payment, the custom has prevailed from an early 
 period for the drawer to draw^ and deliver to the payee sev- 
 eral parts of the same bill of exchange, which may be for- 
 warded by different conveyances, and any one of them being 
 paid, the others are to be void. These several parts are 
 called a set, and constitute in law one and the same bill.^^ 
 Sometimes there are four, but usually three parts.^^ And 
 if any person undertakes to draw or deliver a foreign bill 
 to another person, it seems that he is bound to deliver the 
 usual number of parts,^^ and it has been thought that the 
 promisee may, in such a case, demand as many parts as 
 he pleases,^^ but this is questionable.^^ 
 
 § 65. Condition in each part of set. — It is usual for the 
 drawer, and to his protection it is essential, to incorporate 
 in each part of the set a condition that it shall only be 
 payable provided the other remains unpaid. This operates 
 
 47 Daniel on Negotiable Instruments, § 113; Story on Bills. § 66. 
 
 48 Daniel on Negotiable Instruments, § 113; Story on Bills, § 66. 
 •»n Keai-ney v. West Granada :\Iininf!: Co.. 1 H. & N. 412. 
 iiOChitty on Bills [*154], 178: Bylcs on Bills [*376], 5.56. 
 
 51 Daniel on Negotiable Instruments, § 113: Storv on Bills. § 66.
 
 40 FOKMAL REQUISITES OF INSTKUMENTS. §§ GG, 07. 
 
 as notice to the world that all the parts constitute one bill, 
 and if drawee pay any part, thenvhole is extinguished.^- 
 
 § 66. Only one part of set should be accepted. — The 
 drawee should accept but one part of the set. And hav- 
 ing accepted one part, he should not pay another part, for 
 he would still be liable on the accepted part.'^^ When, how- 
 ever, he pays the part he accepts, the whole bill is extin- 
 guished.^"* The party entitled to the bill should claim and 
 hold all the parts, for the payment of any one part to an- 
 other person might defeat him.^^ But he to whom any one 
 part of the set is first transferred acquires a property in 
 all the other parts, and may maintain trover even against 
 a bona fide holder, who subsequently, by transfer or other- 
 wise, gets possession of another part of the set.'"" For it 
 is the duty of the person taking one part to inquire after 
 the others; and he is advertised by their absence that they, 
 or one of them, may be outstanding in the hands of a 
 prior bona fide liolder.^^ There is some contrariety of opin- 
 ion as to w^hether the plaintiff, in a suit against drawer or 
 indorser, must produce all of the set or satisfactorily ac- 
 count for their nonproduction, but the Supreme Court of 
 the United States has held that it is sufiicient if the part 
 protested is produced.^^ 
 
 SECTION IV. 
 
 STAMPS UPON NEGOTIABLE INSTRUMENTS. 
 
 § 67. It seems that stamp duties were first levied on the 
 continent of Europe, in Holland, in the year 1624, being 
 employed to raise revenues for the prosecution of war 
 
 52 Daniel on Negotiable Instruments, § 114; Ingraham v. Gibbs, 2 
 Dall. 134. 
 
 !53 Holdsworth v. Hunter, 10 B. & C. 449; Chitty on Bills [*1.55], ITS. 
 
 54 Holdsworth v. Hunter, 10 B. & C. 449; Chitty on Bills [*15.5], 178. 
 
 55 Holdsworth v. Hunter, 10 B. & C. 449. 
 
 56 Holdsworth v. Hunter, 10 B. & C. 449; Byles on Bills [*376], 556. 
 
 57 Lang V. Smyth, 7 Bing. 284, 294; 5 M. & P. 7J. 
 58Downes v. Church, 13 Pet. 205.
 
 § 68. STAMPS UPOX XEGOTIABLK INHTKUMENTS. 41 
 
 against Spain. ^" In England, they were first imposed in 
 1G94, war then hcing waged against France.*^" In the United 
 States, individual States have at different periods imposed 
 stamp duties; but such duties were never imposed Ly the 
 Federal Govermnent until July 1, 1862, during the progress 
 of the war against the Confederate States. At that time, a 
 sweeping act, requiring deeds, bills, notes, checks, and other 
 agreements and evidences of debt to be stamped, was passed, 
 being framed for the most part upon the model of the Brit- 
 ish statutes. Subsequently the entire act was repealed, 
 and from the date of the said repeal there was no statute 
 of the United States requiring a stamp upon negotiable 
 instruments until the act of Congress of June 13, 1898. 
 
 § 68. Stamp Act of 1898. — Upon the declaration of war 
 with Spain, and in order to raise the increased revenue 
 needed to meet the exigencies of that period, the Congress 
 of the United States enacted what is known as the " War 
 Revenue Act," which provided, among other things, for the 
 stamp upon bills of exchange, foreign and inland, promis- 
 sory notes, money orders, certificates of deposit, warehouse 
 receipts, bills of lading, and quite a number of evidences 
 of indebtedness not herein eumnerated. Bills of ex- 
 change if drawn singly were taxed four cents for each 
 $100, and if dra^m in two sets, two cents for each 
 $100. Upon promissory notes, the same stamp duty (in 
 the graduated scale) as in case of bills of exchange was 
 imposed, while upon checks a two-cent stamp was re- 
 quired, without regard to the amount specified therein. 
 Congress, by the enactment known as the " Revenue Re- 
 duction Law," approved March 2, 1901, repealed so 
 much of the act of 1898 as required stamp taxes upon 
 checks, certificates of deposit, promissory notes, money or- 
 ders, bills of lading and warehouse receipts, leaving bills 
 of exchange subject to and governed by the provisions of 
 the act of 1898; and by a still more recent statute, ap- 
 proved April 12, 1902, the stamp tax on bills of exchange 
 was abolished. 
 
 f'i' Edwards on Stamp Act. 2. oo Edwards on Stamp Act. 2.
 
 i2 FORMAL KKQUl«lTEsi OF IXSTKUME2^^TS. §§ 6'J, 70. 
 
 SECTION V. 
 
 DELIVERY. 
 
 § 69. Delivery is the iiual step necessary to perfect the 
 existence of any written contract; and, therefore, as long 
 as a bill or note remains in the hands of the drawer or 
 maker, it is a nullity.^^ 
 
 So essential is delivery that it has been held that where 
 a promissory note, the existence of which was unknown to 
 the grantee, hiy in the grantor's possession, and was found 
 amongst his papers after death, the payee could not claim 
 or sue upon it;*''^ and though such a note should be found, 
 accompanied ^rith written directions to deliver it to the 
 payee, the payee ^rill still have no right of action, unless 
 the directions be valid as a testament.^^ 
 
 Delivery may be constructive as well as actual. 
 
 A direction to a third person, who is in actual custody 
 of the instrument, to hold it subject to the payee's or trans- 
 feree's order, or an order to the depositary to deliver it, 
 or a delivery to a third person for the payee without con- 
 dition is sufficient in legal contemplation. In either of the 
 cases suggested the deliverv^ would be constructive. '^ 
 
 § 70. PresTimption of delivery. — ^Vhcnever a bill or note 
 is found in the hands of the payee, it will be presumed that 
 it was delivered to him,*^^ and that the delivery took place 
 on the day of its date, if it be dated,^'' and, at any rate, be- 
 fore the day of its maturity.*^' But the presumption both 
 as to the fact and the time of delivery may be rebutted.*^ 
 As a Ijill or note takes effect only by delivery, so it takes 
 
 ei Devries v. Shumate, 53 Md. 21G; Purviance v. Jones, 120 Ind. 164. 
 
 f.2Disher v. Disher, 1 P. Wms. 204. 
 
 eoGough V. Findon, 7 Exch. 48. 
 
 C4 Gordon v. Adams, 127 111. 225; Howe v. Quid. 28 Gratt. 7. 
 
 csGriswold v. Davis, 31 Vt. 390. 
 
 06 Cranston v. Goss, 107 Mass. 439; Emery v. Vinall, 26 Me. 295. 
 
 C7 Smith V. McClure, 5 East, 477; Dinney v. Plumley, 5 Vt. 500. 
 
 68 Woodford v. Dorwin, 3 Vt. 82; Scaife v. Byrd, 39 Ark. 568.
 
 ^71. DELIVERY. 43 
 
 elfect only on delivery; and if this be subsequent to its date, 
 it will be binding only from the day of actual delivei7.'''*' 
 
 If the bill or note bear no date, the time must be com- 
 puted from its delivery; and if the day of actual delivery 
 cannot be proved, it mil be computed from the earliest day 
 on which it appears to have been in the hands of the payee 
 or any holder.'*^ 
 
 §71. Intention essential. — It is essential to delivery that 
 the minds of both parties should assent, in order to bind 
 them; and if, through inattention, intirmity, or othen\'ise, 
 one does not assent, the act of the other is nugatory."^^ 
 Therefore, leaving a check on the desk of a clerk of a 
 bank, and without the knowledge of such clerk or of an offi- 
 cer of the bank, does not constitute delivery.'^- Where pa- 
 pers were taken up in the presence of the party sought to 
 be charged, and placed in the safe of a third person, it was 
 held no delivery on his part, as between the immediate par- 
 ties, when he had done or said nothing to indicate an in- 
 tention to deliver.'^ A bill or note, as well as a deed, 
 may be delivered in escrow — that is, delivered to a third 
 party to hold until a certain event happens or certain con- 
 ditions are complied with — and then the liability commences 
 as soon as the event happens or the condition is fulfilled, 
 withont actual delivery of the instrument. '^^ But there is 
 this distinction between negotiable and sealed instruments: 
 If the custodian of the former betrays his trust, and passes 
 off the negotiable instrument to a hona fide holder before 
 maturity, and without notice, all parties are boimd; but if 
 the instrument be sealed, the rule is other\rise.'^'' 
 
 •iOLovejoy v. Whipple, 18 Vt. 370. 
 
 70 Clark v. Sigourney, 17 Conn. 511; Richardson v. Lincoln, 5 Mete. 
 (Mass.) 201. 
 
 "1 Daniel on Xegotiable Tnsfruments, § 67. 
 
 T2Chicopeo Bank v. Philadelphia Bank, 8 Wall. G41 : Kinney v. Ford, 
 52 Barb. 194. 
 
 T3 Stokes V. Anderson, 118 Ind. .5.3.3. 
 
 74 Daniel on Xegotiable In.struments. § G8 ; Taylor v. Thomas. 13 
 Kan. 217. 
 
 '•> Daniel on Xegotiable Instruments. § 68.
 
 CHAPTER lY. 
 
 THE ESSENTIAL REQUISITES OF NEGOTIABLE INSTRU- 
 
 riENTS. 
 
 § 72. A negotiable instrument must carry its full history 
 upon its face and embrace the following requisites: First. 
 It mus& be open, that is, unsealed. Second. The engage- 
 ment to pay must be certain. Third. The fact of pay- 
 ment must be certain. Fourth. The amount to be paid must 
 be certain. Fifth. The medium of payment must be money. ^ 
 
 SECTION I. 
 
 THE PAPER MUST BE OPEN THAT IS UNSEALED. 
 
 § 73. What is an unsealed obligation; effect of seal on ne- 
 gotiability. — By the term *' open " is meant "unsealed;" 
 and though the instrument possesses all the other requisites 
 of a bill or note, its character as a commercial instrument is 
 destroyed, and it becomes a covenant, governed by the rules 
 affecting common-law securities, if it be sealed.^ It is to 
 be observed, however, that merely attaching a seal to 
 the signature does not make it a specialty contract, unless 
 there be a recognition of the seal in the body of the in- 
 strument by some such phrase as " witness my signature 
 and seal," or " signed and sealed," for otherwise the door 
 would be thrown open to frauds and forgeries^ by the facil- 
 ity witli which seals could be superadded.^ And it seems 
 to be established l)y well considered cases that corporations 
 cannot use the seal without destroying the negotiable char- 
 acter of the instrument, although the decisions are not 
 uniform.* 
 
 1 Daniel on Xepotiable Instruments, § 30. 
 
 2 Daniel on Xepotiable Instruments, § .31; Story on Bills, § 62. 
 •"'Anderson v. Bullock, 4 :\Iunf. 442; Humphries v. Nix, 77 Ga. 98. 
 
 4 Daniel on Negotiable Instruments, § 32. See also § 146, post, and 
 authorities there cited. 
 
 [441
 
 §§ 74, 75. CERTAINTY AS TO ENGAGEMENT TO PAY. 45 
 
 § 74. Statutes as to sealed instruments. — In some of the 
 States of the United States, sealed instruments for the pay- 
 ment of money are placed by statute upon the same footing 
 as bills and notes in respect to their negotiability; and the 
 addition of a seal to a bill or note payable to order or bearer 
 in no way impairs its negotiability. 
 
 In others, bonds are made transferable, and may be sued 
 upon in the name of the assignee, but the latter takes them 
 subject to all defenses that were available to the original 
 
 obligee.^ 
 
 SECTION II. 
 
 CERTAINTY' AS TO ENGAGEMENT TO PAY. 
 
 § 75. Meaning of the requirement. — If a bill, it must con- 
 tain a certain direction to pay — if a note, a certain promise 
 to pay. A bill is, in its nature, the. demanding of a right, 
 not the mere asking of a favor, and therefore a supplica- 
 tion made or authority given to pay an amount is not a 
 bill. The language, " Mr. Little, please let the bearer have 
 £7, and place it to my account, and you ^^^ll much oblige 
 your humble servant," was held not a bill;*^ and so " Please 
 to send £10 by bearer, as I am so ill I cannot wait upon 
 vou:"'^ but on the other hand where the language was: 
 '^ Mr. Nelson ^^^ll much oblige Mr. AVebb by paying I. Ruff, 
 or order, on his account, twenty guineas," it was held to im- 
 port an order, and therefore a good bill.^ The usual and 
 appropriate expression used in bills is, " Please pay," and 
 it has been well said by Justice Stoiy that the language 
 should not be too nicely scanned nor be regarded because 
 of its politeness as asking a favor rather than demanding 
 a right.^ It is a perfectly valid phrase, being a mere form 
 of civility.^** "Please let the bearer have $50; I ^dll ar- 
 
 c Daniel on Negotiable Instruments, § 33. 
 C Little V. Slackford, 1 Moody & M. 371. 
 
 7 King V. Ellor, 1 Leach Cr. Law, 323. 
 
 8 Ruff V. Webb. 1 Esp. 129. 
 
 9 Story on Bills, § 33. 
 
 loWheatley v. Strobe, 12 Cal. 92; Jarvis v. Wilson, 46 Conn. 90.
 
 46 EssE^"nAL requisites of instruments. § 76, 
 
 range it with you this forenoon," and signed, " yours, most 
 obedient," was hekl sulhcient in Kentucky. ^^ 
 
 § 76. Certainty of promise in a note. — A promissory note 
 must contain a certain promise to pay. ' " I promise to pay, 
 or cause to be paid," would suffice, because the undertaking 
 that the payment be made is definite and certain.^^ It is 
 said by Story, that " it seems that to constitute a, good prom- 
 issory note, there must be an express promise upon the face 
 of the instrument to pay the money; for a mere promise 
 impKed by law, founded upon an acknowledged indebted- 
 ness, -wall not be sufficient." ^^ But we think the better lan- 
 guage is used by Byles, who says: "No precise words of 
 contract are necessary, provided they amount, in legal effect, 
 to a promise to pay." ^^ In other words, if over and above 
 the mere" acknowledgment of debt, there may be collected 
 from the words used a promise to pay it, the instrument 
 may be regarded as a promissory note.^^ 
 
 In England, it seems to be well settled that an ordinary 
 due-bill does not amount to a promissory note, while in the 
 United States the decisions are conflicting.-'^ When nego- 
 tiable words, however, are inserted in the due-bill, or it 
 contains the words " on demand," the instrument is gener- 
 ally held to be a promissory note.-^ 
 
 SECTION III. 
 
 CERTAINTY AS TO FACT OF PAYMENT. 
 
 § 77. Fact of payment must be certain. — The instrument 
 must be payable unconditionally and at all events in order 
 to be negotiable. 
 
 11 Bresenthal v. Williams, 1 Duv. .329. 
 
 iSLovell V. Hill, 6 Car. & P. 2.38; Caviness v. Rushton, 101 Tnd. .500. 
 
 13 Story on Promissory Notes, § 14. 
 
 14 Byles on Bills, 8. 
 
 15 Daniel on Negotiable Instruments, § 36 ; Cowan v. Hallack, 9 Colo. 
 578. 
 
 1*5 Daniel on Nepotiahle Insfniments, § SOa. 
 
 17. Johnson School Township v. Citizens' Bank, 81 Ind. 515; Smith v. 
 Allen, 5 Day, 337.
 
 § 78. CERTAINTY AS TO FACT OF PAYMENT, 47 
 
 If the order or promise be payable provided terms men- 
 tioned are eomplied with; as, for instance, that a railroad 
 bo built to a certain point by a certain time, it is not a 
 bill or note;^'"^ and likewise if payable provided a certain 
 act be not done;^" or that a certain receipt be produced ;^"^ 
 or another person shall not previously pay;"^ or provided a 
 certain ship shall arrive;^ or ])rovided the maker shall be 
 able;"^ or provided the maker shall live a certain time;^"* or 
 '' On account of contract when completed and satisfac- 
 tory;" "^ or provided one person shall first pay another a cer- 
 tain sum,^*' or upon any contingency.^ 
 
 The form or language used to give expression to the con- 
 ditions is immaterial, /. e. — " When A. shall marry," ^"^ or 
 " after arrival and discharge of coal by Brig A." '"^ In all 
 these cases the contingency implied deprives the instrument 
 of its negotiable character, as the events named may never 
 happen. If payable in instalments, no time for the pay- 
 ment of the instalments being mentioned, it is not a prom- 
 issory note.^*^ In Illinois, where the promise was to pay 
 a railroad company or order a certain sum, in such instal- 
 ments and at such times as the directors of the payee com- 
 pany might assess or require, it was held negotiable, and in 
 effect payable on demand, or in instalments on demand.^^ 
 
 ^ 78. Time need not be definitely ascertainable, if sure to 
 come. — If the time must certainly come, although the par- 
 ticular day is not mentioned, the instrument is regarded as 
 
 iSBlackman v. Lehman, 63 Ala. 547; Eldred v. Malloy, 2 Colo. 320. 
 
 19 Appleby v. Bcddolph, 8 Mod. 363. 
 
 20 Mason v. Metcalf, 8 Baxt. 440. 
 
 21 Eoherts V. Peake, 1 Burr. 323. 
 22Coolidge V. Rufrcrles, 15 Mass. 387. 
 23 Salinas v. Wrip^ht. 11 Tex. 572. 
 24Braham v. Bubb, Chitty on Bills [*135], 136. 
 2r. Home Bank v. Drnmfrolle. 15 X. E. Rep. 747. 
 20 Chapman v. Wright, 79 Me. 595. 
 
 27 Sloan V. McCarty, 134 Mass. 245. 
 
 28 Pearson v. Garrett, 4 Mod. 242. 
 
 29 Grant v. Wood, 12 Gray, 220. 
 30:MolTatt V. Edwards, Car. & M. 16. 
 31 White V. Smith. 77 111. 351.
 
 48 ESSENTIAL. REQUISITES OF INSTRUMENTS. §79. 
 
 negotiable, as the fact of payment is certain."''- If the in- 
 strimicnt is payable at, or ^\itllin a certain time after, a 
 man's death, it is sufficient, because the event must occur ;^^ 
 and a promise to pay '' on demand, after my decease, $850," 
 signed by the promisor, is a good note, negotiable as any 
 other, and binding on the promisor's estate at his death. ^^ 
 So a note payable " one day after date or at my death," ^° 
 and if the day of payment must come at the same time, 
 it has been said that the distance is immaterial.^^ The 
 English courts have gone so far as to hold that if payable at 
 a certain time after a government ship is paid off, it would 
 be good, because government is sure to pay;^^ but this de- 
 cision has been justly criticized and distrusted.^^ 
 
 In Massachusetts, held that a note payable " as soon as 
 realized, to be paid in the course of the season now coming,'* 
 is negotiable, for, whatever time may be imderstood by the 
 " coining season," whether harvest time or the coming year, 
 it must come by mere lapse of time and that must be the 
 ultimate limit of the time of payment.^^ 
 
 § 79. Rule liberally interpreted in favor of negotiability. — 
 The tendency of the courts is to liberally construe lan- 
 guage used, in favor of upholding the negotiability of the 
 instrument, and hence in many cases, especially in the 
 United States, apparent uncertainty of time has been ren- 
 dered certain by gi\dng to the debtor a reasonable time there- 
 after (the time prescribed) to make the payment. Illus- 
 trations: 
 
 A note payable on demand after date, " when convenient," 
 has been held payable absolutely in a reasonable time;*'^ 
 
 32 Daniel on Ne<,'otiab]e Instruments, § 43. 
 
 33 Cooke V. Colohan, 2 Stra. 1217; Conn v. Thornton, 46 Ala. 587; 
 Price V. .Tones, 105 Ind. 544. 
 
 34 Bristol V. Warner, ID Conti. 7. 
 
 35 Conn V. Thornton, 46 Ala. 588. 
 30 Worth V. Case, 42 N. Y. 362. 
 
 37 Andrews v. Franklin, 1 Stra. 24: Evans v. Underwood, 1 Wils. 262. 
 
 38 1 Parsons on Notes and Bills, 40 ; Edwards on Bills, 142. 
 39Cota V. Buck, 7 Mete. (Mass.) 588. 
 
 40 Works V. Hershey, 35 Iowa, 340.
 
 § 80. CERTAINTY AS TO FACT Ol' I'AYMK.NT. 49 
 
 and so a note payable " as soon as I can." "** So a note 
 payable in six months, " or as soon as 1 can witli due dili- 
 gence make the money out of said patent nght; " ^^ a note 
 payable in nine months, " or as A.'s horse earns the money in 
 the cavalry service; " ^"^ a note payable twelve months after 
 date, " or sooner if made out of a certain sale," "** have each 
 been held to be a valid, negotiable note payable absolutely at 
 the termination of the time expressed, and earlier, provided 
 the alternative event transpired. A note payable "from 
 the avails of logs bought of M. M., when there is a sale 
 made; " *^ or "When I sell my place where I now live," **^ 
 have been held in Maine payable absolutely after a reason- 
 able time. 
 
 § 80. Cases arising out of Confederate War. — During the 
 war between the United States and the Confederate States, 
 obligations were frequently given, payable when, or a cer- 
 tain time after, peace should be declared. Where a note 
 was expressed to be payable " six months after peace is de- 
 clared between the United States and the Confederate States 
 of America," it was held actionable six months after peace 
 €nsued.^' And the like ruling prevailed as to a note pay- 
 able '' thirty days after peace between the Confederate 
 States and the United States," "** and as to a not« payable 
 '* one day after the treaty of peace." *^ But in West Vir- 
 ginia, where a bond \vas payable " six months after the 
 ratification of peace between the United States and Con- 
 federate States," it seems to have been regarded as a wager 
 upon the success of the Confederacy; but the case went otf 
 
 •»! Kincard v. Higgins, 1 Bibb. 396. 
 ■*2 Palmer v. Hummer, 10 Kan. 464. 
 
 43 Gardner v. Barger, 4 Heisk. 669. 
 
 44 Ernst V. Stockman. 74 Pa. St. 1.3; Charlton v. Reed, 61 Iowa, 166. 
 
 45 Sears v. Wright, 24 Me. 278. 
 46Crooker v. Holmes, 65 Me. 195. 
 
 47 Brewster v. Williams, 2 S. C. 455. 
 
 48 Mortee v. Edwards, 20 La. Ann. 236. 
 
 49 Gaines v. Dorsett. 18 La. Ann. 563.
 
 50 ESSENTIAL REQUISITES OF INSTRUMENTS. § 81, 
 
 on a formal point. ^"^ In N"ortli Carolina, this view has been 
 adopted and applied,^^ and certainly is not without force. 
 Only the United States Senate can ratify a peace, and a 
 peace ratified between two countries implies the indepen- 
 dence of each. And further, it may be said that until the 
 condition precedent is fulfilled, no liability accrues. We 
 think the better view is that " six months after peace " 
 would fulfill the meaning of the terms as they were used 
 in the country, though they are the very words of Confed- 
 erate treasury notes; and it has been so decided in a num- 
 ber of cases, the courts construing the language according 
 to its popular import, and the probable intention of the 
 parties, rather than in its strict technical sense.^^ 
 
 § 81. Where payable out of a particular fund, not nego- 
 tiable. — ■ In accordance ^\dth these principles the negotiable 
 character of the instrument is destroyed if i„ be made pay- 
 able expressly or impliedly out of a particular fund. Illus- 
 trations: The insertion in an order to pay a certain sum 
 " on account of brick work done on a certain building " ""^ 
 or " out of rents," ^^ or " out of my growing substance," ^"^ 
 or " out of a certain claim," ^^ or " out of my part of the 
 estate of A.," ^^ or " out of amount due on contract." ^^ 
 On the same principle, receivers' certificates are not regarded 
 as negotiable, although framed with the negotiable words 
 usual in promissory notes.^'"^ 
 
 50 Harris v. Lewis, 5 W. Va. 576. 
 
 51 McNinch v. Ramsey, 66 N. C. 229. 
 
 52 Knight V. McReynolds, 37 Tex. 204; Mortee v. Edwards, 20 La. 
 Ann. 2.36; Nelson v. Manning, 53 Ala. 549. 
 
 53 Pitman v. Crawford, 3 Gratt. 127. 
 
 54 1 Parsons on Notes and Bills. 43. 
 55,Tosselyn v. Lacier, 10 Mod. 294. 
 
 50 Richardson v. Carpenter, 46 N. Y. 661. 
 57 Mills V. Kuykendale, 2 Blackf. 47. 
 58Hoagland v. Erok, 11 Neb. 580. 
 
 59 Staunton v. Railroad Co., 31 Fed. 587; McCurdy v. Bowes, 88 Ind. 
 583.
 
 §§ 82, 83. CERTAINTY AS TO AMOUNT TO BE PAID. 51 
 
 SECTION IV. 
 
 CERTAINTY AS TO AMOUNT TO BE PAID. 
 
 § 82. Amount must be in figures or written out or ascer- 
 tainable from the instrument. — The amount which tho debtor 
 promises or eiipi<;es to })ay must either be stated in the in- 
 strument itself, in figures or words, or must be ascer- 
 tainable from data somewhere on the paper. Illustra- 
 tions: A note to pay a certain sum, " and all other sums 
 whicli may be due " is not negotiable, as the aggregate 
 amount is not capable of definite ascertainment.*^ So, if it 
 be for a cei-tain sum " and whatever sum you may collect 
 of me for C; " ^ or if it be for " the proceeds of a ship- 
 ment of goods, value about £2,000, consigned by me to 
 you;"*^^ or "the demands of the sick club in part of in- 
 terest; " ^^ or " a certain sum, the same to go as a set-off; " ^ 
 or if it be expressed, " deducting all advances and expen- 
 ses; " ^^ or if it be for " $800 and such additional premium 
 as may be due on policy Xo. 218,171." ^ But a promise 
 to pay bearer a certain sum per acre for so many acres as 
 a certain tract contained was held to be negotiable as soon 
 as the number of acres was indorsed upon it.^^ 
 
 § 83. Payable with exchange does not destroy negotiability. 
 — While the authorities are not uniform, it mav be safelv 
 stated to be fairly well settled that if there be added to the 
 amount, " wdth exchange," or " W'ith current exchange on 
 another place," the commercial character of the paper is 
 
 <» Smith V. Xightiiifrale, 2 Stark. 375. 
 
 <'l Lcgro V. Staples, IG Me. 252; Lime Rock F. & M. Ins. Co. v. Hewitt, 
 eO Me. 407. 
 
 62 Jones V. Simpson, 2 B. & C. 318. 
 
 63 Bolton V. Dugdale, 4 B. & Ad. G19. 
 
 64 Clarke v. Percival, 2 B. & Ad. 600. 
 csCashman v. HajTies, 20 Pick. 132. 
 66Marret v. Equitable Ins. Co., 54 Me. 537. 
 67 Smith V. CloptoTi, 4 Tex. 109.
 
 52 ESSENTIAL REQUISITES OF INSTRUMENTS. §§ 84, 85. 
 
 not impaired, as that is capable of definite ascertainment.'^ 
 Exchange is an incident to the nse of negotiable instrnments 
 for the transmission of money from place to place, and its 
 nature and effect are well understood in the commercial 
 world. Exchange preserves the equivalence of amounts in 
 value, and does not introduce such an element of uncertainty 
 as destrovs the negotiabilitv of the instmment which em- 
 bodies it in its tenns.^^ 
 
 § 84. Stipulation to pay attorney's fees. — Quite frequently 
 in recent years bills and notes are met with framed in other 
 respects in the usual negotiable forms, but containing the 
 additional stipulation on the part of the drawer or maker 
 to pay collection or attorney's fees, and they have elicited 
 from the courts various and conflicting decisions. The cases 
 may be divided into four classes. 
 
 First. Those which sustain both the validity of the stipu- 
 lation and the negotiability of the instrument."^" 
 
 Second. Those which enforce the stipulation, but deny 
 the nee:otiabiHtv of the instrument.^^ 
 
 Third. The class that upholds the negotiability of the in- 
 strument, but regards the stipulation as penal and void.'^^ 
 
 Fourth. Those which adhere to the view that the stipu- 
 lation to pay the additional amount renders the transaction 
 usurious, and subjects the instrument to the operation of the 
 statutes against usury.'^^ 
 
 § 85. Correct view. — Such instruments should, we think, 
 be upheld as negotiable. They are not like contracts to 
 pay money and do some other thing. They are simply for 
 the payment of a certain sum of money at a certain time, 
 and tlie additional stipulations as to attorney's fees can 
 
 68 Daniel on Xe^otiable Instruments, § .54 ; Grutacup v. Woulloise, 2 
 MfLean. .581: .Johnson v. Frisbie, 1.5 Mich. 286. 
 
 09 Smith V. Kendall, 9 Mich. 242. 
 . 70 Schlosinger v. Arlino, 31 Fed. 648: Sperry v. Horr, 32 Iowa, 184. 
 
 71 Woods V. North, 84 Pa. St. 410; First Nat. Bank v. Gay, 71 Mo. 
 627. 
 
 72 Wright V. Travers, 73 Mich. 494; Gaar v. Louisville Banking Co., 
 11 Bush, 182. 
 
 73 State V. Taylor, 10 Ohio, .378; Dow v. Updike, 11 Nebr. 9.5.
 
 § 8U. CERTAINTY AS TO THE MEIML'.M OF I'AYMEXT. Jo 
 
 never go into effect if the tcvuia of the bill or note are com- 
 plied witli. They arc, therefore, incidental and ancillary to 
 the main engagement, intended to assure its performance^ 
 or to compensate for trouble and expense entailed by its 
 broach. At maturity, negotiable paper ceases to be nego- 
 tiable in the full commercial sense of the tenn, though it 
 still passes from hand to hand by the negotiable forms of 
 transfer; and it s eems paradoxical to hold that instruments 
 evidently framed as bills and notes are not negotiable during 
 their currency because when they cease to be current they 
 contain a stipulation to defray the expenses of collection.'"* 
 But "whatever may be said for and against the negotiability 
 of an instrument containing a provision " with reasonable 
 attorney's fees," it would seem that if the amount is fixed 
 by a certain percentage or a certain sum, the objection either 
 to the negotiability or validity of the paper would be ex- 
 tremely technical, if not untenable. 
 
 SECTIOX V. 
 
 CERTAINTY AS TO THE MEDIUM OF PAY'MEXT, WHICH MUST BE 
 
 ONLY IN MONEY. 
 
 § 86. Medium of payment must be money. — It is indis- 
 pensably recpiisite, in order to constitute a bill of exchange 
 or negotiable promissory note, that the direction or promise 
 be to pay in money. ^^ And if the instrument be expressed 
 to bo payable '' in cash or specific articles," in the alterna- 
 tive,"'' or in merchandise, as, for instance, "in good mer- 
 chantable whisky at trade price," "' or " in ginned cotton 
 at eight cents per pound," ^^ or '' in work," "^ or in any 
 other article than money,^'^ as, for instance, " an ounce of 
 
 74 Daniel on Xegotiable Instruments, § 62a; Benjamin's Chalmers* 
 Dippst, 17. 
 
 75Chitty on Bills r*132]. 153. 
 
 7C]\[atthc\vs V. Houghton, 2 Fairfax, 377. 
 
 77 Rhodes V. Lindley. Ohio Cond. 465; Chitty on Bills [*132]. 
 
 78 Lawrence v. Dougherty, ry Yerg. 435. 
 
 70Qninil)y v. ^Morritt, 11 TTinnphr. 43P. 
 
 SOAuerbach v. Priehett, 58 Ala. 451; McClellan v. Coffin, 93 Ind. 456.
 
 54: ESSENTIAL REQUISITES OF INSTRUMENTS. §§ 87-S9. 
 
 gold," ^^ it becomes a special contract, and by the law mer- 
 chant loses its character as conmiercial paper. 
 
 § 87. Legal tender Strictly speaking, the instrument 
 
 must be payable in legal tender, and hence a note payable 
 in '' current bank bills or notes," ^" or " office notes of a 
 bank," **^ or " in currency," ^* is not negotiable. 
 
 If payable in " good current money " or " current 
 money," the words thus employed have been construed to 
 mean legal tender money.^^ 
 
 § 88. It is not necessary, however, that the money should 
 be that current in the place of payment, or where the bill 
 is dra^vn; it may be in the money of any country whatever.^*^ 
 But it has been held that it is necessary that the instrument 
 should express the specific denomination of money when it 
 is payable in the money of a foreign country, in order that 
 the courts may be able to ascertain its equivalent value; 
 othei-ise it is not negotiable,®^ but such a requirement does 
 not seem to be consonant with sound principle. 
 
 Intention, to be gathered from the face of the paper, ac- 
 'cording to fixed rules, is the test of negotiability, and we 
 ■do not see how the idea of its possessing a negotiable quality 
 is excluded by the mere fact that the denomination of for- 
 eign money is not set out. A case, remarkable for its learn- 
 ing and ability, decided by the Supreme Court of Michigan, 
 adopts this view ; and there it has been held that a note pay- 
 :able " in Canada currency " is negotiable, the terms being 
 equivalent to Canada money.*® 
 
 § 89. Contract must be only for the payment of money. — 
 It is essential to the negotiability of the bill or note that 
 
 «l Roberts v. Smith, 58 Vt. 494. 
 
 S2McCormick v. Trotter, 10 Serg. & R. 94. 
 
 «3 Irvine v. Lowry, 14 Pet. 293. 
 
 S4 Haddock v. Woods, 4G Iowa, 433; Johnson v. Henderson, 76 N. C. 
 227. 
 
 80 Wharton v. Morris, 1 Dall. 124; Daniel on Negotiable Instruments, 
 5 56. 
 
 86 King V. Hamilton, 12 Fed. 478; Thompson v. Sloan, 23 Wend. 71. 
 
 87 Thompson v. Sloan, 23 Wend. 71. 
 
 88 Black V. Ward, 27 Mich. 193.
 
 § 80. CEIiTAINTY AS TO THE MEDIUM OF PAYMENT. 5o 
 
 it purport to be only for the payment of money. Suck at 
 least may be stated to be the general rule, for if any other 
 agreement of a different character be engrafted upon it, it 
 becomes a special contract clogged and involved with other 
 matters, and has been deemed to lose thereby its character 
 as a conuuercial instrument.'''' Jn accordance with this gen- 
 eral rule it has been held that a note or a certain amount 
 given for the hire of a negro, to which is added, " said 
 negro to be funiished Anth the usual quantity of clothing," 
 Avas not a negotiable promissory note, but a special contract 
 for the hiring and clothing of the negro.®*^ Ajid this would 
 seem to be the correct doctnne, though the view has been 
 taken that such a paper is negotiable, the obligation to pay 
 the money only passing to an indorsee.^^ So it has been 
 held that if the instrument be to pay money, and also " to 
 deliver up horses and a wharf; " "' or to pay money ^' and 
 take up a certain outstanding note," ^^ it is not a negotiable 
 note. 
 
 f-o P'leteher v. Thompson, 55 N. H. 308; Ingham v. Dudley, 60 Iowa, 16. 
 00 Barnes v. Gorman, 9 Rich. 297. 
 
 91 Baxter v. Stewart, 4 Sneed, 213; Gaines v, Shelton, 47 Ala. 413. 
 
 92 Martin v. Chauntry, 2 Stra. 1271. 
 
 93 Cook V. Satt€rlee, 6 Cow. 108.
 
 CHAPTER Y. 
 
 CONSIDERATION OF NEGOTIABLE INSTRUMENTS. 
 
 § 90. Bj consideration, is meant a benefit or gain of some 
 kind to the party making the promise, or a loss or injury 
 of some kind to the party to whom it is made. By the 
 common hnv a promise made mthout consideration was in- 
 valid, and in order to enforce any contract it was necessary 
 to aver and prove a consideration. 
 
 The most ancient exception to this rule was made in 
 reference to promises under seal, the solemn act of the party 
 in attaching a seal to the evidence of his contract being re- 
 garded as importing a consideration and estopping him from 
 denying it. The necessities of trade soon produced another 
 relaxation of the rule; and by the usage and custom of 
 merchants, bills of exchange and promissory notes came to 
 be regarded as prima facie evidences of consideration; and 
 peculiar qualities were accorded to them which were pos- 
 sessed by no other securities for debt. These qualities, so 
 far as they relate to the consideration of such instruments,. 
 we propose now to discuss.-^ 
 
 SECTIOX I. 
 
 COXSIDERATIOISr PRESUMED. 
 
 § 91. Difference between negotiable and nonnegotiable con- 
 tracts. — There is no doubt that if the instrument sued on 
 be negotiable, it is imnecessary to aver or prove considera- 
 tion, for it is imported and presumed from the fact that it 
 is a negotiable instrument.^ But if the paper does not 
 possess the quality of negotiability, it does not, per se, im- 
 port a consideration and it must be averred and proved, 
 unless it be stated on its face that it was given for " value 
 
 1 Daniel on Negotiable Instruments, § 160. 
 
 2 Daniel on Negotiable Instruments, § 161; Averett's Admr. v. Booker, 
 15 Gratt. 169; Louisville R. Co. v. Caldwell, 98 Ind. 251. 
 
 [56]
 
 §§ 92, 1)3. tiOOD AAL) VAixAUi.K com.sil»ki:ation«. 57 
 
 received," or contains iconic other etpiivalent expression, 
 in wliicli case it would be prima facie evidence of considera- 
 tion.* I 
 
 § 92. At conmiou law an action of debt cannot be sus- 
 tained upon a promissory note, as of itself importing a debt, 
 but the plaintiif must declare upon the contract as in as- 
 sumpsit, and must aver and prove a valuable consideration.* 
 But the English statute of Queen Anne provided that an 
 action might be nuiintained on a promissory note \\-ithout 
 alleging a consideration; and such is the effect of all statutes 
 which make promissory notes negotiable.^ It follows, there- 
 fore, that all such notes as are not negotiable by statute, 
 or upon which no action of debt is authorized by statute, 
 remain as at common law; and not importing consideration, 
 it must be alleged and proved.* 
 
 SECTION 11. 
 
 GOOD AND VALUABLE CONSIDERATIONS. 
 
 § 93. Accommodation bills and notes. — The mercantile 
 credit of parties is frequently loaned to others by the sig- 
 nature of their names as drawer, acceptor, maker, or in- 
 dorser of a bill or note, used to raise money upon, or other- 
 wise for their benefit. Such instruments are tenned accom- 
 modation paper. An accommodation bill or note, then, is 
 one to which the accommodating party has put his name, 
 without consideration, for the purpose of accommodating 
 some other party who is to use it, and is expected to pay 
 it.' Between the accommodating and accommodated par- 
 
 SAverett's Adnir. v. Booker, 15 Gratt. 169; Frank v. Irgens, 27 
 Minn. 43. 
 
 4 Daniel on Nej^otiablc Instruments, § 102. 
 
 f* Glasscock v. Glasscock, 0(1 Mo. G27. 
 
 6 Peasley v. Boatwright, 2 Leigh, 1!I8; Averett's Admr. v. Booker, l.> 
 Gratt. 165. 
 
 7Fant V. Miller. 17 Gratt. 47: .lefTerson County v. Railroad Co., 60 
 Iowa, 389.
 
 58 CONSIDERATION OF NEGOTIABLE IKTSTKUMENTS. § 94. 
 
 ties, the consideration may be sll0^^^l to be wanting,^ but 
 when the instrument has passed into the hands of a third 
 party for value, and in the usual course of business, it can- 
 not be; for as between remote parties, as we have already 
 seen, the consideration which the plaintiff gave for his title, 
 as well as that for which the defendant contracted the lia- 
 bility, must be unpeached in order to defeat a recovery.^ 
 And the circumstance that the accommodation maker was 
 assured that the payee would protect it being known to the 
 holder, does not weaken in any degree his title to recover. 
 § 94. An accommodation indorser, who has paid the 
 amount of the note to a subsequent indorsee, may recover 
 of the maker mthout being subject to an offset of the maker 
 against the payee, although he knew wdien he indorsed it 
 that the maker was a creditor of the payee for an amount 
 greater than the amount of the note.^*^ And the payee may 
 recover against the acceptor, although he knew wdien he 
 took the bill that the acceptance was for accommodation of 
 another party.^^ And it has been held that the accommo- 
 dation payee and indorser may recover the full amount of 
 the note, although he took it np by paying only a part.^^ 
 But tliis is, we think, erroneous. 
 
 If one member of a firm obtains an accommodation note 
 payable to himself, and afterward indorses it to a third per- 
 son, who reindorses it to the same firm, before maturity, 
 and for good consideration, such firm cannot recover against 
 the maker, both parties being affected mth the notice of a 
 want of consideration.^^ 
 
 § 95. An accommodation bill or note is not considered a 
 real security, but a mere blank, until it has been negotiated, 
 
 SEvansville Nat. Bank v. Kaufman, 93 N. Y. 273; Bank of British 
 North America v. Ellis, 6 Sawy. 98. 
 
 9Violett V. Patton, 5 Cranch, 142; Stephens v. Monongahela Nat. 
 Bank, 88 Pa. St. 157. 
 
 10 Barker v. Barker, 10 Gray, 339, 
 
 11 Spurgeon v. McPheeters, 42 Ind. 527. 
 
 12 Daniel on Negotiable Instruments, §§ 190, 1353. 
 i3Quinn V. Tuller, 7 Cush. 244.
 
 §§ 9G-98. GOOD AND VALUABLE CONSIDERATIONS. 
 
 59 
 
 iind it then becomes binding upon all of the accommodation 
 indorse rs in like manner and to the like effect as if they 
 were successive indorsers/* but until it has been negotiated 
 any party may withdraw his indorsement, acceptance, or 
 other liability ui)on it, and rescind his engagement;^' and 
 that i-ight is not impaired by the circumstance that he may 
 be indemnified by an assignment, or other security. ^*^ 
 
 § 96. A person who indorses a note as an accommodation 
 indorser for the payee, such note having been made by an 
 accommodation maker, is subject to all the obligations and 
 acquires all the rights of a party to negotiable paper.^^ 
 
 If obliged to take up such note, the accommodation maker 
 cannot set U]> fraud on the part of the payee, in the incep- 
 tion of the note, as a defense to his suit.^® 
 
 § 97. Valuable considerations. — Xot only will money paid, 
 or advances made, or credit given, or work and labor done, 
 constitute a sufficient consideration for a bill or note, but 
 receiving a bill or note as security for a debt or forbearance 
 to sue upon a present claim or debt, or the dismissal of a 
 pending suit, or the surrender of a prior valid note, or the 
 compromise of a supposed cause of action, or becoming a 
 surety or giving an extension of time to an imputed debtor, 
 or doing any other act at the request of the drawer, in- 
 dorser, or acceptor, will be equally sufficient to enforce his 
 engagement. ^^ A note on condition that the payee abstain 
 for a certain time from intoxicating drink would be valid.^ 
 So, also, a note in consideration of a release of an inchoate 
 right of dower.^ 
 
 § 98. Bankers receiving the bills or notes of their cus- 
 tomers for collection are considered holders for sufficient 
 
 14 Whitworth v. Adams, 5 Rand. .342 ; May v. Boisseau, 8 Leigh, 164. 
 
 15 Second Nat. Bank v. Howe, 40 Minn. 390. 
 16 May V. Boisseau, 8 Leigh, lti4. 
 
 17 Daniel on Negotiable Instruments, § 192. 
 
 18 Laubach v. Pursell, 35 N. J. L. 434. 
 
 i» Daniel on Negotiable Instruments, § 183. 
 
 20Lindell v. Rokes, 60 Mo. 249. 
 
 21 Nichols V. Nichols, 136 Mass. 250.
 
 60 COXSIDERATION OF >'EGOTIABLE INSTRUMENTS. § 09. 
 
 consideration, not only to the extent of advances already 
 made by them cither specifically or npon account, but also 
 for future responsibilities incurred upon the faith of them.'^ 
 The balances upon an account are a shifting consideration 
 for bills and notes deposited as security ^yiih the banker.^'^ 
 Thus, where one l)ank, which w^e may call A., sent an ac- 
 commodation bill accepted by C, to another bank, wdiich 
 we may call B., to secure an indebtedness upon account; 
 and when the bill became due, the latter bank had become 
 indebted to the former, but the bill ^vas not withdrawn, and 
 subsequently the indebtedness shifted back, and the original 
 debtor, bank A., became bankrupt, owing to the correspon- 
 dent, 1>., a sum upon account, it was held that the latter 
 could recover against C. upon the accommodation bill ac- 
 cepted by him.^'* AYhere a bank discounts a bill before 
 maturity, paying part of the proceeds in money and ap- 
 plies the residue in payment of a past due note of the payee 
 which is surrendered, it is a holder for valuable considera- 
 tion."^ Where a note was delivered by the maker to the 
 payee to be discounted for the maker's benefit, and the 
 payee left it at the bank with the understanding that he, 
 the payee, might draw against it, it Avas held in a suit against 
 the maker, of w^hose interest in the note the bank had no 
 notice, that the maker was liable for the sums drawn against 
 the note by the payee, the payment of wdiich sums was in 
 effect a discount of the note to the amount so paid; also 
 that the result would be the same if it should be considered 
 that the note was simply pledged for the sums paid upon 
 the draft.2« 
 
 § 99. Services. — Professional services, whether of a physi- 
 cian, attorney, or other person, in the learned or skilled 
 
 22Byles on Hills ( Sharswood's ed.), 230; Bosanquet v. Dudman, 1 
 Stark. 1 ; Percival v. Frampton, 2 Cromp., M. & R. 180. 
 
 23 Bank of Metropolis v. New England Bank, 1 How. 239, 17 Pet. 
 174; Swift V. Tyson, 16 Pet. 21. 
 
 24 Atwood V. Crowdie, 1 Stark. 483 (2 Eng. C. L.). 
 
 25 Mechanics', etc., Bank v. Crow, 60 N. Y. 85. 
 20 Piatt V. Beebe, 57 X. Y. 339.
 
 § 100. GOOD AND valuablp: consideeations. 61 
 
 professions, constitute, in general, a sufficient consideration 
 for a bill or note; and the consideration that the plaintiff, 
 an attorney, should prevent the approval of the conmiand- 
 ing general to the sentence of a military court condemning 
 a guerrilla to death, is valid.^ Services of any business 
 character are sufficient, and the inadequacy of the services 
 or extravagance of the compensation is not material.^ 
 Services rendered in procuring a ])ardon for an oifense have 
 also been respected ;"" though it has been said by some of the 
 authorities that this would contravene public policy unless 
 done by leave of the court.^" This is, we think, too severe. 
 Services exerted in procuring the passage of an act through 
 a legislative body are not recognized as the legitimate ex- 
 ercise of the legal profession; and compensation for them 
 cannot be recovered.^^ If contingent upon the passage of a 
 bill, it would 1)0 ob\'ious that they were illegitimate.^" 
 
 § 100. As to pre-existing debts. — There is no doubt that a 
 pre-existing debt of the drawer, maker, or acceptor is a valid 
 consideration for his drawing or accepting a bill or executing 
 a note, and indeed is as frequently the consideration of 
 negotiable paper as a debt contracted at the time,^^ and it 
 is equally as valid and sufficient consideration for the in- 
 dorsement and transfer to the creditor of the bill or note 
 of a third party which is in his hands. And the best con- 
 sidered, as well as the most numerous, authorities regard 
 the creditor who receives the bill or note of a third party 
 from his debtor either in payment of,^^ or as collateral se- 
 
 2T Thompson v. Wliarton, 7 Bush, 4G3; Mowat v. Brown, 19 Fed. 87. 
 28Co\vee V. Cornell, 75 N. Y. 91. 
 26 Meadow v. Bird, 22 Ga. 246. 
 
 aoChitty on Bills (13th Am. od.). 100; Thompson on Bills (Wilson 
 ed.), 70. 
 
 31 Marshall v. B. & O. R. Co., 10 How. 334; Clippinger v. Hepbaugh, 
 5 Watts & S. 31;-). 
 
 32 Mills V. Mills, 40 X. Y. 543. 
 
 33 Swift V. Tyson, 16 Pet. 1; Townsley v. Rumrall, 2 Pet. 170; Mc- 
 Intyre v. Yates, 104 111. 500. 
 
 34 Swift V. Tyson, 16 Pet. 1: Bank of Sandusky v. Scoville, 24 Wend. 
 115: Schepp v. Carpenter, 51 X. Y. ('.02.
 
 62 COXSIUEKATION OF ^'EGOTIABLE INSTRUMENTS. § 101, 
 
 ciirity for, his debt, as entitled to the full protection of a 
 bona fide holder for value, free from all equities which might 
 have been pleaded between the original parties.^"^ But there 
 is much controversy on this subject, and it is hereinafter 
 more fullv treated.^*' 
 
 SECTION III. 
 
 WHAT AEE ILLEGAL CONSIDERATIONS. 
 
 §101. As to illegal considerations generally. — A nego- 
 tiable contract which is founded upon an illegal considera- 
 tion, in whole or in part, is void;^'^ for the law will not aid 
 one who seeks, or has consented to, its violation. Some- 
 times the consideration is illegal, because opposed to the gen- 
 eral principles of the common law; and sometimes because 
 it is specially interdicted by statute. The considerations 
 which are illegal at common law are: 1. Such as violate 
 the rules of religion, morals, or public decency; and, 2. Such 
 as contravene public policy.^^ 
 
 § 102. Illegal considerations by the common law; wagers, 
 futures, etc. — As a general rule, wagers were not illegal by 
 the conmion law.^^ But wagers upon the sex of a person;^*' 
 that an unmarried female would bear a child ;*^ upon the 
 result of a prize fight ;'*^ or the result of a criminal trial ;"*^ 
 or the result of an election;'*'* or upon the question of war 
 or peace,^^ would be illegal as opposing public policy and 
 
 35 Daniel on Negotiable Instruments, § 832 ; Devendorf v. W. Va. O. 
 & O. L. Co., 17 W. Va. 176. 
 
 .•i6 Daniel on Negotiable Instruments, §§ 820, 826, 827, 831. 
 
 3TFrick V. Moore, 82 Ga. 163; Daniel on Negotiable Instruments^ 
 § 204. 
 
 38 Daniel on Negotiable Instruments, § 195. 
 
 39 Good V. Elliott, 3 T. R. 093. 
 
 40 Da Costa v. Jones, Cowp. 729. 
 
 41 Ditchburn v. Goldsmith, 4 Campb. 152. 
 
 42 Hunt V. Bell, 1 Bing. 1, 7 Moore, 212. 
 
 43 Allen V. Heam, 1 T. R. 57; Rust v. Gott, 9 Cow. 169. 
 44Lockhart v. Hullinger, 2 HI. App. 465; Attwood v. Weeden, 12 
 
 R. I. 293. 
 
 45 Thompson v. Harrison, S. C, Tex., Dallam's Dec, 466.
 
 8 103. ILLEGAL. CONSIDEKATIOKS. Go 
 
 sound morals. And, as a general rule, in the United States 
 all niannei- of wagers are declared illegal by statutory enact- 
 ments; and even where not prohibited by statute, they are 
 regarded as opposed to public policy and sound morality.^'* 
 Putting up margins in stock speculations is regarded as a 
 species of gambling, and notes given for such margins are 
 void as upon illegal consideration."*^ In ^lassachusetts one 
 who pays a gambling debt for another cannot recover the 
 amount.'**' And also, as a general nde, in the United States, 
 contracts for the sale or purchase of commodities, such as 
 cotton or grain, when no actual delivery of the same is 
 contemplated or intended, such transactions being com- 
 monly known as " futures," are held contrary to puldic 
 policy and void. A bona fide contract for the future de- 
 livery of any article is valid, but if the contract amount 
 to a mere staking of margins to cover the difference between 
 the price of the article at the time of purchase and the 
 time of delivery, it is void.^^ 
 
 § 103. As to considerations which oppose public policy. — 
 Considerations which oppose public policy are never re- 
 spected by the law, and contracts founded upon them are 
 imiversally condemned. Contracts in general restraint of 
 trade ;^^ or restraining or preventing marriage even for a 
 tinie;'^^ or to assist another in furthering a marriage where 
 the promisor has no right to interfere;'"" champertous con- 
 tracts between attorney and client,^^ to procure or sell a 
 public office^* or votes; or to induce a candidate to with- 
 draw ;^^ to suppress evidence or interfere with the course 
 
 ■«' IJoupjhner v. Mayer, 5 Colo. 75. 
 
 47 Fareira v. Gabell, 89 Pa. St. 89. 
 
 48Scolluns V. Flyn. 120 Mass. 271. 
 
 40Bigelow V. Ronedict, 70 N. Y. 202; Gregory v. Wendell, 30 Mich. 
 337; Irwin v. Williar, 110 U. S. 409. 
 
 ."•oChitty on Bills [*83], 99. 
 
 51 Hartley v. Rice, 10 East, 22 ; Tx)\ve v. Peers. 4 Burr. 2225. 
 
 fiz Roberts v. Roberts, 3 P. Wms. 66 ; 1 Parsons on Contracts, 555, 
 556. 
 
 r>:« Million v. Ohnisberg, 10 Mo. App. 432. 
 
 54 Richardson v. Mellish, 2 Bing. 229; Martin v. Wade, 37 Cal. 168. 
 
 55 Ham V. Smith, 87 Pa. St. 63.
 
 64 COXSIDERATIOX OF XEGOTIABLK INSTKUME-S'TS. § 104. 
 
 of justice by dropping a eriniinal prosecution;^" and con- 
 tracts to indemnify a person in doing an act of known ille- 
 gality as inducement thereto;"' or to do anything reprehen- 
 sible for its injurious effects upon the feelings of third per- 
 sons; or in fraud of the rights and interests of third per- 
 sons,^** are instances of the kind of contracts which the law 
 will not recognize. 
 
 Abandonment of the prosecution of an offense against the 
 public of which the law requires prosecution is not a good 
 consideration.^'* It is not necessary to stamp the transaction 
 \\dth illegality that a felony should have been committed;'^ 
 but a note given to a prosecutor after trial and conviction 
 for the expenses of the prosecution would be valid ;®^ other 
 instances of a similar character might be multiplied. The 
 true question in such cases seems to be, was the note given 
 for the money, or to settle the prosecution. In the first 
 event, it would be valid; in the latter, illegal and void,*^ 
 
 § 104. As to considerations illegal by statute. — The ho?ia 
 fide holder for value who has received the paper in the 
 usual course of business is unaffected by the fact that it 
 originated in an illegal consideration, without any distinc- 
 tion between cases of illegality founded in crime, involving 
 moral turpitude, which are termed inula in se, and those 
 founded in positive statutory prohibition which are termed 
 mala prohibita. The law extends this peculiar protection 
 to negotiable instruments, because it would seriously em- 
 barrass mercantile transactions to expose the trades to the 
 consequences of having the bill or note passed to him im- 
 peached for some covert defect.^^ There is, however, one 
 
 56 Commonwealth v. Johnson, 3 Cush. 454; Soule v. Bonney, 37 Me. 
 128. 
 
 STChitty on Bills [*85], 102; Goodale v. Holdridge, 2 Johns. 193. 
 
 58 Sullivan v. Bonesteel, 79 N. Y. 631; Ward v. Doane, 43 N. W. 980. 
 
 59Ha\Ties V. Rudd, 102 N. Y. 372; National Bank v. Kirk, 90 Pa. 
 St. 49. 
 
 eo Rogers v. Blythe, .51 Ark. 523; Chandler v. Johnson, 39 Ga. 85. 
 
 61 Kirk V. Strickwood, 4 B. & Ad. 421. 
 
 62 Godwin v. Crowell, 56 Ga. 566. 
 
 63 New V. Walker, 108 Ind. 365; Thompson v. Samuels, 14 S. W. 143.
 
 § 105. BY WHAT LAW LEGALITY DETERMINED. G5 
 
 exception to this rule; that when a statute, expressly or by 
 necessary implication, declares the instrument absolutely 
 void, it gathers no vitality by its circulation in respect to 
 the parties executing- it;'^"' though even upon such instru- 
 ments an indorser may be held liable to a bona fide holder 
 without notice.^ 
 
 There are a very few cases in which the statute renders 
 such instiiiments absolutely void; and the most important, 
 if not the only instances now to be met with, are the statutes 
 against usury and gaming.^" 
 
 SECTIOX IV. 
 
 BY WHAT LAW LEGALITY OF CONSIDERATION IS DETERMINED. 
 
 § 105. Determined by the law of country where made. — 
 The legality of the consideration of a contract is to be de- 
 termined by the laws of the State or country where the 
 contract is made and not by those of the State or country 
 where the suit is brought. The rules of every nation, from 
 comitv, admit that the laws of everv other nation in force 
 within its own limits ought to have the same force every- 
 where, so far as they do not prejudice the rights of other 
 governments or their citizens.^^ The rule is founded not 
 merelv on the convenience, but on the necessity of nations; 
 for otherwise it would be impracticable for them to carry 
 on an extensive intercourse or commerce with each other, 
 or even for social order to exist. ^^ 
 
 § 106. Governed by law in existence at the time contract 
 was made. — The laws in force at the time a contract was en- 
 tered into detonnino its legality and effect; and where a 
 
 '!■! Vallett V. Parker, 6 Wend, dl."); Hatch v. Burroughs, 1 Woods, 439; 
 Woods V. Armstrong, 54 Ala. 150. 
 
 05 Daniel on Xegotiahle Instruments, § 07.3 ct seq. 
 
 60 Savings Bank of Kansas v. National Bank of Commerce, 38 Fed. 
 800; Union Nat. Bank v. Fraser, 63 Miss. 231. 
 
 eTThorington v. Smith, 8 Wall. 11: Cook v. Lillo, 103 U. S. 793; 
 Daniel on Negotiable Instruments, § Sn.") et scq. 
 
 csBoyce v. Tabb, 18 Wall. 548; Daniel on Negotiable Instruments, 
 § 866. 
 
 5
 
 G6 CONSIDERATIOX OF NEGOTIABLE INSTKUMENTS. § 107. 
 
 law prohibiting the sale of spiiituous liquors has been re- 
 pealed, it does not thereby validate a note given in violation 
 of the statute Avhen it was in force/''"^ .A.nd accordingly it 
 has been held by the Supreme Court of the United States 
 that a note dated March 26, 1861, and given for a slave, 
 could be recovered on, not-wdthstanding that slavery was 
 abolished on the 1st day of January, 1862, and the^ contract 
 of sale contained the warranty, " the said negro to be a slave 
 for life," '^' and also notwithstanding the thirteenth amend- 
 ment to the constitution, made in 1865, by which it is 
 ordained that '' neither slavery nor involuntary servitude 
 shall exist in the United States nor in any place subject to 
 their juiisdiction." 
 
 In the State tribunals of the Southern States, where this 
 question has been of much consequence, conflicting views 
 have been taken, but many of the cases concur in judgment 
 with the Supreme Court of the United States,'^^ and in other 
 States of the Union, both before and since the war, the 
 principles of these decisions have been asserted/^ 
 
 SECTION V. 
 
 PARTIAL WANT, FAILURE, OR ILLEGALITY OF CONSIDERATION. 
 
 § 107. Partial want of consideration. — Whenever the de- 
 fendant is entitled to go into the question of consideration, 
 he may set up the partial as well as the total want of 
 consideration.^" 
 
 So, where a father gives his son a note partly for services 
 and partly as a gratuity, the partial want of consideration 
 
 <:*J Daniel on Negotiable Instruments, § 168; Holden v. Cosgrove, 12 
 Gray, 216. 
 
 TOOsborn V. Nicholson, 13 Wall. 655; Boyce v. Tabb, 18 Wall. 548. 
 
 "l McElvain v. ]\Iudd, 44 Ala. 48; Thompson v. Warren, 5 Coldw. 644; 
 Dowdy V. McClellan, 52 Ga. 408; Calhoun v. Calhoun, 2 S. C. 283. 
 Contra, Lapricc v. Bowman, 20 La. Ann. 234; Lytle v. Wheeler, 21 La. 
 Ann. 192. 
 
 72Roundtree v. Baker, 53 111. 241. 
 
 ""i McGregor v. Bishop, 14 Ont. 10; Daniel on Negotiable Instruments', 
 § 201.
 
 ^ 108. I'AliTlAL. WANT, 1:TC., OF CO.NSIDEEATION. U7 
 
 might Ixi pleaded as to such ixu-tioii of the tmiouiit as was 
 gratuitous; and it wouhl bo ii<> objection that no distinct 
 amount was lixcd upon as compensation for the services, 
 but it would bo for the jury to settle what amount was 
 founded on the one consideration, and what on the other. ^* 
 If a note be given by mistake on settlement of accounts 
 for an amount greater than that actually due, there is want 
 of consideration as to the excess, and between the parties 
 it may be pleaded." 
 
 § 108. Total and partial failure of consideration. — The 
 total failure of consideration is as good a defense to a suit 
 upon a bill or note as the original want of it, and is con- 
 lined to the like parties. If the contract is rescinded, the 
 consideration of the bill or note totally fails, and payment 
 of it cannot be enforced.^*' 
 
 And a partial failure of the consideration is a good de- 
 fense pro tanto.'^ But such part as is alleged to have failed 
 nmst be distinct and definite, for only a total failure, or the 
 failure of a sjDecific and ascertained part, can be availed of 
 by way of defense; and if it be au unliquidated claim the 
 defendant must resort to his cross-action."^ Thus, where 
 bills have been accepted in consideration of the payee giving 
 the acceptor the lease of a house, and he let him into posses- 
 sion, but gave no lease, it was held no defense to an action 
 on the bill, but that there Avas merely a counter-claim for 
 danuiges."^'"* So where the bill was aiven for work to be done, 
 and the work when done was bungled in ])art, and not 
 Avorth the amoimt of the bill.^ It may be observed, how- 
 ever, that in most of the States the common-law rule re- 
 stricting the defense of set-ofF to H(|uidatrd claims, is so far 
 modified as to admit equitable defenses in the nature of 
 
 74 Parish v. Stone. U Pick. 198. 
 
 75Seeley v. Engell, 1.3 K Y. .')42 : Claxon v. Demarro. 14 Bush. 17.3. 
 76Hackpr v. Brown, 81 Mo. OS; Maltz v. Fletcher, rrl Mieh. 484. 
 7TAn;ne\v V. Alden, 84 Ala. r)02 : Torinus v. Buckhani, 29 Minn. 128. 
 "SEImiTiger v. Drew. 4 ^McLean, 388; Stone v. Peake, IG Vt. 213; 
 Pnlsifer v. Hotchkiss, 12 Conn. 234. 
 "S* ^foppridge v. Jones, 14 East. 485. 
 SOTrickey v. Larne, 6 M. & W. 278.
 
 C8 CONSIDERATION OF NEGOTIABLE INSTRUMENTS. § 109. 
 
 set-off, as fraud or mistake in the procurement of a contract, 
 or any other matter entitling the party to relief in ec^uity 
 against the obhsation of the contract.^^ 
 
 § 109. Partial illegality of consideration. — When the de- 
 fense is founded on illegality of consideration, it is to be 
 distinguished from a defense on the ground of a want or 
 failure of consideration by this peculiarity — that a partial 
 illegality vitiates the bill or note in tuto, while the partial 
 want or failure of consideration only vitiates it pro ianto.^^ 
 
 And a mortgage to secure a bill or note of which the 
 consideration is in part illegal is also wholly void.^^ The 
 reason of the distinction is based mainly upon the ground 
 of pubHc policy, the courts not undertaking to unravel a 
 web of fraud for the benefit of the party who has woven 
 it.^^ If, however, the legal portion of the consideration 
 were distinctly severable, the party could still recover by the 
 proper action to its proportionate extent,^^ though not upon 
 the bill or note.^*^ There is authority, however, to the 
 effect that there may be a recovery on the bill or note to 
 the extent of the distinctly severable and valid considera- 
 tion.^^ Where the legal part of the consideration exceeds 
 the amount of the note, though another part of the con- 
 sideration be illegal, the note will be valid.^ And it has 
 been held that where a bill is given in renewal of other bills, 
 one of which was upon an illegal consideration, it would be 
 valid as to the amount which the legal bills evidenced and 
 void as to the rest for want of consideration.^^ 
 
 81 Applegarth v. Robinson, 65 Md. 493. 
 
 82Hanauer v. Doane, 12 Wall. 342; Hyslop v. Clark, 14 Johns. 465; 
 McXamara v. Gargett, 08 Mich. 454. 
 
 83Brigham v. Potter, 14 Gray, 522; Denny v. Dana, 2 Gush. 160. 
 84Byle.s on Bills [*140], 256. 
 
 85 Carlton v. Woods, 8 Fost. 290; Widoe v. Webb, 20 Ohio St. 431. 
 80 Robinson v. Bland, 2 Burr. 1077; Hanauer v. Doane, 12 Wall. 342. 
 87Clopton V. Elkin, 40 Miss. 95. 
 
 88 Warren v. Chapman, 105 Mass. 87. 
 
 89 Doty V. Knox County Bank, 16 Ohio (N. S.), 133.
 
 g§ 110,111, WHEN CONSIDERATION Ol'EX TO INQUIRY. GO 
 
 SECTION VI. 
 
 BETWEEN WHAT TAltTlKS TliE OONSIDEHATION IS OPEN TO 
 
 INQUIRY. 
 
 § 110. Who are parties privy in negotiable instruments. — 
 Tho same rule which admits iiKjuiry into the consideratiou 
 of negotiable paper between the original payor and payee 
 extends to admit such inquiry in any suit between parties 
 between whom there is a privity. That is to say, between 
 the immediate ])artios to any contract evidenced by the 
 drawing, accepting, making, or indorsing a bill or note, it 
 may be shown that there was no consideration (as, that it 
 was for accommodation);^*' or that the consideration has 
 failed, or a set-off may be pleaded; but as between other par- 
 ties remote to each other, none of these defenses are ad- 
 missible. It becomes im]>ortant then to determine who are 
 to be regarded as the immediate parties, or parties between 
 whom there is a privity, to a negotiable instnmient, and 
 wlio are remote. Among the former may be classed: (1) 
 The drawer and acceptor of a bill;^^ or (2) The drawer and 
 payee^^ of a bill as a general rule; (3) The maker and payee 
 of a note;^''^ and (4) The indorser and immediate indorsee 
 of a bill or note.'''* 
 
 § 111. Who are remote parties to negotiable instruments 
 
 But the want of consideration, or the failure thereof, can- 
 not be pleaded in a suit brought: (1) By an indorsee 
 against the maker of a noto;"^ (2) By an indorsee against a 
 
 90 Murphy v. Keyes, 39 N. Y. Sup. Ct. 18; Wilson v. Ellsworth, 25 
 Kebr. 240. 
 
 01 Tliomas v. Thomas, 7 Wis. 47(i; Spurgcon v. McPheeters, 42 liui. 
 527. 
 
 92]McCuIloch V. Hoffman. 10 llun, V.V.i; Spurgeon v. McPheeters, 42 
 Ind. 527. 
 
 9:» Konncdy v. Goodman. 14 Nebr. oS5; I'launi v. Wallace, 9 S. E. 
 571. 
 
 9-tBarnett v. Offcrman, 7 Watts, 130; Klein v. Keyes, 17 Mo. 326; 
 Piatt V. Snipes, 43 Ark. 23. 
 
 ©5 Price V. Keen, 40 X. .1. L. 332; Burnos v. Scott, 117 U. S. 582.
 
 70 CONSIDERATION OF NEGOTIABLE INSTRUMENTS. § 112. 
 
 prior, but not liis immediate indorser;®*^ (3) By tlie indorsee 
 against the acceptor of a bill,"' nor by the payee against 
 the acceptor of a bill, as a general rule.*^^ They are re- 
 garded as remote parties to each other, and between such 
 parties two distinct considerations must be inquired into in 
 order to perfect a defense against the holder: (1) The con- 
 sideration which the defendant received for his liability; 
 and (2) Tliat which the plaintiff gave for his title."" And 
 if any intermediate holder gave value for the instrument, 
 that intervening consideration will sustain the plaintiff''s 
 title.^ 
 
 § 112. Want, failure, or fraudulency of consideration. — 
 If the original consideration were tainted with fraud or ille- 
 gality, or has failed in whole or in part, and the bill or note 
 has passed into the hands of a bona fide holder for value 
 without notice, yet if it be returned for a valuable considera- 
 tion to the payee who is a privy to the original considera- 
 tion, he could stand upon no better footing than if the 
 instrument had remained in his hands. ^ 
 
 § 113. Defenses between privy parties That the bill or 
 
 note has been lost or stolen,"' or w^as executed under duress,* 
 or under fraudulent misrepresentations,^ or for fraudulent 
 consideration,'' or for illegal consideration," or has been 
 fraudulently obtained from an intennediate holder,^ or 
 
 98 Etheridge v. Gallagher, 55 Miss. 464 ; 1 Parsons on Notes and Bills, 
 170. 
 
 •■»- Flower v. Sadler, 10 Q. B. Div. 572. 
 
 osLaflin & Rand Powder Co. v. Sinsheimer, 48 Md. 411; Hoffman & 
 Co. V. Bank of Mihvaidvee, 12 Wall. 181. 
 
 S9 United States v. Bank of Metropolis, 15 Pet. 393; Swift v. Tyson, 
 16 Pet. 1; Goetz v. Bank of Kansas City, 119 U. S. 556. 
 
 IBoyd V. McCann, 10 :\[d. 118; Watson v. Flannagan, 14 Tex. 354. 
 
 2 Sawyer v. Wiswell, 9 Allen, 42; Kost v. Bender, 25 Mich. 516; 
 Cline V. Templeton, 78 Ky. 550. 
 
 3 Mills V. Barber, 1 M. & W. 425. 
 
 4 Clark V. Peace, 41 N. H. 414; Griffith v. Sitgreaves, 90 Pa. St. 161. 
 sVathir v. Zane, 6 Gratt. 246; Hutchinson v. Bogg, 28 Pa. St. 294. 
 fi Rogers v. Morton, 12 Wend. 484. 
 
 7 Shirley v. Howard, 53 111. 455; Holden v. Cosgrove, 12 Gray, 216. 
 s 1 Parsons on Notes and Bills, 188.
 
 g 114. JKMV ll.l.lU.Ai.nV MAV KK rLRliliD. 71 
 
 been in any way the subject of fraud or felony,^ or has 
 been niisapproi)riate(l and diverted/*^ or that it was given as 
 colhiteral security/^ or for a loss for which the party was not 
 liable, or that otherwise it was without valuable considera- 
 tion," is a good defense as between the parties privy to it. 
 And in some cases that it was given by mistake for too great 
 a sum, or when no sum was due, the evidence showing 
 fraud or a total or ])artial want of consideration.^"' The same 
 defense which the defendant might make to an action by 
 an indorsee of the note given by him, and the same require- 
 ment of proof, may be made by him in an action on a re- 
 newal of a former note, both notes being regarded as given 
 upon the same consideration.^* 
 
 SECTIOX VI 1. 
 
 ^IO^V ILLEGALITY :MAY be purged KEXEWAL OF IXSTRU- 
 
 MEXT. 
 
 § 114. As to bills and notes given in renewal. — If the con- 
 sideration of the original bill or note be illegal, a renewal 
 of it will be open to the same objection and defense;^"' and 
 if the original instrument Avas obtained by fraud, a renewal 
 of it by the original ])arties -without knowledge of the fraud, 
 would stand upon the same footing.^*^ But if at the time 
 the renewal was executed the parties signing knew of the 
 fraud in the original, they will be regarded as purging the 
 contract of the fraud, and cannot then plead it.^' So if 
 the maker of a note held by an indorsee who knew that the 
 
 '•'Holden v. Cosgrove, 12 Graj% 216; Western Bank v. Mills, 7 Cusli. 
 54G. 
 
 lo:\rerchants' Xat. Bank v. Comstnck. 55 N. Y. 24. 
 
 11 Lcigliton V. Bowon, 75 Me. 504. 
 
 12 Doxter Sav. Hank v. Copeland, 77 Me. 269. 
 iSForman v. Wri^lit. 11 Com. B. 481. 
 l-tDaiiiol on Negotiablo Instruments, §§ 170, 205. 
 
 i5Schutt V. Evans, 100 Pa. St. 627; Wegner v. Bieiing, 65 Te.x. 511; 
 Sawyer v. ^Yis^vell, 9 Allen. 39. 
 10 Sawyer v. Wiswcll. it Allen. 39. 
 "Sawyer v. Wiswell, Allen, 30; Calvin v. Sterrett, 41 Kan. 220.
 
 72 C0A"SIi)EKAT10.\ OF ^•l•:GOTlABLE KNSTKUMEXTS. § 115. 
 
 consideration between the maker and the payee had failed 
 when he took it, execntes to him a new note, it has been 
 hehl to be a waiver of the defense, and the payee of the 
 new note can recover. 
 
 § 115. Partial illegality of instrument. — If a note or bill 
 be given for a consideration which is in part illegal, a new 
 note for the same, or in renewal of the first, is equally void.^'^ 
 But a new note for that part of the consideration which is 
 legal is good and valid. And if several new notes are given 
 for the old one, some of the new^ ones may be taken to be for 
 the legal part, and so be valid, especially if they are only 
 adequate to this part or if the deduction be otherwise 
 favored by circumstances.^^ 
 
 IS Gill V. [Morris. 11 Heisk. 614; Keyes v. Mann, 63 Iowa, 560. 
 
 19 Chapman v. Black, 2 B. & Aid. 588; Seeligson v. Lewis, 65 Tex. 
 115; Preston v. Jackson, 2 Stark. 237. 
 
 20 Daniel on Negotiable Instruments, § 206; Crookshank v. Rose, 5 
 Car. & r. 19.
 
 BOOK II. 
 
 PARTIES TO THE INSTRUMENT. 
 
 CHAPTER YL 
 
 PERSONS QUALIFIED. 
 
 § 116. It was once th(juglit that none but merchants could 
 be parties to negotiable instruments, but this notion long 
 since became obsolete/ and it is now well settled that any 
 person laboring under no personal or political disability may 
 be a party to any negotiable contract. 
 
 We shall first speak of those who may be parties, and 
 then of those who are partially, or wholly disqualilied. 
 
 SECTIOX I. 
 
 FIDUCIARIES AS PARTIES. 
 
 § 117. Personal representatives — An administrator or 
 executor cannot bind the decedent's estate by any nego- 
 tiable instrument; he can only bind himself. If he make, 
 accept, or indorse a negotiable instrument he \\dll bind him- 
 self personally, even if he adds to his own name the desig- 
 nation of his office as personal rejjresentative. Thus, if he 
 signs himself " A. B., executor (or administrator) of C. D." 
 or "A. B., as executor of C D.," the representative terms 
 will be rejected as surplusage.^ And an accommodation in- 
 dorse!', or acceptor, who pays the amount of the instrument, 
 has no claim against the decedent's estate.^ But if the bill 
 or note of the personal re]>resentative be taken for a debt 
 
 1 Chitty on Bills [*15]. 20; Daniel on Negotiable Instruments, § 208. 
 
 2 King V. Thom, 1 T. R. 487: Gregory v. Leigh, 33 Tex. 813; Snead 
 V. Coleman, 7 Gratt. 300. 
 
 SKirkman v. Benham, 28 Ala. 501. 
 
 [73]
 
 74: PERSONS QIALI FIEI). §§ 118, 119. 
 
 of the decedent, the estate is diseharged from liability, and 
 the representative ah^ne is bound.'* 
 
 § 118. Personal representative individually bound. — Assets 
 in the hands of the personal representative constitute a 
 sufficient consideration for a promise to pay the decedent's 
 debt. lie is presumed to have sufficient assets, and hence 
 it is presumed that the obligation is based upon a sufficient 
 consideration.^ 
 
 As between the original parties, the presimiption is re- 
 buttable, and he may, therefore, show total or partial de- 
 ficiency or insufficiency of assets, and thus defeat liability 
 in toto or ju-o innto ; but in the hands of a "holder for 
 value," the better opinion is that the presumption of con- 
 sideration would be conclusive.*^ 
 
 But if he desires to exclude all personal liability, he can 
 do so by restricting his promise to pay " out of the assets 
 of C D.," or by the use of any other expression of similar 
 import.^ 
 
 § 119. Power to transfer. — If the instrument be payable 
 to the order of decedent, the personal representative may 
 transfer it by indorsement ; and if there be several executors 
 or administrators, the title may be transferred by the indorse- 
 ment of any one of them.^ AVhile it has been held other- 
 wise where the note was made payable to the several execu- 
 tors for a debt due the estate, the view sustained by the 
 weight of authoritv seems to recognize no such distinction.^ 
 
 4 Wisdom V. Becker, 52 111. 346; Cornthwaite v. First Nat. Bank, 57 
 Ind. 269. 
 
 sSnead v. Coleman, 7 Gratt. .303; Boyd v. Johnson, 14 S. W. 804. 
 
 *; Bank of Troy v. Topping, 13 Wend. 273; Rucker v. Wadlington, 5 
 J. J. Marsh. 238; Steele v. McDowell, 9 Smedes & M. 193; Byrd v. 
 Holloway, 6 Smedes & M. 199; Edwards on Bills, 78. 
 
 7 Snead v. Coleman, 7 Gratt. 303; Kirkman v. Benham, 28 Ala. 501. 
 
 sCahoun v. Moore, 11 Vt. 604; Mackay v. St. Mary's Church, 15 
 B. T. 121 ; Dwijrht v. Newell, 15 111. 333; Hertoll v. Bogert, 9 Paige, 52. 
 
 9 Smith V. Whiting, 9 Mass. 334; Bogert v. Ilcrtell, 4 Hill, 492; 1 
 Parsons on Notes and Bills, 155; Mackay v. St. Mary's Church, 15 R. I, 
 121.
 
 ^§120, ll'l. AGKNTS AS rAlMIKS, T."> 
 
 i^ 120. Guardians and tnistees. — Giuirdiuus cunnot bind 
 their wards' estutes, nor trustees the estates of their centals 
 que trustent by bills or notes; and hence, though they sign 
 themselves as guardians or trustees, they are personally 
 bound, because othenvise the instrimient wcjuld be invalid.'" 
 It is true that they may contract to pay out of an. estate; 
 but then the payment would l)e conditional on the sulTi- 
 ciency of the estate, and the instrument, therefore, not nego- 
 tiable." If a g-uardian take a note payable to his order as 
 guardian for the property of his ward, and indorse it to a 
 bona fide party for value, it has l)een held that it is a good 
 transfer, the words, " as guardian," etc., being mere de- 
 scriptio personce}^ But the better opinion seems to be that 
 while if the fiduciary, indicated as payee, may transfer a 
 good title, proWded he nuikes the transfer within the au- 
 thority of and for the benefit of his trust, yet that such 
 words as trustee, etc., suffixed to a payee's name put his 
 indorsee upon inquiry as to the title, and if the transfer be 
 in fraud of the trust, the indorsee must suffer the conse- 
 quence.^^ 
 
 SECTION^ II. 
 
 AGENTS AS PARTIES. 
 
 § 121. All persons who are themselves competent to be- 
 come parties to a negotiable contract, in their own individual 
 right, can do so through the instrumentality of an agent. 
 
 Three things are essential to the creation of an obligation 
 on tlie part of one individual by and through the act of 
 another, viz.: (1) The principal himself must be competent; 
 (2) the agent must be competent to act as such; {?>) author- 
 ity, express or implied, verlial or in wi-iting, must be con- 
 ferred by the priuci])al u]^on the agent. 
 
 10 Thatcher v. Dinsniore, ."j Mass. 200; Webstor v. Switzer, 15 Mo. 
 App. 351; Conner v. Clark. 12 Cal. IfiS. 
 
 n 1 Parsons on Notes and Bills. i)0: 8tory on Bills. §§ 74, 75. 
 
 laZellner v. Cleveland. 09 C,a. 03.3; Thornton v. Rankin. 10 Mo. 103. 
 
 1^ Third Nat. Bank v. Lange, 51 .Md. 138: Shaw v. Spencer, 100 Mass. 
 382.
 
 76 PERSOXS (ilALIFIKT). §!--• 
 
 Enono'h has been alvoadv said Avitli reference to the ca- 
 paeity of the priiu'ii)al, and no fnrther ehiboration on, that 
 subject is deemed neeessarv. But, referring to the com- 
 petency of the agent, it should be observed that it is not 
 necessary that the agent shoukl be himself competent to 
 make a contract. He is the mere instniment of the con- 
 tracting capacity and will, and Mr. Chitty says: "As this 
 agency is a mere ministerial office, infants, feme coverts, 
 persons attainted, outlawed, excommunicated, aliens and 
 others, though incapable of contracting on their o^vii ac- 
 count, so as to bind themselves, may be agents for these 
 
 >J 14 
 
 purposes. 
 
 During the existence of slavery in the United States it 
 was held that a slave might be an agent.^^ But imbeciles, 
 lunatics, and children of tender years, who actually lack 
 capacity to be intelligent instruments, and have not the 
 power or discretion to consent, could hardly be regarded 
 as competent to be even the agents of another.^'' 
 
 § 122. Express authority. — It is not necessary that ex- 
 press authority should be granted in any particular form, 
 unless it be authority to execute an instrument under seal, 
 in which case it also must be under seal. Other^vise the 
 authority may be written, or oral; and the agent, to exe- 
 cute or indorse a negotiable instrument, needs nothing more 
 than verbal authority so to do,^' though it was once thought 
 that a formal power of attorney w^as necessary.^^ It is 
 obvious, however, that it is safer for one, dealing with an 
 alleged agent, to require production of written authonty; 
 or otherwise unmistakable oral proof that authority had 
 been given. If the authority is in writing, it cannot be 
 disputed l)y ])ai'ol proof of contrary verbal instructions to 
 
 14 Chitty on IJills [*28], .3(5. See Edwards on Bills, 95; Coke's Little- 
 ton, 52o. 
 
 15 Governor v. Daily, 14 Ala. 469. 
 i« Thompson on Bills, 147. 
 
 17 Chitty on Bills [•■•2S], .%: Bettis v. Bristol, .50 Town, 41. 
 
 18 Mann v. Kin^, :Munf. 428.
 
 §§123,124. AGENTS AS PARTIES. i7 
 
 the agent, or otkcnnsc;^'' besides, it proves itsolf wlienever 
 produced, and its goiniineness is established. 
 
 § 123. Authority " by procuration." — While it is true, as 
 stated in all text-books on the general subject of contract 
 law, that there are some positions of agency in wliich, in 
 the usual course of business, the agent may draw, indorse, 
 or accept negotiable instruments, although positively against 
 the principal's instnictions, — /. c, general agents, acting 
 within the general scope of their authority — the principle, 
 however, is subject to this limitation, tliat whenever an 
 authority puqiorts to be derived from a written instrument, 
 or the agent sigiis the paper with the words " by procura- 
 tion," in such a case the party dealing with liim is l)ouud 
 to take notice that there is a written instrument of procura- 
 tion, and he ought to call for and examine the instrument 
 itself to see whether it justifies the act of the agent. Under 
 such circumstances, he is chargeable with inquiry as to the 
 extent of the agent's authority; and if, without examining 
 into it v/hen he knows of its existence — and especially if he 
 has it in his possession — he ventures to deal with the agent, 
 he acts at his peril, and must bear the loss if the agent tran- 
 scended his authority.-** But no such duty exists to make 
 inquiry respecting private instnictions to the agent from his 
 principal, whether written or oral, for they may well be pre- 
 sumed to be of a secret and confidential nature.^^ 
 
 § 124. Implied authority from express authority. — From 
 the express authonzation by the in-incipal, the law will im- 
 ply such additional power and authority as may be abso- 
 lutely necessary to efl"ectuate the intention of the principal 
 and to fully execute that which is expressed. Thus, when 
 the authority to execute or indorse a negotiable instrument 
 is sought to be deduced from an agency to do certain other 
 acts it must be made to appear afilrmatively that the sign- 
 ing or indorsement of such an instrument was within the 
 
 19 Thompson on Bills, 147. 14S. 
 
 SUStainback v. Rank of Viri.Mnia, 11 Cratt. Q.lft : Xorth Kiver Bank 
 V. Aymar. .3 Hill. 202. 
 
 21 North River Bank v. Aymar, 3 Hill, 262; Story on Agency, § 73.
 
 78 TERSONS QUALIFIED. § 125. 
 
 general objects and ])urposes of -the authority which was. 
 actually confeiTed. And in interpreting the authority of 
 the agent, it is to be strictly constiiied.^^ Thus a general 
 authority to transact business for the principal, will not au- 
 thorize the agent to bind him as a party to negotiable pa- 
 per, according to many authorities, and the general principles 
 of the laAV of agency.^" It has been held that authority to 
 transact all business for the principal, would empower the 
 agent to transfer a negotiable instrument in his principal's 
 name;-^ but the weight of authority is to the contrary.^ 
 Authority to conduct, in one's place and stead, his commer- 
 cial business, and sign the principal's name whenever re- 
 quisite or expedient in the attorney's good discretion, would, 
 however, be broad enough to cover cases of drawing bills 
 of exchange,^^ and so likewise authority to act " as lawful 
 cashier and financial agent." "^ 
 
 § 125. Authority implied from custom. — If the principal 
 stand by and tacitly concur in the act of the agent signing 
 his name, he would be as strictly bound as if he had ex- 
 pressly authorized the agent so to do. So, authority may be 
 implied from the course of business and employment, or 
 from repeated recognitions by the principal of the agent's 
 authority.^ Thus, where a drawee had previously paid sev- 
 eral bills accepted in his name by a third person, with whom 
 he had connections in trade, he would be liable to an in- 
 dorsee, although the bill accepted in like manner had been 
 so accepted without his authority.^" And it has been held 
 that if a person usually subscribes a negotiable instrument 
 with the name of another, proof of his having done so in 
 
 22Byles on Bills [*32], 108; Sewanee Mining Co. v. McCall, 3 Head, 
 619. 
 
 23Sewanee Mining Co. v. :\rcCall, 3 Head, (Hi); Chitty en Billa [*29, 
 30], 39. 
 
 24 Bailey v. Rawley, 1 Swan, 205; Frost v. Wood, 2 Conn. 23. 
 
 25Kilgour V. Finlayson, 1 H. Bl. 155; Hay v. Goldsmidt, 2 J. P. 
 Smith, 79. 
 
 2ii Dollfus V. Frosch, 1 Den. 3G8. 
 
 27 Edwards v. Thomas, 66 Mo. 482. 
 
 28 Lake Shore Nat. Bank v. Colliery Co., 58 N. Y. Supp. 63. 
 
 20 Barber v. Gingell, 3 Esp. 61; Stroh v. Hinchman, 37 Mich. 490,
 
 §§ 12(>, 127. AGENTS AS I'AKTIES. 7*J 
 
 many instances is suiiicicnL lo fliai-<^L- ihc parly whose name 
 is subscribed, without producing any power of attorney or 
 other proof of agency.^ But when it is sought to bind 
 the principal on tho ground of i)rior sindlar transactions, 
 or recognition of such acts by the principal, it must ho 
 shown that the bill or note was taken upon the faith of 
 them.^^ 
 
 § 126. How agent should sign. — Tho hest mode for an 
 agent to sign or indorse a negotiable instiiuncnt for his 
 principal, so that it may clearly appear that he is " the mere 
 scribo " who applies the executive hand as the instrument 
 of another, is as follows: ''A. B., by his attorney or agent, 
 C. D.; " or, " A. B., by C. D., agent; " or, " C. D., for A. 
 B.; " or, " O. D., agent for A. B." ^^ 
 
 But it is competent and proper also for the agent to sign 
 simply tho principal's name, and to show his authority to 
 do so by extraneous evidence ;^^ for, as said by the United 
 States Supreme Court, per Johnson, J. : '' It is by no means 
 true that the acts of agents derive their validity from pro- 
 fessing on the face of them to have been done in the exer- 
 cise of their agency." ^* But this style is not favored, as 
 it increases the difficulties of proof, and at one time was 
 questioned.^^ 
 
 § 127. Undisclosed principal. — It is a general principle of 
 commercial law that a negotiable instrument must wear no 
 mask, but must reveal its character upon its face. xVnd it 
 extends to the liability of parties thereto, who must appear 
 as distinctly as tho tenns of the instrument itself, in order 
 to bo bound thereby. It follows, therefore, that no party 
 
 aoNeal V. Irving, 1 Esp. 61; Haughton v. Ewbank, 4 Caiiipb. 188. 
 
 •■Jl St. John V. Redmond, 9 Port. 428 ; Edwards on Bills, S'J. 
 
 aa Bradlce v. Boston Glass Co., 46 Pick. 347 : Weaver v. Carnall. 35 
 Ark. 19S; 1 Parsons on Notes and Bills, 91; Tannant v. Rocky 
 Mountain Nat. Bank, 1 Colo. 278. 
 
 33 Odd Fellows v. First Nat. Bank. 42 Midi. 4(J3 ; First Nat. Bank v. 
 
 Gay, G3 Mo. 33. 
 
 34 Mechanics' Bank v. Bank of Columbia. 5 Wheat. 326. 
 
 35 1 Parsons on Notes and Bills. 91. 92.
 
 80 PEESOXS QUALIFIED. § 128. 
 
 can be charged as principal upon a negotiable instrument 
 unless his name is disclosed thereon. The reason of this 
 rule is that each party who takes a^ negotiable instrument 
 makes liis contracts ^^•ith the parties who appear on its face 
 to be bound for its payment; it is "a courier without lug- 
 gage," whose countenance is its passport; and in suits upon 
 negotiable instruments, no evidence is admissible to charge 
 any person as a principal party thereto, unless his name in 
 some way is disclosed upon the instrument itself;^'' although 
 upon other written contracts, not negotiable, it is often com- 
 petent to show that, although sigiied in the name of the 
 agent only, they were executed in the business of the prin- 
 cipal, and with the intent that he should be bound. And 
 in such cases he is bound upon them accordingly.^^ The 
 rule excluding parol evidence to charge an unnamed prin- 
 cipal as a party to negotiable paper is derived from the na- 
 ture of such paper, which being made for the purpose of 
 being transferred from hand to hand, and of giving to every 
 successive holder as strong a claim upon the original party 
 as the payee himself has, must indicate on its face who is 
 bound for its payment; for any additional liability not ex- 
 pressed in the paper would not be negotiable. ^^ 
 
 § 128. When ag^ent individually bound. — If the agent sign 
 a note with his own name, and cUscloses no principal, he is 
 personally bound. The party so signing must have intended 
 to bind somebody upon the instnnnent, and no promisor 
 but himself thereon appearing, it must be construed as his 
 note or as a nullity.^^ And though he tenn himself '* agent," 
 such suffix to his name will be regarded as a mere descriptio 
 persona', or as an eannark of the transaction, and may be 
 rejected as surj^lusage.^ 
 
 SOCragin v. Lovcll. 109 U. S. 194; Texas Latid Co. v. Carroll, 63 Tex. 
 51; Brown v. Baker, 7 Allen, 339. 
 
 37 Lerned v. Johns, 9 Allen, 419; Leavens v. Thompson, 55 N. Y. 
 Supp. 391. 
 
 38 Webster v. Wray, 19 Nebr. 558; Heaton v. Myers, 4 Colo. 62. 
 
 39 Arnold v. Stackpole, 11 Mass. 27; Sharpe v. Bellis, Gl Ba. St. 71; 
 Finan v. Babcock, 58 Mich. 305. 
 
 40 Toledo Iron & Agr. Works v. Heisser, 51 Mo. 128; Arnold v. 
 Sprague, 34 Vt. 409.
 
 §§ 120, 130. AGKNTS AS I'AKTIES. SI 
 
 If the agent exceed his a\itliority iu signing his principal's 
 name, or sign his own professedly as binding his principal, 
 who is named, he is not bound as a party to the paper itself, 
 but only in an acti..u of tort for falsely assuming authority 
 to bind another. Upon this proposition the authorities aro 
 not uniform, but ihc weight of reason, if not authority, is 
 clearly in its favor, both in England and in the United 
 States.-*^ 
 
 § 129. Ratification. — A corporation, as well as an indi- 
 vidual, may ratify the acts of another, when such acts are 
 done and performed iu the name of the alleged principal; 
 and the ratification may be by express consent, or by con- 
 duct of the alleged principal inconsistent with any other 
 hypothesis than that he approved and intended to adopt 
 what had been done in his name. Intelligent acquiescence 
 amounts to a binding ratification.^" 
 
 Three things are essential to a ratification: (1) The party 
 must have capacity to have made the contract in the par- 
 ticular mode adopted; (2) the principal must have known all 
 of the facts attending the transaction; (3) the contract must 
 have been originally lawful."*^ 
 
 § 130. Revocation of agency. — xV general authority to an 
 agent is presumed to continue until its revocation is gener- 
 ally kno^nl. And if A. is the agent of B. to draw bills in 
 his name, B. will be liable as drawer to ignorant indorsees, 
 Avho had no knowdedge of the change in the relationship 
 of the parties, or of the revocation of the agency."*"* 
 
 Death or insanity operates as a revocation of all agencies 
 not coupled with an interest vested in the agent ;'''^ but war be- 
 tween the countries of the principal and the agent does not.'**' 
 
 41 Daniel on Negotiable Instrumonts. § 300. and cases cited. 
 
 •12 Knox County v. Aspinwall. 21 llow. 544; Supervisor3 v. Sehenck, 
 5 Wall. 782; Bissell v. Jeffersonville, 24 How. 299; Daniel on Nego- 
 tiable Instruments, § 317. 
 
 « Daniel on Negotiable Instruments, §§ 318-320. 
 
 44Chitty on Bills f*32]. 42; Story on Agency, §§ 470, 473; Smith v. 
 Stranger, Peake Add. 1 16. 
 
 4.1 1 Parsons on Contracts, 71. 
 
 4« Daniel on Negotiable Instruments, § 222. 
 
 G
 
 82 PERSONS QUALIFIED. §§ 131, 132. 
 
 § 131. Banks as collecting agents — For the convenience 
 of the mercantile world banks are frequently made the col- 
 lecting agents for the owners or holders of commercial pa- 
 per. Bnt the mere fact that a bill or note is made payable 
 at a baidv does not of itself confer any agency upon the 
 bank, on the part of the payee, to receive the amount. In 
 order to make the bank the payee's agent to receive the 
 money, the paper must be indorsed to, or lodged mth, it, for 
 collection, or it must have received authority from the payee 
 to collect the amount due;^^ and Avithout such circumstances 
 or such authority any amount which the bank receives to 
 apply in payment, it ^Wll be deemed to have taken as the 
 agent of the payor.^^ 
 
 ^ 132. Duty of collecting agent to present for acceptance 
 and for payment. — It is the duty of the bank, as soon as 
 the bill, note, or check is placed in its hands for collection, 
 to take the appropriate steps necessary to its prompt pay- 
 ment or prompt acceptance, by making presentment for ac- 
 ceptance without delay, and presentment for payment at 
 maturity. And if the instrument be not duly accepted or 
 paid, the bank must take all necessary steps to fix the lia- 
 bility of the drawer, if it be a foreign bill, by placing it in 
 the hands of a notaiy for protest, and by giving due notice 
 of its dishonor to the party who indorsed the instrument 
 to it for collection, whether it be a bill or note, inland or 
 foreign. If the bank fail in any of these duties, it becomes 
 immediately liable in damages to the holder.^^ Assuming 
 that the collecting bank properly and promptly discharges 
 its duty as to presentment for acceptance and for payment, 
 it is not bound to pay the amount of a bill, note, or check 
 placed in its hands for collection to the holder, until such 
 amount is received, or would be received but for the default 
 of itself or some agent for whose act it is responsible.^*^ It 
 
 47 Caldwell v. Evans, .5 Bush, 380: Balme v. Wambaugh, 16 Minn. 
 120; Glatt v. Fortman, 120 Ind. 385. 
 
 48 Ward V. Smith, 7 Wall. 447; Pease v. Warren. 29 Mich. 9. 
 
 49 Allen V. Merchants' Bank. 22 Wend. 215; Smedes v. Bank of Utica, 
 20 Johns. 372; Blanc v. Mutual Nat. Bank. 28 La. Ann. 921. 
 
 oOBriggs V. Cent. Nat. Bank, 89 N. Y. 184.
 
 §§ 133, 134. I'AKTXEKS AS J'AUTIES. 83 
 
 is freciuently the case that for the accommodation of cus- 
 tomers they are permitted to draw before, and in antici- 
 pation of, the reception of such amounts. But this habit 
 is mere favor, and, though long continued, gives the cus- 
 tomer no right to demand that it be done in any particular 
 case." 
 
 § 133. Ownership of paper in hands of collecting bank. — 
 A variety of circumstances give rise to controversies as to 
 the right to claim paper, or the proceeds of paper, which 
 was put iu bank to be collected. 
 
 AVlien the holder places his paper in bank, he usually 
 does so in one of three ways: First. As a principal em- 
 ploying the bank as a mere agent for collection, in Avhich 
 case the restrictive indorsement " for collection '' is, or 
 should always be, used, so that all subsequent holders may 
 be advised of the bank's want of title. This is the form of 
 indorsement generally used when the holder is not a cus- 
 tomer of the bank. Second. As an avowed seller to the 
 bank, in which case the indorsement is in blank and the 
 transaction a plain one. Third. As a customer having an 
 account with the bank, in which case the restrictive indorse- 
 ment is or is not employed, according to the relations estab- 
 lished by agreement between the parties. If the bank treats 
 tho paper as a cash deposit, and allows the customer to 
 draw against it in anticipation of the collection, the indorse- 
 ment is generally in blank.^^ 
 
 SECTIOX III. 
 
 TARTNERS AS PARTIES. , 
 
 § 134. General authority of partner to bind firm. — The 
 general authority of a partner to bind the linn springs from 
 tho mutual agency of the copartners for each other; and 
 from the course and usage of the business in which they are 
 engaged. It follows, therefore, that a person contemplating 
 partnershi]-* with another cannot, Arithout a special author- 
 
 Bi Scott V. Ocean Bank. 2^ X. Y. 289: Mnrso on Banking. 365. 
 52 Daniel on Negotiable Instruments, § 340a.
 
 84: PERSONS QUALIFIED. §§ 135, 136. 
 
 ity. l)ind him by a contract for the proposed partnership 
 benefit — • for example, for the pni-pose of raising capital — 
 his agency not commencing nntil the connection is consum- 
 mated/''^ The copartnership being formed, the copartner 
 can bind his associates only in such transactions as pertani to 
 their partnership business; and the copartnership business 
 must be of such a character that the giving of negotiable 
 paper would be the convenient and proper mode of conduct- 
 ing it, in order to create the presumption of agency in a 
 copartner to give a bill or note in the firm's name. 
 
 § 135. Implied authority of partner to bind the firm. — It 
 results from the very nature of partnership ■ — from the 
 very fact that the copartners are mutual general agents for 
 each other in their copartnership affairs — that the express 
 assent of one to the act of another within the scope of their 
 business is unnecessary. The authority to each partner is 
 implied to bind the firm Tvdthin the legitimate scope of its 
 business by the very fact that it is a firm, and it has been 
 said by Lord Ellenborough, C. J.: " It would be a strange 
 and novel doctrine to hold it necessary for a person receiv- 
 ing a bill of exchange indorsed by one of several partners, 
 to know whether the others assented to such indorsement 
 or that it should be void." ^* 
 
 § 136. Trading partnerships. — The borrowing of money 
 and negotiation of bills and notes being incidental to, and 
 usual in, the business of copartnerships fonned for the pur- 
 pose of trade, it follows that when a copartner bon-ows 
 money professedly for the firm, and executes therefor a 
 negotiable instrument in the copartnership name, it will 
 bind all the partners, whether the borrowing were really 
 for the firm or not, and whether he diverts and misapplies 
 the funds or not, provided the lender is not liimself cogni- 
 zant of the intended fraud. And the burden will not be 
 
 53 Bank of Fort Madison v. Alden, 129 U. S. 373; Greensdale v. 
 Domer, 7 B. & C. G35. 
 
 54 Swan V. Steele, 7 East, 210; Fulton v. Louglilin, 118 Ind. 286.
 
 § 137. PARTXEUS AS I-AUTIKS. 85 
 
 thr()\\ni ftii liim t<> s1k)w that lie was not ('Ognizant of such 
 fraud, or to pi-oNc \'alu(' ^ivou f(jr tlu; })aper.^"' 
 
 g 137. Nontrading partnerships. — In general, it may be 
 said that it ihc partnership be a lu^ntrading one, there i.s 
 no implied a<;ency or authority in one partner to sign the 
 lirni name, and thus bind the partnership, without express 
 authority from all iIk; members thereof. Hence, the United 
 States Supreme Court has held that a bill <ll•a^\^l by a part- 
 ner ill the name of a firm engaged in farming, working a 
 steam sawmill, and in trading, was binding, because trad- 
 ing and running the juill required capital and the use of 
 credit; but if the finii had been engaged in farming alone, 
 no one partner could have bound it by a bill or note.^ A 
 firm engaged in manufacturing lumber from logs, has been 
 considered noncommercial, and that one of the partners 
 could not bind the other bv a note." So, also, one engaged 
 in the real estate and collecting business ;^^ so, also, one 
 dealing as coffee-brokers, in the absence of custom or usage 
 to the contrary.^^ Upon these principles one of a law firm 
 cannot bind it by a promissory note without consent of all the 
 members;''" nor can one of a firm practicing medicine bind it 
 in a like manner except for medicine and other necessaries 
 of his prof ession ;^^ nor can one of a firm keeping a tavern 
 bind his copartners except strictly within the business.^^ It 
 is said, however, that if the concerns were of such vast mag- 
 nitude as to require large capital and credit, the rule would 
 be of doubtful ajijdication, and that it would depend very 
 much upon the usage of the particular finii and others simi- 
 Inrly engaged.^'^ The ge neral authority of a partner to bind 
 
 •"'•''• Hayward v. French, 12 Cray, 4.5.3; United States Bank v. Bonney, 
 5 Mason, 17G; Spaulding v. Kelley, 50 N. Y. Supp. 244. 
 
 5«Kimbro v. Bullit, 22 How. 2.5G. 
 
 57 National State Capital Bank v. Xoyes, 62 X. H. 44. 
 
 T'S Deardorff v. Thacher, 78 Mo. 128. 
 
 r-OTliird Nat. Bank v. Snyder, 10 Mo. App. 211. 
 
 «OHedley v. Bainbridge, 3 Q. B. Slfi; Marsh v. Cold. 2 Pick. 285. 
 
 eiCrosthwait v. Ross, 1 Humphr. 23; Edwards on Bills, 102. 
 
 OS Cooke V. Branch Bank, 3 Ala. No. 
 
 «3 1 Parsons on Notes and Bill*. 13!); National State Cap. Bank v. 
 Noyes, G2 N. H. 44.
 
 8G PERSONS QUALIFIED, §§ 138, 139. 
 
 the finn exists only by implication, and may be rebutted by 
 evidence that the party who took the security had pre^dol^s 
 notice that no such authority existed.*^ 
 
 § 138. As to accommodation paper. — No one member of a 
 firm can bind it, ^\dthout the consent of all of its members, 
 by signing the copartnership name as drawer, maker, ac- 
 ceptor, or indorser of a negotiable paper for his private 
 accommodation or for the accoimnodation of a third party, 
 for the obvious reason that such a transaction is not within 
 the scope of copartnership business, unless expressly or im- 
 pliedly made so, and would ordinarily be mthout authority, 
 and in fraud of the firm. And every holder of such paper, 
 chargeable ^rith notice of its character, would be disqualified 
 to recover upon it;^^ and if the plaintiff be payee, he would 
 be required to prove the assent of the copartners before he 
 could do so.*^ 
 
 If it appears on the face of the bill or note that it was 
 signed by a partner, in the name of the firm, as surety, this 
 will be notice to the world that it was not given in due 
 course of the partnership business; and the burden would 
 be thrown upon the holder not only to show that he gave 
 value for the instrument, but also that all the parties as- 
 sented to its execution in their name.^ If the word " surety " 
 be attached to the partnership name, that would impress 
 upon the paper notice of its character.*^ 
 
 § 139. As to private debts of a member of the firm. — ]^o 
 one member of a finn can, without the consent of all of 
 his copartners, bind them by making, drawing, accepting, or 
 indorsing a bill, note, or check for his private debt, in the 
 partnership name; and the creditor who receives such an 
 instrument, or the indorsee who takes it with notice of the 
 consideration, cannot recover upon it.^^ Accordingly, it has 
 
 f;4Gallway v. Matthews, 10 East, 264; King v. Faber, 22 Pa. St. 21. 
 C5 Bank of Fort Madison v. Alden, 129 U. S. 372 ; HeflFron v. Hana- 
 ford, 40 Mich. 405. 
 
 6« Tompkins v. Woodward, ^ W. Va. 2.30. 
 
 67 National Bank v. Law, 127 Mass. 72; Tyree v. Lyon, 07 Ala. 1. 
 
 68 Foot V. Sabin, 19 Johns. 154; Boyd v. Plumb, 7 Wend. 309. 
 
 69 Daniel on Negotiable Instruments, § 366.
 
 §§ 140, 141. PARTNEKS AS PARTIES. 87 
 
 been held that where u crediLor drew on his debtor through 
 l)ank for an individual debt, and the debtor gave the check 
 oi the finn to which he belonged in payment, the creditor 
 was held chargeable mth notice of the misappropriation by 
 the very nature of the transaction, and through the bank 
 as his agent."^^ But in Nebraska a different conclusion has 
 been reached.^^ 
 
 § 140. Effect of dissolution. — The dissolution of a partner- 
 ship may occur by agreement between the partners; by a 
 change in the mcmbersliip of the firm, by the retirement of 
 one or more of the partners; and by operation of law. The 
 death or bankruptcy of a partner are the most familiar in- 
 stances of dissolution by operation of law, and as a general 
 rule it is well settled that in those cases no notice is neces- 
 sary to exonerate the estate of the deceased or bankrupt 
 partner from liability for future acts done by other mem- 
 bers in the name of the dissolved firm."^" Nor is notice 
 necessary when a dormant partner retires, for he has not 
 been held out as a member of the firm."^* But when dis- 
 solution occurs by agreement between the partners, or by 
 retirement of one or more of them, notice of dissolution 
 is necessary to avoid liability for future transactions in the 
 finn name. And the general principles stated may be af- 
 fected by peculiar circumstances. Thus, if a dormant part- 
 ner is known to certain individuals to have been a partner 
 he must notify them of his retirement, to avoid future lia- 
 bility for acts of the firm."^^ And continuing members wall 
 be bound by the acts of a bankrupt partner in the firm's 
 name if they hold themselves out as still in partnership 
 with him.'^^ 
 
 ^141. Dissolution by agreement, or by death; compared. — 
 AVhen the dissolution has been effected by retirement or 
 
 vo Davis V. Smith, 27 Minn. 390. 
 71 Warren v. Martin, 24 Nebr. 273. 
 
 T2 Dickinson v. Diel^inson, 25 Gratt. 321; Williams v. Mathews, 14 
 La. Ann. 11. 
 
 73 Carter v. W'halley, 1 B. & Ad. 11. 
 
 74 Davis V. Allen. 3 N. Y. 108; Cregler v. Durham, 9 Ind. 375. 
 7r. Lacy v. Woolcot, 2 Dowl. & R. 438.
 
 88 PERSONS QUALIFIED. § 142- 
 
 agreement, one ex-partner lias no implied antliority to in- 
 dorse in the partnership name negotiable instnunents given 
 to the firm before dissolution. As was said by Lord Kenyon^ 
 " the moment the partnership ceases, the partners become 
 distinct persons; they are tenants in common of the partner- 
 ship property undisposed of from that period; and if they 
 send any securities which did beh^ng to the partnership into 
 the world after such dissolution, all must join in so doing." '^ 
 But where the dissolution is by the death of one of the- 
 partners, the sur\Tivor may indorse a note, payable to the 
 fiiin in his ovm name.'^" The reason of the distinction be- 
 tween the authonty of a partner after dissolution while 
 his copartner is living, and the authority of the sundvor 
 when dissolution has been caused by death, is that in the 
 former case the implied authority for one partner to act is 
 all gone; whereas in the latter case the bill or note vests 
 exclusively in the survivor, although he must account there- 
 for aa part of the partnership assets.^^ And for the like 
 reason the surviving partner may draw a check on partner- 
 ship funds to pay a firm debt.^^ 
 
 SECTIOIs^ IV. 
 
 COEPORATIONS AS PARTIES. 
 
 § 142. Public and private corporations. — Corporations are 
 either private or public — public when " the whole interests 
 and franchises are the exclusive property and domain of the 
 government itself;." otherwise private. Public corporations 
 are established exclusively for public purposes, and com- 
 prise cities, towms, villages, counties, to-svnships, parishes, 
 and all other coi-porations erected by the government as 
 governmental agencies. Private corporations comprise 
 banks, building associations, railroad companies, and all other 
 
 76 Abel V. Sutton, 3 Esp. 109. 
 
 77 .Johnson v. Berlizheimer, 84 111. .54. 
 
 78 Story on Notes, § 12.5; Crawshay v. Collins, 15 Ves. 218. 
 
 79 Commorfial Xat. Bank v. Proctor, 98 111. 558 ; Daniel on Nego- 
 tiable instruments, §§ 370a, 3706.
 
 §§ 143, 144. coKroKATioxs as parties. 89 
 
 associations formed for manufacturing, trading, or other 
 objects of private gain, cnudument, gratification, or benefit."" 
 
 § 143. Authority of private corporations. — It is quite easy 
 to determine whether or not there is express power in toti- 
 deiii verbis to issue the particular instrument by consulting 
 the terms of the corporate charter. If not expressed, then 
 the incpiiry arises, is the power implied in some power con- 
 ferred, or from the general character of the institution? 
 In England the rule is well established that trading and 
 banking corporations only can draw or accept bills of ex- 
 change, or otherwise become parties to a negotiable contract, 
 without express authority to do so — the principle being 
 that such acts by trading and banking corporations are 
 necessary to the very objects of their existence.*^ 
 
 In the United States, however, the cases go to great 
 lengths in upholding the validity of coq^orate negotiable 
 instruments. Here " the power of corporations to become 
 parties to bills of exchange or promissory notes is coexten- 
 sive M^ith their power to contract debts, "\\nienever a cor- 
 poration is authorized to contract a debt it may draw a bill 
 or give a note in payment of it. Every coqwration, there- 
 fore, may become a party to bills or notes for some pur- 
 poses. Thus, a mere religious corporation may need fuel 
 for its rooms, and as an economical measure may buy a cargo 
 of coal, and give its note for it; and such a note would un- 
 doubtedly be valid in this country." ^^ 
 
 § 144. The American doctrine stated. — In this country 
 three propositions respecting private corporations may be 
 regarded as settled. First. That it has implied power to 
 contract debts like an individual whenever necessary or con- 
 venient in furtherance of its legitimate objects. Second. 
 That whenever it may contract a debt, it may bon-ow money 
 to pay it. And, Third. That whenever it contracts a debt 
 for materials, services, or otherwise, in the scope of its busi- 
 
 80 Daniel on Negotiable Instruments, § 379. 
 
 81 Bioughton V. ^Manchester & S. Waterworks, 3 B. & Aid. 1. 
 
 S2 1 Parsons on Notes and Bills, 1G4, 165; Daniel on Negotiable In- 
 struments, §§ 380, 381.
 
 00 PERSONS QUALIFIED. § 145. 
 
 ness, or borrows money, it may execute a negotiable bill, 
 note, or bond, and secure it by mortgage, to the creditor in 
 payment. ^^ 
 
 And in accordance with the propositions just announced, 
 it was said, in a well-considered case, that "■ the right of cor- 
 porations in general to give a note, bond, or other engage- 
 ment to pay a debt is so nearly identical or so inseparably 
 connected "vnth the right to contract the debt, that no doubt 
 upon the question ought to be admitted. When a corpora- 
 tion can laT\^ully purchase property, or procure money on 
 loan in the course of its business, the seller or the lender 
 may exact, and the purchaser or borrower must have, the 
 power to give any known assurance which does not fall 
 v/itliin the prohibition, express or implied, of some statute. 
 The particular restriction must be sought for in the charter 
 of the corporation, or in some other statute binding upon 
 it; but if not found in that examination, Ave may safely 
 affimi that it has no existence." ^ 
 
 § 145. Presumption of regularity. — Wlien a corporation 
 has a general power, express or implied, to be a party to 
 negotiable contracts, such instruments will be presumed to 
 have been executed in the legitimate course of its business, 
 and whether so executed or not mil be valid in the hands 
 of a bona fide holder Avithout notice.^^ Unless the corpora- 
 tion be specially authorized to do so, the execution or in- 
 dorsement of accommodation paper for the benefit of a 
 third person is an act beyond the scope of its corporate au- 
 thority;*^ but according to the principles stated, a hona fide 
 holder taking without notice of its character could enforce 
 it.**^ Its indorsement on the paper is presumably valid, and 
 it cannot be inferred in the absence of proof that it was 
 
 83 Daniel on Xegotiable Instruments, >§ 382, and cases cited. 
 . 84 Curtis V. Leavitt, 15 N. Y. 66. 
 
 85 Supervisors v. Schenek, 5 Wall. 784; Mitchell v. Railroad Co., 17 
 Ga. 574. 
 
 80 Field on Corporations, 306. 
 
 87 Bird V. Daggett, 97 Mass. 494; National Bank v. Wells, 79 N. Y. 
 498.
 
 § 146. COUPOR^VTIONS AS PARTIES. 91 
 
 for accommodation.**^ Where a railroad company transferred 
 and guaranteed bonds of another, itself receiving the pro- 
 ceeds, it was held estopped to deny its liability upon the 
 
 guaranty.***^ 
 
 §146. Authority of agent of corporation. — It wa.s the 
 ancient doctrine of the common law that a corporation could 
 not express its assent, and therefore could not constitute 
 an officer or agent, save by instrument under seal."*^ This 
 doctrine is now completely obsolete in the United States, 
 and here there is no doubt that such a body may, by mere 
 vote, or other appropriate corjwrate act not under seal, ap- 
 point an officer or agent whoso acts and contracts within 
 the scope of his authority would bind the corporation.*^ 
 And if a corporation employ a person to discharge official 
 duties — such as a bank, which places a person behind its 
 counter to exercise the duties of cashier — it will be bound 
 by his acts although the fonnalities of qualification have not 
 been complied with, unless the statute creating the corpora- 
 tion provides that his acts shall be void until such fonnali- 
 ties be performed."^ Indeed, the doctrine is well settled that 
 if officers of a coq^oration openly exercise a power which 
 presupposes a delegated authority for the purjiose, and 
 other corjjorate acts show that the coi-poration must have 
 contemplated the legal existence of such authority, the acts 
 of such officers will be deemed rightful, and the delegated 
 authority will be presumed. If a person acts notoriously as 
 cashier of a bank, and is recognized by the directors, or by 
 the corporation, as an existing officer, a regular appointment 
 will be presumed, and his acts as cashier wall bind the cor- 
 poration, although no written proof is or can be adduced of 
 his appointment. In short, the acts of artificial persons 
 afford the same presumptions as the acts of natural persons. 
 
 88 Lafayette Bank v. St. Louis Stoneware Co., 2 Mo. App. 299. 
 
 89 Arnot V. Erie R. Co., 5 Hun, COS. 
 
 00 AnfToll & Ames on Corporations, chap. IX, § 3. p. 214. 
 91 Bank of Columbia v. Patterson's Admr., 7 Cranch, 305; Fleckncr 
 , United States Bank, S Wheat. 387. 
 93 Bank of the United States v. Dandridge, 12 ^^^^eat. 83.
 
 92 I'ERSONS QUALIFIED. §§ 147, li8. 
 
 Each affords presumptions, from acts done, of Avliat must 
 have preceded them, as matters of right or matters of duty.^^ 
 
 § 147. Municipal corporations. — There is no doubt that 
 pubHc coii)orations may have the power conferred on them 
 to execute bills, notes, checks, and indeed all varieties of 
 negotiable instruments. But the better opinion is, that such 
 power does not exist, unless expressed or clearly implied.^^ 
 The ordinary orders, warrants, certificates of indebtedness, 
 and obligations to pay issued by municipal coi-porations, if 
 negotiable in fonn, Anil in general enable the holder to sue 
 in his o^\^l name. But they are not negotiable instruments 
 so as to exclude inquiry into the legality of their issue, or 
 preclude defenses which are available as against the original 
 payees.^^ To invest such instruments with the character and 
 incidents of conunercial paper, so as to render them in the 
 hands of hotia fide holders absolute obligations to pay, how- 
 ever irregularly or fraudulently issued, would be an abuse of 
 their true character and purpose.^ 
 
 § 148. Difference between public and private corporations. — 
 If private corporations, to increase their profits, embark in 
 enterprises not authorized by their charter, still, as to third 
 persons, and when necessary for the advancement of justice, 
 the stockholders will be presumed to have assented, since 
 it is in their power to restrain their officers, when they 
 transgress the limits of their chartered authority.^^ But 
 municipal corporations stand upon a different ground. They 
 are not organized for gain, but for the purpose of govern- 
 ment; and debts illegally contracted by their officers cannot 
 
 93 Bank of the United States v. Dandridge, 12 Wheat. 04; Creswell 
 V. Lanahan, 101 U. S. 352. 
 
 04Knapp V. Mayor of Hoboken, .39 N. J. L. 394; City of Williams- 
 port V. Commonwealth. 84 Pa. St. 487. 
 
 95 Knapp V. Mayor of Hoboken, 39 N. -T. L. 394 ; 1 Dillon on Munici- 
 pal Corporations, § 400. 
 
 06 Wall V. Monroe County, 103 U. S. 74; District of Columbia v. 
 Cornell, 1.30 U. S. (i(Jl. 
 
 9T Lloyd V. West Branch Bank, 15 Pa. St. 174.
 
 <r7 
 
 § L49. CORPORATIONS AS PARTIES. i'^ 
 
 bo made Lindiriii- upon tlio taxpayers from tlic jirc.-iinicd 
 assent of the latter.'"^ 
 
 The principle is ai)i)lic-al)le to l)otli puLlic aiitl jH-ivate cor- 
 porations, as it is to individuals, that Avhoro they borrow 
 money from a bank or other institution, it does not lie in 
 their mouth to show that the ti-ansaction was of a character 
 prohibited l)y the charter of such bank or other institution."" 
 
 § 149. Indorsements. — When a municipal corporation war- 
 rant is deemed a commercial instrument, negotiable like 
 an ordinary 1»ill of exchange, the party who transfers it with 
 his indorsement is subject to the lial)ilities and entitled to 
 the privileges of an ordinary indorser of a negotiable instru- 
 ment.^ But when such an instrument is regarded as a mere 
 voucher, and not a bill or note, the transferrer by indorse- 
 ment is not deemed an " indorser," in the commercial sense 
 of the term, and could not be held liable as such, though 
 the form of the paper be negotiable. He would be liable, 
 however, to refund the consideration if the instrument were 
 not valid and legal according to its pui'port." 
 
 J'S Bradley v. Ballard, 55 111. 420. 
 
 99 Township of Pine Grove v. Talcott, 19 Wall. C19; Daniel on Nego- 
 tiable Instruments, § 423. 
 
 1 Bull V. Sims, 23 X. Y. 571. 
 
 2 Keller v. Hicks, 22 Cal. 460; Daniel on Negotiable Instruments, 
 § 427.
 
 CHAPTER yil. 
 
 PERSONS PARTIALLY OR WHOLLY DISOUALIFIED. 
 
 SEOTIOK I. 
 
 INFANTS. 
 
 § 150. General rule, — Persons iindei: twenty-one years of 
 age are minors, or infants, as they are more generally termed, 
 and contracts made by them have been divided into three 
 classes: First, void contracts, Avhich are those clearly to 
 the infant's disadvantage — as, for instance, a bond made 
 with a penalty; second, voidable contracts, which are those 
 wliich may or may not be for his benefit, according to cir- 
 cumstances — as, for example, a lease of his lands render- 
 ing rent; and third, valid contracts, which are such as are 
 entered into for necessaries.-^ And by necessaries are meant 
 those things which are needed by the infant, and are suited 
 to his means and rank in life. 
 
 But this distinction as to void and voidable contracts is 
 now regarded as practically obsolete ; all the contracts of an 
 infant, not in themselves illegal, being capable of ratification 
 by him after he has attained his majority, and, therefore, 
 being voidable only. For if absolutely void, they would be 
 incapable of ratification.^ 
 
 § 151. Necessaries and torts — For necessaries an infant 
 may undoubtedly bind himself, and the better opinion is 
 that he may execute a note not negotiable for the amount, 
 the consideration of which might be inquired into, and his 
 protection from imposition insured — he being bound not 
 absolutely for the amount of the note, but only for the real 
 value of the necessaries for which it was given.^ But it is 
 
 1 Story on Xotps, § 77. 
 
 2 1 Parsons on Contracts, 295; Byles on Bills [*r)n], 145; Daniel on 
 Xepotiablo Instruments, § 223. 
 
 3 Ray V. Tubbs, 50 Vt. 688; 1 Parsons on Notes and Bills, 08. 
 
 [94]
 
 § 152. INFANTS. 95 
 
 denied by some of the aiitliorities that an infant can exe- 
 cute any note whatever, of any binding force, even for neces- 
 saries.^ In Eno-huid it has been hehi that an infant inav 
 execute a single bill (a bond without a penalty) for the 
 exact sum due for necessaries; but not a bond with a pen- 
 alty, or carrying interest.^ An infant cannot bind himself 
 for necessaries when he has a parent or guardian who sup- 
 plies his wants;" but when he has authority from his guard- 
 ian or parent, he may purchase them and l)ind himself for 
 them.^ An infant is in general liable for his torts as any 
 other person would be; and if he give a note in satisfac- 
 tion of damages it h&s been held that he is bound thereby.'^ 
 
 § 152. Negotiable paper si^ed by infants. — In respect to 
 negotiable paper to which infants have signed their names 
 as parties, it may be stated as a general i)rinciple, imiver- 
 sally recogiiized wherever the connnon law prevails, that 
 an infant cannot bind himself absolutely as drawer, indorser, 
 acceptor, or maker of a bill of exchang.^ or negotiable note.'* 
 In a case where the acceptor of a bill pleaded infancy, and 
 it was replied that it was given for necessaries, Lord Mans- 
 field, C. J., said: " Did anyone ever hear of an infant being- 
 liable as an acceptor of a bill of exchange? The replica- 
 tion is nonsense, and ought to have been demurred to." ^^ 
 And although the tenor of the modern authorities is to 
 liberalize the law on the subject of infancy, the doctrine is 
 generally followed that an infant cannot be a party to a 
 negotiable instrument — the reason assigned being, that 
 otherwise, should it be transferred to a hona fide holder for 
 value, and without notice of the infancy, the infant, if bound 
 at all, would be bound for the entire sum, and if inquiry 
 
 4Bouchell V. Clary, 3 Brev. 194; Chitty on Bills ["lO], 26. 
 
 5 Russell V. Lee, 1 Lev. 80; Chitty on Bills [*10]. 2(1. 
 
 « Angel V. McClellan, 16 Mass. 28; Guthrie v. Murphy, 4 Watts, 80. 
 
 7 Rundel v. Keeler, 7 Watts, 237 ; Watson v. Heasel. 7 Watts, 344. 
 
 8 Ray V. Tubhs, oO Vt. 688; Daniel on Negotiable Instruments, § 224. 
 8 Williamson v. Harrison, Holt, 359, 3 Salk. 197; Story on Notes, 
 
 S 78. 
 
 10 Williamson v. Watts, 1 Campb. 552.
 
 00 PEKSOXS DISQUALIFIED. §§ 153, 154. 
 
 Avere admitted into the consideration, tho instrument would 
 lose its character as negotiable paper.^^ 
 
 § 153. Infant as payee and indorser. — An infant may un- 
 doubtedly be the payee of a ))ill or note, and may sue upon 
 and enforce it, since it cannot be but for his benefit if the 
 consideration thereof does not move from himself but from 
 some third person, or if it be for a debt justly due to him.^^ 
 But whether or not an infant can personally receive pay- 
 ment is a different question. As a general rule, payment 
 should be made to his guardian, and if it be made to the 
 infant personally, and be thereby dissipated and lost, tho 
 payer would not be discharged.^^ An infant may also in- 
 dorse a bill or note made payable to him or order, so far at 
 least as to enable the indorsee to recover against the drawer, 
 acceptor, or maker, who, by undertaking to pay to him or 
 to his order, are estopped to deny his capacity to order 
 pavment to be made to the indorsee.^'* And to this extent 
 the infant's indorsement would be valid, even if made by 
 his authorized agent or attorney. ^^ " It would be absurd," 
 it has been said by Parker, C. J., " to allow one who has 
 made a promise to pay to one who is an infant, or his order, 
 to refuse to pay the money to one to whom the infant had 
 ordered it to be paid, in direct violation of his promise." ^^ 
 And in respect to the drawer of a bill payable to an infant 
 or order, Lord Mansfield said : " The drawer says, ' let any- 
 body trust the payee on my credit.' " ^^ 
 
 § 154. Infant's indorsement voidable only An infant's 
 
 indorsement is voidable, not absolutely void.^^ And it has 
 
 n Swasey v. Vanderheyden, 10 Johns. 33; Conn v. Coburn, 7 N. H. 
 368. 
 
 12 Warwick v. Bruce, 2 Maulc & S. 205 ; Story on Notes, § 79. 
 
 13 Phillips V. Paget, 2 Ark. 80. 
 
 14 Xightingale v. Withington, 15 Mass. 272; Hardy v. Waters, 38 
 Me. 450. 
 
 15 Hardy v. Waters, 38 Me. 450. 
 
 16 Nightingale v. Withington, 15 Mass. 272. 
 
 17 Grey v. Cooper, 3 Doug. 05 ; Daniel on Negotiable Instruments, 
 i 227. 
 
 ISGoodsell V. Myers, 3 Wend. 479; Edwards on Bills, 245.
 
 § 155. INFANTS. 
 
 97 
 
 been thought that where ho receives a full consideration for 
 the transfer of property, such as a negotiable bill or note, 
 and makes a manual delivery of it, his right to rescind or 
 avoid the contract is suspended until he becomes of age.^° 
 And then he is not allowed to disattirni the contract unless 
 he returns the consideration paid to him."" AVe should say 
 that he might disaifirm the contract and return the con- 
 sideration at any time, provided it was not unreasonably 
 delayed after he became of age.^^ 
 
 § 155. Ratification by adult of bills and notes executed when 
 an infant. — The bill of exchange or promissoiy note of an 
 infant is not absolutely void, but voidable only at his elec- 
 tion. And if, after reaching full age, the then adult ratify 
 and confirm his bill or note executed while he was an infant, 
 whether it were framed so as to be negotiable or not, he 
 will be bound to pay the instrument according to its terms. 
 For by ratification the adult validates the instrument in all 
 respects, and it becomes the same as if it had l>een exe- 
 cuted by an adult.^^ The eifect of the ratification, as stated 
 by Shaw, C. J., is " to ratify and confinn the contract, and 
 give it the same legal effect as if the promisor had been of 
 legal capacity to make the note when it was made." ^ And 
 <'onsequently the bill or note may be sued upon, ^\•itllout 
 any allegation of ratification — that being necessary to ap- 
 pear only in rebuttal of the plea of infancy, when pleaded.-"* 
 
 Unless a written ratification be required by statute, a 
 verbal ratification will be effectual. As to what words vdW 
 amount to a ratification, a mere recognition that the debt 
 existed, or contract was made, is not sufficient. ^^ ^o pe- 
 culiar form of words is requisite, but there must be a direct 
 
 19 Roof V. StaflFord. 7 Cow. 170. 9 Cow. 626. 
 2<»Medbury v. Watrous, 7 Hill, 110. 
 
 21 Bool V. Mix, 17 Wend. 119. 
 
 22 Cole V. Pennell, 2 Rand. 174: Williama v. Moore, 11 M. & W. 266; 
 Hunt V. Massey, 5 B. & Ad. 902. 
 
 23 Reed v. Batchelder, 1 Mete. (Mass.) 5.59. 
 
 24 Daniel on Nejjotiable Instruments. § 230, and notes. 
 
 ^'Martin v. Mayo. 10 Mass. 1.37; Bobbins v. Eaton, 10 N. H. 561; 
 Be-nham v. Bishop, 9 Conn. 330,
 
 98 PERSONS DISQUALIFIED. §§ 15G, 157. 
 
 and explicit recog-nition of the contract, and words express- 
 ing or necessarily implying a promise to fulfill it. The 
 promise of the adult must be made to the party with whom 
 he contracted, or his authorized agent, in order to amount 
 to ratification; and if made to a third party, it will be in- 
 sufiicient.^ 
 
 It follows, therefore, that mere part payment does not 
 amount to ratification by the adult, but expressions of in- 
 tention to abide by a former award, or accepting its benefits, 
 would suffice. Hence the infant's conduct may be such as 
 to amount to ratification, but mere silence and failure to 
 disaffinn will not be sufficient alone.^^ 
 
 § 156. Written ratification. — In England and some of the 
 United States, ratification must be in writing. In 182S, 
 Parliament enacted the statute of 9 George TV, chap. 14, 
 commonly called Lord Tenterden's act, whereby it is pro- 
 vided that " no action shall be maintained whereby to charge 
 any person, upon any promise made after full age, to pay 
 any debt contracted during infancy, or upon any ratifica- 
 tion after full age, of any promise or simple contract made 
 during infancy, unless such promise or ratification shall be 
 made by some writing signed by the party to be charged 
 therewith." And similar statutes have been enacted in most 
 of the United States. 
 
 Wherever such a statute exists, a written promise, in ac- 
 cordance with the enactment, is essential to a legal ratifi- 
 cation. ^ 
 
 SECTION II. 
 
 LUNATICS, IMBECILES, AND DEUNKAKDS. 
 
 § 157. Presumption of sanity Every person is presumed 
 
 to be of sane mind until the contrary be shown by him who 
 asserts it;^ insanity or imbecility cannot in England be 
 showm under a general plea that the defendant did not exe- 
 
 26Goodsell V. Myers, 3 Wend. 479; Reed v. Boshears, 4 Sneed, 118. 
 
 27 Daniel on Negotiable Instruments, § 234. 
 
 28 Jackson v. Van Dusen, 5 Johns. 144; 1 Parsons on Notes and Bills,. 
 150.
 
 §§ 158-lGO. LUNATICS, IMBKCILES, AND DUUXKAUD.S. DD 
 
 cute the Lill, note, or otlier instnunent declared on, but 
 must be specially ])leaded."''* 
 
 The earlier autlionties of the English law held that a 
 man should not be allowed to stultify himself by alleging 
 his own lunacy or imbecility;"''** but such a doctrine sounds 
 more like the gibberish of a lunatic than like the decree of 
 a humane and enlightened lawgiver. And it may now be re- 
 garded as a general rule of universal law that the negotiable 
 contracts of a lunatic, idiot, or other person non compos 
 77ientis, from age or personal intinnity, are utterly void.'^ 
 
 § 158. Degree of incapacity. — Mere weakness of mind, not 
 amounting to imbecility or insanity — mere innnaturity of 
 reason, or want of experience and skill in business, is no 
 ground of defense cither in law or equity, pro\'ided no fraud 
 has been practiced on the ])arty.^" But if the weakness of 
 mind bo so great as to incapacitate the party to guard 
 against imposition and undue influence, it will suffice to va- 
 cate his eontracts.^^ 
 
 § 159. Ignorance of incapacity. — It has been held by quite 
 a number of courts that in order to render effectual the 
 defense of insanity or imbecility, it must be made to appear 
 that the other contracting party had knowledge of the de- 
 fect of mind of the lunatic or idiot, and this view has been 
 upheld not only by many of the courts of last resort in the 
 United States, but also in England. But neither the English 
 nor the American courts are in harmony upon the proposi- 
 tion, there being many well-considered cases which sup- 
 port tlio contrary view.'"''* 
 
 §160. Necessaries; exception to rule. — Tn this regard an 
 imbecile stands n])on the footing of an infant. And his 
 
 29 flarrison v. Richardson, 1 !Moody & R. 504. 
 
 no Roverly's Case. 4 Rep. 126; .Stroud v. :Marsliall. Cro. Eliz. .398. 
 •"•1 Daniel on Negotiable Instruments, § 209; Dickerson v. Davis, 19 
 N. E. 145. 
 
 32 Stewart v. Lispenard, 26 Wend. 299 ; Osmond v. Fitzroy. 3 P. Wms. 
 129. 
 
 33 Johnson v. Chadwell, 8 Huniphr. 145. 
 
 3* Daniel on Negotiable Instruments, § 210, and cases cited.
 
 lUO PEKSOA.S DlStiUALli'lJiD. § 161. 
 
 executed contracts for necessanes, made while lie was tem- 
 l^orarily or apparently sane, with a party acting in entire 
 good faith, would be enforced.'"'^ iVjid if a bill or note were 
 executed by him for necessaries under such circumstances, 
 it would doubtless be valid, at least to the extent of their 
 actual and proven value.^*^ A lunatic has been held bound 
 for medical seiwices rendered his wife;^^ and in England, 
 where a nobleman ordered carriages suitable to his rank, 
 and the coachmaker supplied them bona fide, and they were 
 actually used, it was held that an action was maintainable 
 on the contract, not^vithstanding there had been an inquisi- 
 tion of lunacy finding him to be of unsound mind at the 
 time the carriages were ordered. ^^ The recovery for neces- 
 saries, instead of being condemned, is encouraged by con- 
 siderations of humanity. And the courts may safely go 
 farther, and authorize recovery where the consideration has 
 been full and fair, and has entered into the betterment of 
 the lunatic's estate, it being followed like trust money into 
 his hands, and restored in kind or its equivalent.^^ 
 
 § 161. Persons intoxicated. — Drunkenness is a species of 
 mental aberration, produced by intoxicating stimulants. 
 And if a person become so drunk as to be deprived of under- 
 standing and reason, there is no doubt that, while in such 
 a condition, he has no capacity to enter into a contract. 
 And if he should sign a negotiable instiiuiient, either as 
 maker, drawer, indorser, or acceptor, it would certainly be 
 void as to all parties having notice of the condition in which 
 he signed it.'^^* If the drunkenness were so complete as to 
 suspend all rational thought, the better opinion is that any 
 instrument signed by the party woTild be utterly void even in 
 the hands of a bona fide holder \\-ithout notice, for, although 
 it may have been the party's own fault that such an aberra- 
 
 r>.'. 
 
 Richardson v. Strong, 13 Ired. 106; McCullis v. Bartlett, 8 N. H. 
 509. 
 
 36McCormifk v. Littler, 85 111. 62. 
 
 37 Pearl v. McDowell, 3 .J. -T. Marsh. 658. 
 
 38 Baxter v. Earl of Portsmouth, 7 Dowl. & R. 614. 
 89 Daniel on Negotiable Instruments, § 212. 
 
 40 Jenners v. Howard, 6 Blackf. 240; Clark v. Caldwell, 6 Watts, 130.
 
 §g 102, H;.'5. alien enemies, 101 
 
 tion of mind was produced, when produced, it suspended 
 for the time being his capacity to consent, which is the tirst 
 essential of a contract.'*^ " It is just the same," says Alder- 
 son, B., " as if the defendant had written his name on the 
 hill in his slccj) in a state of somnambulism." ■*" But it has 
 been thoug-ht and held, that even when the drunkenness was 
 complete, a bill «>r note then signed would be valid in the 
 hands of a ho)ia fide holder ^nthout notice.*""^ If the party 
 were fully aware of what he was doing when he signed the 
 paper it would clearly bo binding, as we think, in the hands 
 of a hona fide holder/'* Clearly, '" the merriment of a 
 cheerful cup, which rather revives the spirits than stupefies 
 the reason, is no hindrance to the contracting of just obliga- 
 tions." "5 
 
 v< 162. Eatification. — The same general ]n'inciples of the 
 law of ratification applicable to infancy govern in cases 
 of lunacy, and hence a lunatic, either during a distinct lucid 
 interval, or after pemianent recovery, can ratify a contract 
 entered into while the mind was in a state of disease. In 
 case of drunkenness, the law does not require an affirmative 
 act or a positive promise in order to constitute ratification. 
 If a party, therefore, while intoxicated, buy goods, and keep 
 them when sober, the failure on his part to return the goods 
 is tantamount to ratification, upon the principle of estoppel.^*" 
 
 SECTIO^^ III. 
 
 ALIEN ENEMIES. 
 
 § 163. General principles. — The mere fact that a person is 
 an aUen and a resident of a foreign country in no^^'ise im- 
 pairs the right of the citizents of another coimtry to con- 
 tract with him, or his right to contract ^rith them. On tiie 
 
 ■- 
 
 41 1 Par.sons on Xotes and I?ills, 1.51. 
 
 42 Gore V. Gibson, 13 M. & \\ . 623. 
 
 43 State Bank v. MtCoy, 69 Pa. St. 204. 
 44:MillPr V. Finley, 26 Mich. 240. 
 
 45 Putrindorf. Book 3, chap. 6, § 4. 
 
 46 Daniel on Negotiable Instruments, § 215.
 
 10:2 PEKS02s"S DISQUALIFIED. § 164. 
 
 coutrarv, commercial intercourse between different nations, 
 under relations of amity with each other, are to be favored 
 and encouraged. But if war should break out between two 
 countries, it at once iutei*j)oses a barrier to, and an inter- 
 diction of, all conuncrcial correspondence, intercourse, and 
 dealing between the citizens of the two countries. The hos- 
 tile countiies become sealed as against each other; and both 
 for the purpose of identifying the citizen thoroughly and 
 emphatically with the policy and interests of his comitry, 
 and of preventing coiumunications to the enemy which 
 miirht be damaciiic,' in their character, the law of nations 
 absolutely prohibits all intercourse between the citizens of 
 belligerent countries, and pronounces all contracts between 
 them utterly void. Such contracts are not merely voidable, 
 but ah origine void, and incapable of being enforced or con- 
 firmed.'*'' And the rule applies not only to citizens and native 
 subjects, but as well to all persons domiciled in the respective 
 countries.^^ 
 
 This disability of alien enemies to contract does not rest 
 upon any peculiarity of English or American law, but upon 
 the universal public law of nations, as stated and approved 
 by the most eminent writers, such as Grotius, Puffendorf, 
 Vattel, Bynkershoek; and in the present age, Wheaton, 
 vStory, Kent, Parsons, and others. 
 
 § 164. As drawer, acceptor, indorser, or indorsee. — If two 
 countries are at war, a citizen of one cannot legally draw a 
 bill of exchange upon a citizen of the other. The same 
 principle like\vise applies to an acceptance or indorsement, 
 and even to an indorsee, if the latter knew at the time of 
 the state of war existing. ^^ 
 
 In the late war between the Confederate States and the 
 United States, many transactions between parties on oppo- 
 site sides of the hostile line occurred, and the principle that 
 forbids communication between alien enemies has been re- 
 garded by the courts of the United States, and of the 
 
 47GriswoId v. Waddingtoti, 16 Johns. 438; The Julia, 8 Cranch, 131. 
 
 48 Roberts v. Hardy, 3 Maule & S. 533. 
 
 4& Daniel on Negotiable Instruments, §§ 217, 218.
 
 §§ 1G5, 1G6. MARKIEI) WOMEN. lOo 
 
 several States, as applicable to them. For while the Con- 
 federates States were short-lived, for the time being- they 
 waged war like an independent nation, and were accorded 
 belligerent rights.^ 
 
 SECTION IV. 
 
 MARRIED WOMEN. 
 
 ^ 165. Incapacity of married woman to contract at common 
 law.— Wherever the common law prevails a married woman 
 cannot bind herself as the drawer, acceptor, maker, or in- 
 dorser of a negotiable instrument, and such instruments 
 signed by her (unless as agent for another) are absolutely 
 void.^^ And even a promise made by her after her hus- 
 band's death to pay a bill or note which she executed during 
 his lifetime w^W not bind her unless upon a new and good 
 consideration.^" 
 
 Following the principle just announced, it may be added 
 that the wife's identity is so completely merged in the hus- 
 band's that she can no more contract with him than ^^ath a 
 stranger.^^ Therefore the drawing or indorsement of a l)ill 
 or note bv a husband to his wife is void, and she cannot 
 sue upon it either in his lifetime, or against his executor 
 after his decease.^* 
 
 § 166. Married woman as payee and indorser. — If a bill or 
 note be made payable to a single woman, and she aftenvard 
 marries, it becomes the property of her husband; and if 
 made to her after marriage, it is the property of her hus- 
 band. For two reasons, therefore, a married woman, who 
 is the payee of a negotiable instrument, cannot transfer a 
 perfect legal title to it, or bind herself by indorsing it ; first, 
 because she has no capacity to contract; and, second, be- 
 so Billgeny V. Branch, 19 Gratt. 393; Ward v. Smith, 7 Wall. 447. 
 
 51 Van Steenburgh v. Hoffman, 15 l?:ub. 28; Mason v. Morgan, 2 Ad. 
 & EI. 30. 
 
 52 Lloyd V. Lee, 1 Stra. 94; Meyer v. Hayworth, 8 Ad. & El. 467. 
 
 53 National Bank v. Brewster, 49 N. J. L. 231. 
 
 54 Gay V. Kingsley. 11 Allen, 34.5; Jackson v. Parks, 10 Cush. 550.
 
 10-i PERSOXS DISQUALIFIED. § 167. 
 
 cause the instnmicnt is her husband's.^^ But still, although 
 the husband might recover the instrument which has been 
 transferred by his wife, in an action of trover against the 
 holder, the drawer, and acceptor of a bill and the maker of 
 a note, who have bound themselves to pay to the payee or 
 order, are estopped, when that order is made, to deny its 
 sufficiency. It does not lie in their mouths to declare the 
 effect of their own engagement to be different from its 
 terms; and the holder, under the indorsement of a payee, 
 who is a married woman, may recover against them.^*^ And 
 if there be an indorser, after the married w^oman, he cannot 
 dispute her capacity, as his indorsement warrants it.^^ But 
 other parties to the instrument, not being estopped by their 
 relation to it, may show that one — not the payee — who 
 has indorsed it, is a married woman. These views clearly 
 apply where the paper has been executed to the woman after 
 her marriage; but if made to her before, disability subse- 
 quently created might be pleaded by any party.^* 
 
 § 167. Exceptions to the general rule. — There are six gen- 
 eral exceptions to the rule that a married woman cannot 
 make a valid contract: (1) When the husband is an alien 
 enemy; (2) when the wife has a separate estate, and the 
 contract is made mth reference to or for the benefit of 
 such estate; (3) when the wdfe is a sole trader; (4) when 
 the contract is made for the wife's necessaries; (5) when 
 the husband adopts the wife's name; (6) when the wife is 
 the agent of her husband.^^ 
 
 In either of the instances given, the wife can become a 
 party to a negotiable contract, and be bound as such. 
 
 The contractual power of married women has been made 
 the subject of legislation in very many, if not in all the 
 States. The general scope of this remedial legislation is 
 
 55 Shuttleworth v. Xoyes, 8 Mass. 229; Cotes v. Davis, 1 Campb. 485. 
 50 Smith V. Marsack, G Com. B. 48(5. 
 STPrescott Bank v. Caverly, 7 Gray, 217. 
 
 58 Smith V. Marsaek, 6 Com. V,. 48(5; Daniel on Xegotiable Instru- 
 ments, § 242. 
 
 50 Daniel on Negotiable Instruments, § 244 et seq.
 
 § 167. MABKIED WOMEX. 105 
 
 either to give to lier unlimited contractual power, or to 
 make valid and legal all contracts made by her with refer- 
 ence to or for the benetit of her separate estate. The de- 
 cisions by the different State courts are as varied as is the 
 language of the different enactments, but it may be fairly 
 and generally stated that to the extent of her contractual 
 power, whether it be limited or unlimited by statute, she 
 may become a party to a negotiable instrument.
 
 BOOK III. 
 
 THE NEGOTIATION OF THE INSTRUMENT. 
 
 CHAPTER Till. 
 
 TRANSFER BY DELIVERY AND INDORSEMENT. . 
 
 § 168. Methods of transfer. — The legal title to all nego- 
 tiable contracts is transferred either by mere delivery, or 
 by indorsement and delivery. A negotiable instrument pay- 
 able to bearer, or indorsed in blank, may be transferred like 
 currency by mere delivery; other bills and notes, by indorse- 
 ment of the transferrer's name thereon, and delivery to the 
 individual named, unless they are not expressed to be pay- 
 able to the order of any person, or to bearer, in which case, 
 unless by statute, they are not negotiable in the United 
 States and in England; but it is otherwise in Scotland. But 
 if the paper be payable to A. B., or order, and A. B. in- 
 dorse it to C. D., without adding " or order," C. D. may, 
 nevertheless, transfer it by indorsement and delivery, and it 
 retains its original negotiable character.-^ 
 
 While commercial paper payable to bearer, or indorsed 
 in blank, may be transferred by delivery merely, yet if the 
 payee puts his name upon it, and transfers it, he is liable 
 as an indorser, such indorsement being valid between the 
 indorser and subsequent indorsees;^ and the holder of paper 
 payable to bearer and indorsed may sue upon it as bearer 
 or indorsee, at his election.^ When the instrument is made 
 payable to " order," the indorsement of the payee, followed 
 by delivery, is necessary to transfer the legal title; and 
 the transferee, without indorsement, takes it as a mere chose 
 
 1 Potter V. Tyler, 2 Mete. (Ky.) 58: Blackman v. Green. 24 Vt. 17. 
 
 2 Gwinnell v. Herbert, 5 Ad. & El. 436 ; Brush v. Reeves, 3 Johns. 439. 
 
 3 Story on Notes, § 132. 
 
 [IOC]
 
 §§ Hid, ITO. AATLUK Ui' lM)01iSE.Mi:.\T. 107 
 
 in action, and must aver and prove the consideration/ And 
 he takes it subject to all equities that attached to it in the 
 hands of his transferrer,'' The negotia])ilitj of a note is 
 not atiected by the fact that a corporation indorses it through 
 its seal." 
 
 § 169. Delivery by indorser. — As has been seen, delivery, 
 in any event, by tlie indorser is essential to completion of 
 his contract; and delivery implies its acceptance by the in- 
 dorsee. If a transferee of a bill or note by indorsement 
 send it back to his indorser as worthless, the indorsement 
 is declined, and becomes invalid; and he acquires no new 
 title by mereh^ getting- possession, without a new transfer; 
 but there need not be a new indorsement, because the former 
 indorsement is capable of becoming again valid by ratifica- 
 tion or confinnation.' An offer to indorse for another must 
 be accepted in a reasonable tinic.^ If the proposed indorsee 
 wrongfully retain the note after refusing its acceptance, he 
 cannot upon payment of a judgment for the wrongful con- 
 version hold the indorser liable; such payment will invest 
 him with title to the converted property as of the date of 
 the conversion, which is merely the obligation of the makers 
 of the note, the contract of indorsement having never been 
 consummated.^ 
 
 SECTION I. 
 
 NATURE OF, AXD LIABILITIES CREATED BY, CONTRACT OF IX- 
 
 DORSEMENT. 
 
 § 170. Meaning- of term " indorsement." — Indorsing an in- 
 strument, in its literal sense means writing one's name on 
 the back thereof; and, in its technical sense, it means writ- 
 ing one's name thereon with intent to pass title thereto and 
 to incur the liability of a party who warrants payment of the 
 
 •t Villi Enian v. Stanchrield. 10 :>rinn. 255; Faris v. Wells, 68 Ga. G04. 
 Slladden v. Rodkey. 17 Kan. 429. 
 
 a Rand v. Dovcy, 83 Pa. St. 280; Daniel on Negotiable Instruments, 
 § 663 et scq. 
 
 7 Cartwiight v. Williams, 2 Stark. 340. 
 
 8 Claflin V. Briant, 58 Ga. 414. 
 f Haas V. Sacket, 40 Minn. 53.
 
 108 TRAISiSFEK BY DELIVEKY AND INDOKSEMEJST. § 171^ 
 
 instmment, provided it is duly presented to tlie principal at 
 maturity, not paid by him, and such fact is duly notified to 
 the indorser. Indorsement, strictly speaking, is applicable 
 only to negotiable paper, and the term includes delivery for 
 value to the indorsee, but it is otherwise as to an instrument 
 not negotiable.^*^ 
 
 § 171. An indorsement a separate and independent contract, 
 — The indorsement of a negotiable contract is not merely 
 a transfer thereof, but it is a fresh and substantive contract 
 in itself, embodvin<>' all the terms of the instrument in- 
 dorsed.^^ The indorsement of a bill is equivalent to the 
 drawing of a new bill by the drawer upon the drawee (or 
 acceptor, if it be accepted) in favor of the indorsee ; and the 
 indorsement of a note is equivalent to the drawing of a bill 
 upon the maker, who stands in the relation of acceptor, as 
 it were, in favor of the indorsee. -^^ So entirely distinct and 
 independent is the contract of the indorser of a note from 
 that of the maker that at common law a separate action 
 against each Avas indispensable.^^ 
 
 § 172. Liabilities assumed by indorser. — The indorser en- 
 gages (1) that the negotiable instrument will be accepted or 
 paid, as the case may be, according to its pui'port; but this 
 engagement is conditioned upon due presentment or de- 
 mand, and notice;^* (2) that it is in every respect genuine; 
 (3) that it is the valid instrument it purports to be; (4) that 
 the ostensible parties are competent; (5) and that he has 
 good title to it and the right to indorse it. And if it turns 
 out that any of these engagements but that first named are 
 not fulfilled, the indorser may be sued for recovery of the 
 original consideration Avhich has failed, or be held liable as 
 a party, without proof of demand and notice. ^^ 
 
 10 Daniel on NegotiaVjle Instruments, § 606. 
 
 "Brown v. Hull, .33 Gratt. 27; Bank of British North America v. 
 Ellis, 6 Sawy. 98. 
 
 12 Evans v. Gee, 11 Pet. SO; Ingalls v. Lee, 9 Barb. 947. 
 
 13 Brown v. Hull, 33 Gratt. 29; Patterson v. Todd, 18 Pa. St. 426. 
 
 14 Callahan v. Bank of Kentucky, 82 Ky. 23.5. 
 
 isChitty on Bills [*9.5], IIG; Story on Bills, § 108; Copp v. Mc- 
 Dugall, 9 Mass. 1.
 
 §§ 17o-175. XATfi;!-: of ixdokskmext. 109 
 
 § 173. Liability of indorser " without recourse." — When 
 the indorsement is " without recourse " the indorser specially 
 declines to assume any responsibility as a party to the bill 
 or note; but by the very act of transferring it, he engages 
 that it is what it })urports to be — the valid obligation of 
 those whose names are upon it. Ko is like a drawer who 
 draws udthout recourse; but who is nevertheless liable if he 
 draws upon a fictitious party, or one \nthout funds. And, 
 therefore, the holder may recover against the indorser 
 " \\athout recourse," (1) if any of the prior signatures were 
 not genuine; or (2) if the note was invalid between, the 
 original parties, because of the want, or illegality of, the 
 consideration; or if (3) any ])nor party was incompetent, 
 or (4r) the indorser was "without title. ^" 
 
 Contrasting the liability of a general indorser with an 
 indorser without recourse, it ^vi\\ be seen that the liability 
 of the latter embraces all of the obligations of the former 
 except the first, viz., that the negotiable instrument wall be 
 accepted or paid, as the case may be, according to its pur- 
 port. 
 
 § 174. First, as to acceptance and payment. — The indorser 
 of a bill contracts to pay it at maturity, if, on presentment 
 for acceptance, it is not accepted according to its purport, 
 and he is duly notified of the dishonor. ^^ And the indorser 
 of an accepted bill, or of a notej likewise contracts to pay 
 it, if it be not duly paid by the acceptor or maker.^^ It 
 matters not what may be the cause of the drawer's or 
 makers refusal. The indorser contracts to pay on being 
 duly notified that he refuses to pay. He therefore war- 
 rants the solvency of the parties — or, in short, warrants 
 that it will be paid, either by them or by himself, on receiv- 
 ing notice of their failure. 
 
 § 175. Second, as to genuineness. — The indorser contracts 
 that the bill or note is in every respect genuine, and neither 
 
 i<iDumont v. Williamson, 18 Ohio (N. S.) 515: Seeley v. Reed. 28 
 Fed. 1()7: Challiss v. McCrum. 22 Kan. 127. 
 i7Ballingall3 v. Gloster. .3 East, 481. 
 i^Ogden V. Saunders, 12 Wheat. .313.
 
 110 TUA^'SFER BY DELIVERY AND IN DOKSK.M KXT. ^ 17G. 
 
 forged, lictitioiis, or altered. Undoubtedly, and by universal 
 admission, this principle applies to tlie signatures of the 
 drawer, acceptor, and maker of the bill or note, who are 
 the original parties, and it is often expressed in language to 
 the effect that the indorser warrants that it is a genuine 
 instrument.^^ This rule, however, would not apply where 
 the holder procured the indorsement of a forged note with 
 knowledge of the forgery, and represented to the indorser 
 that it was genuine, or where the holder has received the 
 paper after maturity and without consideration.-'^ Whether 
 or not the indorser's engagement extends to the genuine- 
 ness of prior indorsements is not so well settled. Undoubt- 
 edly the indorser admits their genuineness, as he is estopped 
 to deny his title, which would otherwise be invalid,"^ and 
 notwithstanding the donbts and dissents which have been 
 expressed, it is clear upon principle that the indorser war- 
 rants the instrument throughout.-^ 
 
 § 176. Third, as to validity. — The indorser engages that 
 the bill or note is a valid and subsisting obligation, binding 
 all })ri()r parties according to their ostensible relations;- and 
 he may be held liable although the instrument be entirely 
 null and void as between prior parties themselves; and also 
 as between prior parties and even bona fide holders without 
 notice.-^ In an early English case, where the snit was by 
 the indorsee against the maker of a note void for gaming, 
 Lee, C. J., said: ''The plaintiff is not without remedy, 
 for he may sue Church (the indorser) upon his indorse- 
 ment." '^ 
 
 § 177. Fourth, as to competency of original parties. — The 
 indorser contracts that the original parties to the bill or 
 note were competent to bind themselves, whether as drawer, 
 acceptor, or maker; for otherA\dse, although ostensible, they 
 
 19 Edwards on Bills, 188, 289; Howe v. Merrill, 5 Cush. 83. 
 
 20 Turner v. Keller, 66 N. Y. 66. 
 
 210gden V. Saunders, 12 Wheat. .31.3; Story on Bills, §§ 110, 111. 
 
 22 Daniel on Xej^otiable Instruments, § 672. 
 
 23 1 Parsons on Notes and Bills. 218; Story on Bills, g 190. 
 
 24 Bowyer v. Bampton, 2 Stra. 11.^)5.
 
 §g 178, 17'J. roKM Axn VAinirriKs ok i.xdoijskmknt. Ill 
 
 would not Lo reui parlies to it. 'Jliereforc, if the drawer, 
 aceei)tor, or maker became a party under duress, or were 
 an infant, lunatic, or married woman, the indorser's con- 
 tract is broken,"^ and he may be sued for recovery of the 
 original consideration which has failed, or upon the instru- 
 ment itself, without proof of demand and notice.^^ So, if 
 the instrument puq^orted to be signed by procuration, he 
 engages that there is competent authority in the agent.^' 
 
 But whether or no{; the indorscr's engagement is that all 
 of the antecedent parties are competent to contract is ques- 
 tionable. Quite a ijumber of cases are to be found, both for 
 and against the proposition.^^ 
 
 § 178. Fifth, as to title. — The indorser contracts that he 
 has a good title to the bill or note, and a right to transfer 
 it.^^ If he has "stolen or found the instrument, or other- 
 wise acquired possession without title, and it be payable to 
 bearer or indorsed in blank, he might, before its maturity, 
 invest a bona fide indorsee without notice -with a perfect 
 title, although not himself possessing it; and even after ma- 
 turity, the bona fide indorsee might get from him. some 
 superior rights to his own.^*^ 
 
 SECTION II. 
 
 FORM ATCD VARIETIES OF INDORSEMENT. 
 
 § 179. As to place of indorsement. — AVliile an indorsement, 
 as its derivation and meaning would indicate, should be, and 
 generally is, placed on the back of the instrument, it may be 
 written — although unusual and irregular — on anv other 
 portion of it, even on the face, and under the maker's name.^^ 
 
 25 Bowman v. Hiller, 130 Mass. 153: Haly v. Lane, 2 Atk. ISl ; Rob- 
 ertson V. Allen, 59 Tenn. 233. 
 
 2'! Daniel on Xejiotiable Instruments, §§ GG9, G75. 
 
 27 Edwards on Bills. 289: Story on Bills, § 110. 
 
 28 Daniel on Xen;otial)le Instruments, § G76, and cases cited. 
 
 20 Williams V. Tishomingo Sav. Inst., 57 Miss. 633: Edwards on Bills. 
 289. 
 
 30 Daniel on Xegotiable Instruments, § 077. 
 
 31 Partridge v. Davis. 20 Vt. 449; Bigelow on Bills and Notes. 135.
 
 112 TKANSFEK BY DKLIVEUV AXD INDORSKMEXT, § 180. 
 
 At auv rate, the indorsement must, as a general rnlc, be 
 somewhere on the paper itself, or attached thereto, and un- 
 less it is, the party cannot be held liable as an indorser,^^ but 
 a promise made on a sufHcient consideration Avill sustain 
 an action upon its breach.^^ 
 
 § 180. Allonge. — It is not necessary, however, that the in- 
 dorsement should be upon the original bill or note, in order 
 to constitute it such, in the full sense of the term. It some- 
 times happens that by rapid circulation from hand to hand, 
 the back of the paper is completely covered by indorse- 
 ments; and in such cases the holder may tack or paste on 
 a piece of paper sufficient to bear his own and subsequent 
 indorsements, and thereon the indorsements may be made. 
 Such addition to the original instrument is called an allonge, 
 and it becomes for the purposes above named, incorporated 
 as a part of it.^^ 
 
 §181. Varieties of indorsement. — There are various lia- 
 bilities which may be engrafted on a negotiable instrument, 
 evidenced by the character and terms of the indorsement 
 thereon. An indorsement may be (1) in full or (2) in blank; 
 it may be (3) absolute or (4) conditional; it may be (5) re- 
 strictive; it may be (6) without recourse on the indorser; 
 and there may be (7) joint indorsements of the instrument, 
 (8) successive indorsements, and also (9) irregular indorse- 
 ments.^^ 
 
 § 182. First, an indorsement in full. — It is one w^hich men- 
 tions the name of the person in Avhose favor it is made; 
 and to whom, or to whose order, the sum is to be paid. For 
 instance: "Pay to B., or order," signed A., is an indorse- 
 ment in full by A., the payee or holder of the paper to B. 
 An indorsement in full prevents the bill or note from being 
 indorsed by any one but the indorsee.^*' And none but the 
 special indorsee or his representative can sue upon it.^^ 
 
 32 Fenn v. Harrison, 3 T. R. 757 ; Daniel on Negotiable Instruments, 
 § 748o. 
 
 ssMoxon V. Pulling, 4 Campb. 51; French v. Turner, 15 Ind. 59. 
 
 34 Crosby v. Roub, 10 Wis. 622; Folger v. Chase, 18 Pick. 63. 
 
 "5 Daniel on Negotiable Instruments, § 691. 
 
 30 Mead v. Young, 4 T. P. 28. 
 
 •"•7 Lawrence v. Fussell, 77 Pa. St. 400: Peamor v. Bell, 79 Pa. St. 292.
 
 §§183,184. FOinr axi» varieties of ixdorsement, 11:> 
 
 § 183. Second, an indorsement in blank. — It is one which 
 does not mention the name of the indorsee, and generally 
 consists simply of the name of the indorser written on the 
 back of the instrument. AVhen the bill or note is indorsed 
 in blank, it is, as has been said, transferable by mere deliv- 
 ery to the transferee; but one indo'-sed in full must be in- 
 dorsed again by the indorsee, in order to render it trans- 
 ferable to every intent — for he who indorses to a particular 
 person, declares his intention not to be made liable except 
 by that person's indorsement over. As to an indorsement 
 in blank, it w^as said by Lord Mansfield: " I see no difference 
 between a note indorsed in blank and one payable to bearer. 
 They both go by deliveiy, and possession proves property in 
 both cases." ^® 
 
 The receiver of a negotiable instnmient indorsed in blank, 
 or any hona fide holder of it, may write over it an indorse- 
 ment in full to himself, or to another, or any contract con- 
 sistent with the character of an indorsement f^ but he can- 
 not enlarge the liability of the indorser in blank by wanting 
 over it a waiver of anv of his rights, such as demand and 
 notice;^*' and he cannot fill it up so as to make the instru- 
 ment payable in part to one person and in part to another. 
 The indorscr's contract is single and entire, and the ob- 
 ligation created thereby cannot be broken into fragments, 
 and the indorser required to pay in fractions to different 
 persons.*^ 
 
 § 184. Third and fourth, as to absolute and conditional in- 
 dorsements. — An absolute indorsement is one by which the 
 indorser binds himself to pay, u])on no other condition than 
 the failure of prior parties to do so, and (tf due notice to 
 him of such failure (protest preceding it when necessary, 
 as in the case of a foreign bill). A conditional indor^e- 
 
 38 Peacock v. Rhodes, 2 Doug. G33. 
 
 39 Evans v. Gee, 11 Pet. 80; Condon v. Pcarce, 43 Md. 83; Johnsoa 
 V. Mitchell, 50 Tex. 212. 
 
 4t> Daniel on Negotiable Instnunents. § G94. 
 41 Erwin v. Lynn, 16 Ohio (N. S.), 547. 
 
 8
 
 114 TKAXSFER BY DELIVERY AND INDOKSEMENT. § 185. 
 
 ment is one by wliicli the indorser annexes some other con- 
 dition to his liability. Sometimes the condition is prece- 
 dent, and sometimes subsequent. Thus, "Pay to A. R, 
 or order, if he arnves at twenty-one years of age," or, " if 
 he is living when it becomes due," is an indorsement upon a 
 condition precedent. " Pay A. B., or order, unless, before 
 payment, I give you notice to the contraiy," is upon a con- 
 dition subsequent. The condition attached to the indorse- 
 ment in no manner affects the negotiability of the paper.^^ 
 
 § 185. Fifth, as to restrictive indorsements. — An indorse- 
 ment nuiy be so worded as to restrict the further negotia- 
 bility of the instrmnent; and it is then called a restrictive 
 indorsement. Thus, " pay the contents to J. S. only," or 
 " to J. S. for my use," or " to order for my use," or " for 
 me," are restrictive indorsements, and put an end to the 
 negotiability of the paper.^^ Of the like character is an in- 
 dorsement, " credit my account," or " pay J. S. or order 
 for accoimt or on account of C. D.," or " for collection," 
 or " for collection and immediate returns." '^^ These and 
 similar restrictive words indicate that the indorsee is merely 
 an agent to receive the money, and that he paid no conside- 
 ration for the paper, as a purchaser would not intelligently 
 accept such an indorsement. The indorsee in such a case 
 can only collect the money; he cannot sell or hypothecate 
 the instrument for his ovm. benefit, nor can he hold the in- 
 dorser liable to himself. The restrictive words of the in- 
 dorsement give notice of the trust engrafted upon it, and 
 if the indorsee passes it off for his o^\ai debt, or in any 
 other manner violative of the trust, the transferee would 
 take it subject to the trust. "^"^ 
 
 § 186. Sixth, as to qualified indorsements, or indorsements 
 without recourse. — An indorsement qualified by the Avords 
 " without recourse," " sans recours,^' or " at the indorsee's 
 
 42 story on Notes, § 149; Daniel on Negotiable Instruments, § 697. 
 
 43 Wilson V. Holmes, 5 Mass. 543; Williams v. Potter, 72 Ind. 354. 
 
 44 First Nat. Bank v. Reno County, 3 Fed. 257; White v. National 
 Bank, 102 U. S. 658; Continental Nat. Bank v. Woems, 69 Tex. 489. 
 
 45 Hook V. Pratt, 78 N. Y. 371 : Claflin v. Wilson, 51 Iowa, 15; Daniel 
 on Negotiable Instruments, § 098.
 
 §§ 187, 1S8. FORM AND VAKIPrriES OF INDORSEMENT. 115 
 
 own risk," renders the indorser a mere assignor of the title 
 to the instrument, and relieves him of all responsi])ility for 
 its payment,"" thon*,di not from certain liabilities which have 
 been already enumerated." But such an indorsement does 
 not throw any suspicion upon the character of the paper. 
 
 § 187. Seventh, as to joint indorsements. — If a bill or note 
 be made payable to several ])crsons not partners, the trans- 
 fer can only bo made by a joint indorsement of all of them; 
 and as Chitty says, '' If a bill has been transferred to several 
 persons not in partnershi]), llio right to transfer is in all 
 collectively, and not in any one individually." "^^ AVhere, 
 however, one of two or more joint payees or transferees un- 
 dertake to transfer the instrument, the extent of the trans- 
 fer will depend uj)on the nature of his interest. Such in- 
 terest, wdiatevcr it is, passes to his indorsee or assignee; 
 but nothing beyond that, as against his coparty, unless in- 
 deed there be some other element in the transaction in the 
 nature of fraud, agency, or other circumstance, modifying 
 the rights of the parties.^^ Xo action could be maintained 
 on the indorsement of one of the joint parties,^^ the interest 
 passing thereby being equitable merely. 
 
 § 188. Eighth, as to successive indorsements. — When sev- 
 eral persons indorse a bill or negotiable note in succession, 
 the legal effect is to subject them as to each other in the 
 order they indorse. The indorsement imports a several and 
 successive, and not a joint obligation, whether the indorse- 
 ments be made for accommodation or for value received, 
 unless there be an agreement aliunde different from that 
 evidenced by the indorsements. When the successive in- 
 dorsements are for accommodation of other parties, the in- 
 
 40 Wilson V. Codman's Exr., 3 Cranch, 192; Borden v. Clark, 26 Mich. 
 410. 
 
 47 See a)itc, § 173. 
 
 48Loniax v. Picot, 2 Rand. 2f)0; Kelley v. Whitney, 45 Wis. 117. 
 
 40 Chitty on Bills [*201], 232; Daniel on Negotiable Instruments, 
 § 701a. 
 
 r>i> Brown v. Dickinson. 27 (Jratt. 693. 
 
 51 Caverick v. Vickery, 2 Doug. 652.
 
 110 TRANSFER UY DELIVERY AND IXDORSEMENT. § 189. 
 
 dorsers for accommodation may make an agreement to be 
 jointly and equally bound, but whoever asserts such an agree- 
 ment must prove it. In cases, therefore, in which no such 
 agreement is proved, the indorsers are not bound to con- 
 tribution amongst themselves, but each and all are liable 
 to those who succeed them.^^ 
 
 It follows from the principles stated that while the right 
 of contribution exists between equal indorsers, contribution 
 does not arise between successive indorsers. The presump- 
 tion is that the indorsements were made in the order ap- 
 pearing upon the instrument, but it should be noted, how- 
 ever, that the indorser is not necessarily bound by and ac- 
 cording to the actual date of the indorsement, for the con- 
 tract determines the nature and extent of his liability; and 
 if it appear that the instrument was indorsed by one party 
 with the agreement that another should become prior in- 
 dorser, the latter will be held responsible first in point of 
 contract though second in point of time.^^ 
 
 § 189. Ninth, as to irreg-ular intervening indorsements. — 
 There are some cases of irregular indorsements that call 
 for attention. Thus, suppose a bill be indorsed specially to 
 A., and then, before A.'s indorsement, there appears the 
 indorsement of B. In such a case, Alderson, B., said: 
 • " The indorsement only operates as against the party mak- 
 ing it, and then as a fresh drawing." ^"^ Upon such an in- 
 dorsement of a note, the party cannot be sued as a maker. 
 Littledale, J., said, in such a case: " It may be correct to 
 say that an indorsement of a bill is in the nature of a new 
 drawing. But supposing the indorser of a bill to be strictly 
 in the situation of a drawer, it does not follow that the 
 indorser of a note is a maker." It was hold, therefore, 
 that the party must be sued as an indorser; but that a prior 
 party could not be sued at all, as a link in the chain of title 
 was lacking."'^'' 
 
 53 Daniel on Negotiable Instruments, § 703. 
 
 53 Daniel on Negotiable Instruments, § 704; Chalmers v. McMurdo, 
 5 Munf . 252 ; Slack v. Kirk, 67 Pa. St. 380. 
 
 54 Penny v. Innes, 5 Tyr. 107. 
 85Gvvinnell v. Herbert, 5 Ad. & El. 430.
 
 §§ I'.)(J-li)2. FOK.M AND VAIUETIKS OK IN DOKSEMENT. 117 
 
 5^ 190. Party whose name is on back of note payable to 
 bearer, or which has become so by being made payable to 
 maker's order and indorsed by him. — If the note be pay- 
 able to bearer either in terms or becomes so in effect l»y 
 being made payable to the maker's order, ami then being 
 indorsed by him, in either case the party who places his 
 name on the back of it will be deemed an indorser only.*^'' 
 Such a case as this, as said by Bigelow, J., in ^lassachusetts, 
 in a case where the note was payable to and indorsed by 
 the maker, ''does not fall within that anomalous class of cases 
 where a third person, neither maker nor payee, puts his 
 name on the back of a note before its indor.sement by the 
 payee, but is the ordinary case of an indorsement of a note 
 payable to bearer, the effect of which cannot be varied or 
 controlled by parol proof." ^^ 
 
 § 191. Whether or not one not payee writing his name on 
 back of paper before him is an indorser. — When a note is 
 made j)ayable to the order of the payee, and the name of 
 another a]ipears indorsed in l)lank upon it, and was then 
 indorsed before the note was delivered to, or indorsed by, 
 the payee, a very different (juestion, and one upon which 
 the authorities are very much at issue, arises. In such cases 
 such person does not appear upon the face of the paper to 
 have held, and to have transferred the title, but rather to 
 have placed his name upon its back and to add strength and 
 credit to it, and thus render it more easy of circulation; 
 and the inciuiry is presented whether he intended to bind 
 himself for its payment as a joint maker or surety, as a 
 guarantor, or only as an indorser,^ whose liabilitv can only 
 be fixed by due demand and notice.^* 
 
 § 192. Conflict of decisions. — Referring to the question pre- 
 sented in the foregoing paragrai)li, it may be stated that one 
 class of cases adhere to the view that such party is a joint 
 
 61' Dubois V. Mason, 1'27 Alass. 37; National Bank v. Dorset Marble 
 Co., (H Vt. 106. 
 
 5T Bigelow V. Colton, 13 Gray, 309; Daniel on Negotiable Instruments, 
 § 707a. ' ■ r ■ 
 
 58 Daniel on Negotiable Instruments, § 709.
 
 lis TRANSFEII BY DELIVERY AiSTD INDORSEMENT. § 193. 
 
 maker; another, that be is presumably a surety or guaran- 
 tor in the form of a joint maker ; another, that he is sec- 
 ondarily liable as a guarantor; another, that he is presuma- 
 bly a second indorser, and still another, that he is prima 
 facie first indorser. The authorities in support of the five 
 conflictinsr views stated will be found collated in the notes 
 to sections 713 to 715, inclusive, of Daniel on Negotiable 
 Instruments. 
 
 Veiy many, if not a majority, of the cases, including the 
 Supreme Court of the United States, support the view that 
 such party should be regarded as a joint maker; yet, upon 
 reason, it would seem that the party who puts his name on 
 the back of a negotiable instrument before it is indorsed 
 by the payee should be presumed to be a first indorser. 
 Parties often so sign their names for accommodation of the 
 maker, and are themselves as much surj^rised as the hold- 
 ers of the paper to find that difficult questions arise as to 
 the nature of their obligation. And the law merchant 
 should, in its elasticity to fit all manner of commercial trans- 
 actions, recognize customary transactions, and apply to them 
 the natural and simple presumptions that render them in- 
 telligible and practical. Strained technical dissertations and 
 conclusions have so bungled and confounded the question 
 Avliich we have considered, that a fresh mind investigating 
 it is lost in labyrinths of suggestion and decision, while as 
 we think an easy solution may be found in adopting the 
 views above presented. 
 
 § 193. Admissibility of parol evidence to ascertain inten- 
 tion as between immediate parties, — The authorities very 
 generally concur, though not with entire unanimity, that, 
 as between the immediate parties, the interpretation ought 
 to be in every case such as will cany their intention into 
 effect, and that their intention may be made out by parol 
 proof of the facts and circumstances which took place at 
 the time of the transaction.^^ If the person wdio places his 
 name on the back of the note before the payee intended 
 
 MGood V. Martin, 95 U. S. 95; Rey v. Simpson, 22 How. 241.
 
 g^ r,>4, r.)5. I'OIIM AND VAKIKTIKS OF KNDOUSEMENT. 1 1 !J 
 
 at the time to be bound to the payee only as a guarantor 
 of the maker, he shall nut be deemed to be a joint prom- 
 isor or an absolute promisor to the payee.'^ If he intended 
 to bind liimself as a surety or joint maker of the note, he 
 will not be permitted to claim afterward that he was only 
 a guarantor.*^^ And if he intended to be bound only as an 
 indorse r, the better opinion is that this also may be shown 
 as between him and the payee.*"'" 
 
 §194. Parol proof between remote parties — Whether or 
 not there is the same liberty in the use of parol proof when 
 the note has been passed to a bona fide holder for value, and 
 without notice, is a question upon which the authorities are 
 by no means so umform. Some of them confine parol proof 
 to cases in which the note is still in the hands of the orig- 
 inal party to whom it was first delivered as a valid instru- 
 ment;*^^ but others declare that it is equally competent in a 
 suit by a ho7ia fide holder on the ground that the contract 
 is ambiguous.*^ In a comparatively recent case before the 
 United States Supreme Court, wdiere the question arose be- 
 tween a bona fide indorsee and the original party so sign- 
 ing his name, the court, wdiile recog^lizing '' irreconcilable 
 conflict " of the authorities, said: '' But there is one princi- 
 ple upon the subject almost universally admitted by them 
 all, and that is, that the interpretation of the contract ought 
 in every case to be such as will carry into effect the intention 
 of the parties, and in most cases it is admitted that proof of 
 the facts and circumstances w^hich took place at the time of 
 the transaction are admissible to aid in the interpretation of 
 the language employed." *'^ 
 
 § 195. Difference between guaranty and ordinary suretyship. 
 — Guaranty is a peculiar kind of suretyshiii, as is also an 
 
 eoSe^^uour v. Farrell, 51 Mo. !)"); Worden v. Salter, 90 111. 160. 
 61 Key V. Simpson, 22 How. 241; Walz v. Alback, 37 :Md. 404. 
 eZEberhart v. Page, 89 111. ooO ; Mammon v.^ Ilartman, 51 Mo. 1G9. 
 «3 Houston V. Bruner, 39 Ind. 383; Whitehouse v. Hansen, 42 N. H. 
 18. 
 
 64Greenouph v. Smead, 3 Ohio St. 415; Rey v. Simpson, 22 How. 211. 
 65 Good V. Martin, 95 U. S. 95.
 
 120 TRANSFER BY DELIVERY AND INDORSEMENT. § 195. 
 
 indorsement ; but guaranty differs from indorsement, and it 
 differs also from the ordinary contract of a surety. The 
 distinction between a guarantor and an ordinary surety is 
 not easily defined, and the terms have been frequently used 
 as convertible. A surety is generally a comaker of the note, 
 while the guarantor never is a maker; and the leading dif- 
 ference between the two is, that the surety's promise is to 
 meet an obligation which becomes his own immediately on 
 the principal's failure to meet it, while the guarantor's prom- 
 ise is always to pay the debt of another.*^ A surety is liable 
 as much as his principal is liable, and absolutely liable as 
 soon as default is made, without any demand upon the prin- 
 cipal whatever, or any notice of his default. He may be 
 damaged by reason of no demand being made or notice given, 
 and he may be sued as a promisor. "^^ 
 
 The guarantor's liability is less stringent, and unless de- 
 mand is made within a reasonable time, and notice given 
 in case of default, he is discharged to the extent that he 
 may be damaged by delay. Thus, if the debtor has, in the 
 meantime, become insolvent, so that he could not have re- 
 course upon him, he could not be held.^^ Thus, Ave see the 
 surety's liability is primai-y and direct, like that of the prin- 
 cipal. The guarantor's is secondary and collateral. And, 
 in general, the guarantor contracts to pay, if, by the exer- 
 cise of due diligence, the debt cannot be made out of the 
 principal debtor, while the surety undertakes directly for 
 the payment at once, if the principal debtor makes default. 
 As has been well said, the suretv '' is an insurer of the debt: 
 the guarantor is the insurer of the solvency of the debtor." ^^ 
 ^STor does his guaranty inure to the benefit of an indorser 
 signing before him, and \rith w^hom he is not in privity."^^ 
 
 66 2 Parsons on Notes and Bills, 118. 
 
 67 Perry v. Barret, 18 Mo. 140. 
 
 68 Perry v. Barret, 18 Mo. 140. 
 
 C9 Krampt's Executrix \. Hatx's Executors, 52 Pa. 525; Arents V. 
 Commonwealth, 18 Gratt. 770. 
 
 70 Phillips V. Plato, 42 Hun, 189; Daniel on Negotiable Instruments, 
 § 1753.
 
 g I'JG. FOU.M AAD VAKliiTlES Oi>' l.\DOitSEME2iT. i l' 1 
 
 § 196. Difference between guaranty and indorsement. — The 
 liability of a guarantor also ditiers materially from, and is 
 more onerous than, that of an indorser. The indorser con- 
 tracts to he liable only upon condition of due presentment 
 of the bill or note on the exact day of matunty, and due 
 notice to him of its dishonor. And he is absolutely dis- 
 charged by failure in either particular, although he may 
 sutler no actual damage whatever. The guarantor's con- 
 tract is more rigid, and he is bound to pay the amount upon 
 a presentment made, and notice given to him of dishonor, 
 within a rcasonabU' time. And in the event of a failure to 
 make ])resentment and give notice within such reasonable 
 time, ho is not absolutely discharged from all liability, but 
 only to the extent that he may have sustained loss or in- 
 jury by the delay.'^^ The same person may be gmirantor, 
 and also indorser of a note; and in such case, while failure 
 to give him due notice of dennnnl and nonpayment will dis- 
 charge him as indorser, he will still be bound as guarantor.'^^ 
 
 71 Castle V. Rickley. 44 Ohio St. 400; Burrow v. Zapp, G9 Te.x. 47G. 
 73 Deck V. Works, 57 X. Y. Pr. 292.
 
 on AFTER IX. 
 
 NATURE AND RIGHTS OF A BONA FIDE HOLDER. 
 
 SECTIOi^ I. 
 
 THE RIGHTS OF A BONA FIDE HOLDER. 
 
 § 197. It is a general principle of the law merchant that, 
 as between the immediate parties to a negotiable instru- 
 ment — parties between whom there is a privity — the only 
 superiority of such an instrument over other unsealed evi- 
 dences of debt is that it prima facie imports a considera- 
 tion. But a bona fide holder for value of such an instru- 
 ment takes it discharged of all the equities existing between 
 antecedent parties, and may recover on it although it be 
 without any validity as between the parties prior to himself, 
 as, for example, if it was without consideration originally, 
 or the consideration has failed, or the instrimient was sub- 
 sequently released or paid, or even though it was originally 
 obtained by fraud, theft, or robbery.^ This general rule is 
 subject to certain exceptions, treated of in the succeeding 
 sections. 
 
 It should bo observed, however, that as between him and 
 his immediate predecessor, or party between whom and him- 
 self a privity exists, he stands upon the same footing as the 
 payee of a note against the maker. Fraud, illegality, want 
 or failure of consideration may be pleaded against him by 
 such immediate party as freely as if the instrument were not 
 negotiable.^ 
 
 § 198. As to anterior parties to the transfer of the instru- 
 ment, the rule is, as between them on the one part and the 
 holder on the other, altogether different. They are not in 
 
 1 Daniel on Nej^otiablo Instruments, § 7690, and cases cited. 
 
 2 Daniel on Negotiable Instruments, § 810. 
 
 [122]
 
 §§19i), 200. KKJIITS OF A BONA VU)K HOLDER. l-^ii 
 
 privity with liiui, and llicy cannot set up against him de- 
 fenses which might be valid as between them and any i)arty 
 prior to him, unless he is affected by such defenses through 
 mala fides, notice, or othenvise having taken the paper with- 
 out value, or without the usual course of business,"* which 
 circumstances will be hereinafter discussed. 
 
 § 199. Meaning of term " bona fide holder; " presumption. — 
 Two propositions may be considered as settled principles of 
 commercial law — principles which have been, for the most 
 [)art, reiterated by the Supreme Court of the United States, 
 and prevail throughout the Union: 
 
 First. That to entitle one to the rights and protection of 
 a purchaser or holder of a negotiable instrument, as set out 
 in the preceding paragraphs of this chapter, the paper must 
 have been acquired (1) bona fide, (2) for a valuable con- 
 sideration, (3) in the usual and ordinary course of business, 
 
 (4) before maturity, or rather when it was not overdue, and 
 
 (5) without notice of facts which impeach its validity as 
 between antecedent parties.* 
 
 Second. The mei-e possession of a negotiable instrument, 
 produced in evidence by the indorsee, or by the assig-nee 
 where no indorsement is necessary, imports prima facie that 
 he acquired it huna fide for full value, in the usual course 
 of business, before maturity, and without notice of any cir- 
 cumstance impeaching its validity; and that he is the owner 
 thereof, entitled to recover the full amount against all prior 
 parties. In other w-ords, the production of the instnmient 
 and proof that it is genuine (where indeed such proof is 
 necessary), 'prima facie establishes his case; and he may there 
 rest it.'* 
 
 § 200. What rebuts the presumption. — Countervailing 
 proof that the instrument was executed without considera- 
 tion as between the original parties — as, for instance, that 
 it was executed for accommodation as between them, or that 
 
 3 Daniel on Negotiable Instruments. § 811. 
 
 4 Daniel on Negotialile TTistninients, § TfiOa. 
 
 5 Daniel on Negotiable Instruments, § 812, and cases cited.
 
 1l>4 KTOIITS of a liOXA FIDE lIOI,l)KJ{. § 201. 
 
 tlie consideratit)!!, orii;iiially valid, lias subsequently failed 
 — does not imi)air the holder's superiority of position, and 
 lu- may still rest liis case upon the instrument itself, from 
 Avhicdi it Avill still be presumed that he acquired it in a 
 manner entitling him to stand upon the vantage ground of 
 a buna fide holder for value.'' While the authorities are 
 not uniform, it may be considered fairly well settled that 
 proof of mere misapplication of the instrument, where it 
 has subserved its substantial purpose, does not shift the bur- 
 den of proof. 
 
 But if the maker or acceptor, who is primarily liable for 
 payment of the instrument, or any party bound by the orig- 
 inal consideration, proves that there was fraud or illegality 
 in the inception of the instrument ; or if the circumstances 
 raise a strong suspicion of fraud or illegality, the owner 
 must then respond by showing that he acquired it homi 
 fide for value, in the usual course of business, while current, 
 and under circumstances which create no presumption that 
 he knew the facts which impeach its validity. This prin- 
 ciple is obviously salutary, for the presumption is natural 
 that an instrument so issued would be quickly transferred 
 to another; and unless he gave value, which could be easily 
 proved if given, it would perpetrate great injustice, and re- 
 ward fraud to permit him to recover.^ And if it be shown 
 that the original owner lost the bill or note, then, also, the 
 burden of proof is upon the holder to prove his title. ^ 
 
 § 201. Owner, though not himself bona fide holder, acquires 
 title of his transferrer. — A transferee can generally get as 
 good a title as his transferrer possesses, and it is, therefore, 
 a settled principle that if the party who transferred the in- 
 strument to the holder acquired the note before maturity, 
 and was himself unaffected by any infirmity in it, the holder 
 acquires as good a title as he held, although it were overdue 
 
 c Commissioners v. Clarke, 94 U. S. 285 ; Goodman v. Simonds, 20 
 How. .34.3. 
 
 T Collins V. Gilbert, 94 U. S. 761; Crampton v. Perkins, 65 Md. 24. 
 s Cnion Nat. IJank v. Barber, 9 N. W. 809.
 
 § iMJi!. i:i(.iii> <Ji' A ];<-.NA i ini-: iioi. 1-1:1:. li'.» 
 
 and dishonored at tlu; time of transfer.'-* Thus, it has been 
 held that in an action by a second ind(jrsee of a bill given 
 for a smuggling debt, he could recover against the acceptor, 
 although he took it overdue, his indorser having acciuired it 
 huna fide, without notice before it fell due.^" And, therefore, 
 even if he have notice that there was fraud in the inception 
 of the paper, or that it was lost or stolen, or that the con- 
 sideration has failed between some anterior parties, or the 
 paper be overdue and dishonored, he is, nevertheless, enti- 
 tled to recover, provided his innnediate indorser was a bona 
 fide holder for value unaffected by any of these defenses. 
 As soon as the paper comes into the hands of a holder, un- 
 affected by any defect, its character as a negotiable security 
 is established; and the power of transferring it to others, 
 with the same immunity which attaches in his own. hands, 
 is incident to his legal right, and necessary to sustain the 
 character and value of the instrument as property, and to 
 ])rotect the hona fide holder in its enjoyment. To prohibit 
 him from selling as good a right and title as he himself has, 
 would destroy the very object for which they are secured 
 to hhn — would indeed be paradoxical. And it has been 
 justly said that this doctrine '^ is indispensable to the secur- 
 ity and circulation of negotiable instruments, and is founded 
 on the most comprehensive and liberal principles of public 
 policy. ^^ 
 
 But this rule is subject to the single exception that if the 
 note were invalid as between maker and payee, the payee 
 could not himself by purchase from a hona fide holder be- 
 come a successor to his rights; it not being essential to such 
 bona fide holder's protection to extend the principle so far.^^ 
 
 ^ 202. Equities of third persons. — The indorsee of over- 
 due negotiable paper, even if his transferrer does not answer 
 the description of a bona fide holder, is not subject, it has 
 
 ••' Woodman v. Churchill, 52 Me. 58; Ba.ssett v. Avery, 15 Ohio St. 299. 
 10 Chalmers v. Lanion, 1 Campb. 383. 
 
 HScothnid County v. Hill. 132 V. S. 117; Porter v. Pittsburg Steel 
 Co., 122 U. S. 2G7. 
 
 12 Todd V. Wick, 3G Ohio St. 387; Sawyer v. Wiswi-Il, 9 Allon. 42.
 
 120 mulITS OK A IiO,\A FIDK UOLDKU. §203. 
 
 been held, to equities which may have intervened between 
 remote indorsers and indorsees, but only to those which ex- 
 ist, at the time of indorsement to him, between the princi- 
 pal i^arties and the original holder, and between himself 
 and his own iudorser.^^ But if there be an equity attaching 
 directly to the bill or note itself, it has been held in Eng- 
 land that it may be asserted against an indorsee after ma- 
 turity by a third party who claimed the right to follow the 
 bill.^'* And if the equity be a claim of some right to the 
 instrument directly attached to it, we perceive no good rea- 
 son why it may not be asserted against an indorsee after ma- 
 turity by any party whatsoever. ^^ 
 
 § 203. After maturity, negotiable paper circulates, but 
 transferee only acquires the right and title of the transferrer. 
 — After maturity negotiable paper still passes from hand 
 to hand ad infinitum until paid. Moreover, the indorser, 
 after maturity, writes in the same form, and is bound only 
 upon the same condition of demand upon the drawer and 
 notice of nonpayment as any other indorser. The paper 
 retains its commercial attributes, and circulates as such in 
 the community; but there is this vital distinction between 
 the rights of a transferee who received the paper before, 
 and of one who received it after maturity. The transferee 
 of negotiable paper to whom it is transferred after matur- 
 ity, acquires nothing but the actual right and title of the 
 transferrer;^" and the like rule applies to the transferee who 
 takes the paper after a refusal to accept by the drawee, 
 provided he had notice of such refusal.^^ In other words, 
 the transferee of negotiable paper refused acceptance (with 
 notice thereof), or overdue, takes it subject to all the 
 equities with which it was encumbered in the hands of the 
 
 13 Hill V. Shields, 81 N. C. 250. 
 
 14 Ames on Bills and Notes, vol. I, 891; Benjamin's Chalmers' Digest, 
 140. 
 
 15 Daniel on Xepotial)le Instniments. § 726?). 
 
 in Texas v. Hardenburg, 10 Wall. 68; Morgan v. United States, 113 
 r. S. 500. 
 
 17 0'Keefe v. Dunn. Taunt. 305; Bartlett v. Benson, 14 M. & W. 
 733,
 
 §§204,205. IJICUTS Ol- A liO.NA IIDE IIOI.UKIC. 127 
 
 party from whom lie received it; for it comes, to use Lord 
 Ellonborough's words, " disgraced to him." Thus, if he 
 took it from a thief, or finder, or from a bankrupt incapaci- 
 tated by hiw to make the transfer, lie could not recover on 
 it, inasmuch as the thief, finder, or ])ankrupt could not.'*" 
 § 204. Defenses to which such indorsee is subjected. — But 
 an indorsee of an uvurdue bill or note takes it subject to 
 equities arising out of the transaction in which the instru- 
 ment was executed, and existing at the time of the transfer, 
 and not to a set-off arising out of collateral matters; in other 
 woi-ds, he takes the paper subject to its existing equities. 
 This doctrine was settled in England by the case of Bur- 
 rough V. Moss,^^ and has been uniformly followed, and has 
 been held to apply even though the indorsee had notice, 
 gave no consideration, and took the paper on purpose to de- 
 feat the set-off.-" But no equity arising after the transfer 
 can affect the holder. ^^ lie is therefore subject to the de- 
 fense — (1) That it was affected in its inception with some 
 inherent vice, as, for instance, fraud, illegality, or duress; 
 or (2) that the consideration failed, or rliat payment had 
 been made, or that there had been accord and satisfaction 
 at the time of the indorsement, or that there was some 
 equitable defense arising out of the transaction, in which 
 the paper was given, which disabled his indorser in whole 
 or in part to recover.^" Any of these defenses is called an 
 equity attaching to the instrument. 
 
 § 205. Whether accommodation character of instrument is 
 an equity attaching to it after maturity. — The general rule, 
 that the purchaser of overdue paper can stand in no better 
 position than his transferrer, does not apply so far as to 
 
 iSBylcs on Bills [*1G1], 284; Ashurst v. Royal Bank. 27 Law Times. 
 1G8. 
 
 19 10 B. & C. 558. 
 
 20 Oulds V. Harrison, 10 Exch. 572; Havessler v. Greene, 8 Mo. App. 
 454. 
 
 21 Baxter v. Little, 6 Mete. ( Mass. ) 7 ; Haywood v. Stearns, 39 Cal. 
 58. 
 
 22 Daniel on Negotiable Instruments. § 725o.
 
 128 EIGHTS OF A BONA FIDE HOLDER. § 206. 
 
 invalidate bills and notes drawn, indorsed, or accepted for 
 accommodation, overdue at the time they are negotiated or 
 transferred, it being considered that parties to accommo- 
 dation paper hold themselves out to the public, by their sig- 
 natures, to be bound to every person who shall take the 
 same for value, the same as if it were paid to themselves.^^ 
 And the fact that the purchaser knew that the paper was so 
 drawn, indorsed, or accepted for accommodation, does not 
 weaken his position.^'* This principle is well established in 
 England, and it is to be regretted that the decisions in the 
 United States do not uniformly follow the English rule. 
 
 In the United States a number of cases follow the English 
 rule, but in others it is presumed that the accommodating 
 party intended to lend his credit only until the maturity of 
 the paper, and did not contemplate its subsequent negotia- 
 tion; and it is accordingly held that prima facie- he is en- 
 titled to defend against an indorsee after maturity.^ If 
 there was an agreement, express or implied, not to negotiate 
 an accommodation bill after maturity, the weight of author- 
 ity is justly to the effect that such agreement would consti- 
 tute an equity attaching to it upon its transfer after matur- 
 ity ;^^ but in an English case, demurrer was sustained to a 
 plea that it was agreed by the parties that the paper should 
 not be negotiated after maturity, knowledge of the pur- 
 chaser of such agreement not being averred.^^ 
 
 § 206. Eights of bona fide holder, where the instrument 
 originated in fraud or violation of authority. — There are 
 numerous cases in which the line of demarcation between 
 the fraud which does not affect the ho7ui fide holder for 
 value, and without notice, and that which utterly vitiates 
 the instrument in all hands whatsoever, is narrow and diffi- 
 cult to distingniish. The distinctions taken are frequently 
 
 2:!Cluiiies v. Marsdcn, 1 Taunt. 224; Carruthers v. West, 11 Q. B. 
 14.3. 
 
 . 24 Charles v. Marsden, 1 Taunt. 224. 
 2-"j Daniel on Negotiable Instruments, § 726, and eases cited. 
 2*; Charles v. Marsden, 1 Taunt. 224; Parr v. Jewell, 16 C. B. 684. 
 27 Carruthers v. West, 11 Q. B. 143.
 
 ^207. IJUillTS OK A I!<).NA IIDK 1 1 < ) l-l-K II. 1 -"•> 
 
 very rofinod and inotiiphysical; but the test questions to be 
 apiilicMl, we think, are these: (1) Has the party son-ht to 
 be charged created an agency or trust, ])y nimns of whu-h 
 the fraud has been connnitted^ (2) Has' ho dcdiberatcly 
 given the appearance of validity to the instrument'^ (:}) 
 Has he conanittod negligence respecting it, by means of 
 which an opportunity for the fraud has been created^ And 
 whenever either of these questions can be answered affinna- 
 tively upon a fair consideration of all the circumstances of 
 the case, the balance of ecpiity is- in favor of tlic hoim fide 
 lioldri- for value and without notice, the axiomatic principle 
 of law then applying, that where one of two innocent per- 
 sons must suffer, the one who creates the trust, or does the 
 act from which the loss results, must bear it. 
 
 I'lie cases in which the hono fide holder cannot recover 
 will be separately discussed in the succeeding section of this 
 chapter.^ 
 
 §207. Instrument completed, but not delivered. — \Vhilo ir 
 cannot be said that the authorities are uniform, it may be 
 stated to be safely settled that if a negotiable instrnnient 
 has been fully completed in form and sigiied by the drawer 
 or nuiker, and, before delivery, is stolen from the possession 
 of the party who has signed it, and passed by the thief to 
 a hona fide holder for value in the usual course of business, 
 it would afford him no defense against such hona fde hokler. 
 Whether the instrument be ]niyabl6 to bearer, or to the or- 
 der of the thief, if it be indorsed by him, we can see nc 
 reason why the houa fde holder should not be entitled to 
 recover. The want of delivery is a defect not apparent on 
 the face of the bill or note. The i)arty has given the ap- 
 pearance of validity to his ]iaper. His signature is itself an 
 assurance that his obligation has been perfected by delivery; 
 and it being necessary that the loss should fall upon one 
 of two innocent parties, it should fall upon the one whose 
 act had opened the door for it to enter."^ 
 
 28 See post, §§ 218-22.1. 
 
 20 Daniel on Xcgotiablo Instniments, § 8.37; Kinyon v. Wohlford, 17 
 
 Minn. 230. 
 
 9
 
 130 RIGHTS OF A BOXA FIDE HOLDER §§ 208, 209. 
 
 § 208. Where the maker has perfected the instrument, and 
 left it undelivered in a safe, desk, or other receptacle, it 
 shonld then be at his hazard. Such papers are made for use, 
 and not for preservation. The maker creates the nsk of 
 their being eloigned, by keeping them on hand, and places 
 them on the same basis as negotiable papers which have 
 been put upon the market. AVhen once issued the pur- 
 chaser is protected and the owner loses, even though he had 
 guarded his property with bolt and bar; and if bankers and 
 others who must necessarily be in possession of negotiable 
 securities in the course of trade are not protected, we can 
 discover no principle Avhich can be invoked to protect one 
 who holds his own paper contrary to the ordinary wants and 
 usages of trade.^*^ 
 
 But, as will be seen in a succeeding section, if the in- 
 strument be incomplete, and there has been no delivery of 
 it to an agent in trust or otherwise intervening, no negli- 
 gence can be imputed to the maker, and he is not, there- 
 fore, bound, even to a bona fide holder mthout notice. ^^ 
 
 ij 209. When instrument has been intrusted to another with 
 blanks. — If the party sought to be charged upon the nego- 
 tiable instrument has been betrayed by his agent, or some 
 other party to whom he has intrusted his signature on a 
 blank paper, and who has fraudulently written over it a bill 
 or note. There is no doubt that if the bill or note were 
 complete with the exception that there was a blank left for 
 the sum, the parties who had signed, accepted, or indorsed 
 it would be bound to pay any sum with which it might be 
 filled up to a bona fide holder ^vithout notice of the hmita- 
 tion of authority to the agent or other person having it 
 in hand,'^^ and it is immaterial that such holder knew that 
 it had been signed, accepted, or indorsed in blank, unless 
 
 •"50 Thompson on Bills (Wilson's ed.), 92; 1 Parsons on Notes and 
 Bills, 114. 
 
 31 See poHt, § 223. 
 
 •"'2 Michif^an Bank v. Eldred, 9 Wall. 544; Violett v. Patton, 5 Cranch, 
 142.
 
 §210. lUGIITS Ol- A I50NA FIDE HOLDER. 1 ^H 
 
 he was also cognizant of its being fraudulently tilled up.''^ 
 If ho knew when he took the i)aper that authority as to 
 filling it up was exceeded, he could not recover.'^"* 
 
 It seems, also, to be well settled that if the party sought 
 to be charged has intrusted his blank signiature to an agent 
 or other person, and has authorized such agent or other per- 
 son to till the blank in some form, for some purpose, that 
 he would be bound U> a bona fide holder if the agent or per- 
 son wrote over such signature a bill or note. Thus, where 
 papers indorsed in blank were left with a clerk, with author- 
 ity to use them for certain purposes, and they were fraudu- 
 lently obtained from him and used differently, the indorser 
 was held liable.''^ 
 
 § 210. When executed under mistake and misrepresentation. 
 — -If the party possesses ordinary faculties and knowledge, 
 and is betrayed into signing a bill or note by the assurance 
 that it is an instrument of a different kind, and is guilty of 
 any negligence in signiing the paper, it is generally agreed 
 that he is bound ;^" and the act itself can hardly be com- 
 mitted ^Wthout negligence.^^ A man has no right to have 
 eyes and see not; or ears and hear not; and while the law 
 should protect those who suffer from the want of the senses 
 in their proper development, or ordinary education, it should 
 not pei-mit tlio=e Avho have both capacity and education to 
 throw the burden of their failure to use them upon inno- 
 cent third parties. In such cases we should say the act of 
 signing the paper without intending to do so, as a general 
 rule, imported negligence per se, and rendered the party 
 liable.^® If he has full and unrestricted means of ascertain- 
 inc; the true character of the instniment before siirnino; it, 
 but nes-lectine- to avail himself of such means of informa- 
 tion, and relying on others' representations, he signs and 
 
 33 Huntington v. Branch Bank, 3 Ala. 186. 
 
 34Clewer v. Wynn. 59 Ga. 246. 
 
 35 Putnam v. Sullivan, 4 ]Mass. 45. 
 
 3S Chapman v. Rose, 44 How. Pr. 364 ; Ruddell v. Phalor, 72 Ind. 533. 
 
 37 First Nat. Bank v. Johns. 22 W. Va. 520. 
 
 38 0rt V. Fowler, 31 Kan. 478.
 
 132 EIGHTS OF A BOXA FIDE HOLDER. §§211,212. 
 
 delivers a negotiable paper, instead of a different paper, 
 which he intended to sign, he cannot be heard to impeach 
 it when it has been passed to a bona fide holder. 
 
 Wliile the doctrine herein announced is supported by the 
 strongest cases, in quite a number of the States the courts 
 go far to protect the defrauded parties to the paper rather 
 than the innocent holders; and in England it would seem 
 that the holder under such circumstances is not protected.^* 
 
 § 211. When delivered by third party in violation of in- 
 structions. — Still another class of cases, presenting a ques- 
 tion somewhat different from any yet discussed, has arisen 
 where parties have signed their names to bills and notes, 
 either perfect in form, or in blank, with authority only to 
 deliver them as conqilete and valid instruments upon condi- 
 tion that some other person shall become a party, or some 
 contino-encv be fulfilled. In these cases it will be observed 
 the person with whom such instrument is left is its mere 
 custodian, and not an agent having any absolute power to 
 dispose of it. He is not, as to the instrument, an agent 
 ^^'ith limited powers, but the agency itself is conditioned 
 upon the happening of the event upon which he is to be- 
 come the agent to deliver. Tn such case the Aveight of au- 
 thority in the United States, with reason, supports the view 
 that the hona fide holder for value can recover, notwith- 
 standing such defence; but there is high authority in Eng- 
 land for the contrary view.^° 
 
 § 212. Escrows. — In none of the cases, however, is it 
 maintained that a bill or note, either in full or in blank, in- 
 trusted to the payee, to be valid upon a condition, will not 
 be binding if the condition is violated. Such deliveiy to 
 the payee is in law absolute and complete ; and whether the 
 instrument be negotiable or under seal, the doctrines which 
 apply when third parties are the custodians do not extend 
 to them.^^ An instrument under seal deposited with a third 
 party, to be delivered upon condition, is called an escrow; 
 
 39 Daniel on Negotiable Instruments, § 8.50. 
 ^ Daniel on Nopotia1)le Instruments, § 8.54. 
 41 Classman v. Ilolscher, 41> -\Io. 87.
 
 g 213. lilGIITS (Jl- A 1!(J.\A I IDK llOl.ltKi;. \''>'-'> 
 
 iiiul, according to some English and American decisions, a 
 negotiable instrument may also be deposited with a third 
 party as an escrow, and the parties to it will not be bound 
 if the depositary issue it in broach of the trust reposed in 
 him."*" 
 
 § 213. Difference between sealed and unsealed instruments. 
 — It should be borne in mind that there is a cardinal dis- 
 tinction between the perversion of instruments in form ne- 
 gotiable, or capable and intended to be made so in a certain 
 contingency, and that of instruments under seal. The lat- 
 ter, when completed, may be dclivcrod to third persons — 
 that is, to other than the parties — with authority only to 
 deliver them upon condition; and in such case, if the con- 
 dition be violated, the party intending to be only condition- 
 ally bound A\dll not be l)Ound absolutely.^^ A sealed instru- 
 ment so delivered to a third person is called an escrow. 
 
 l^ut negotiable instruments, as it seems to us, stand on a 
 ditrerent footing entirely. They are letters of credit, and 
 j)roclamations that all is right to every purchaser or trans- 
 feree; and one who chooses to ])nt his name on an instru- 
 ment possessing these characteristics, instead of confining 
 his liability by shaping it in a form expressive of his mean- 
 ing, ehould not be permitted to ensnare others, and escape 
 himself unscathed. To hold othen^nse would be a ^vide de- 
 parture from the princi]iles which ramify the law merchant, 
 and w'ould be as repugnant to reason as a decision that an 
 instrument absolute on its face might be varied by a parol 
 condition. And even as to sealed instruments the doctrine 
 now finds favor that, if eoui]dote, and signed by sureties 
 with condition lliat otlioi- sureties shall join, the signing 
 sureties will bo bound if they leave tliom with the principal 
 obligors, and then deliver them without procuring the ad- 
 ditional sureties,*"* though it is otherwise in cases where 
 such instruments, when left with the obligors, indicate on 
 tlioir face that they are incomplete, and that additional par- 
 
 42 Couch V. Meeker, 2 Conn. 302 : Chipnian v. Tuckpr. :?S Wis. 43. 
 
 43X;,sh V. Fujratp. 24 Gratt. 202. 
 
 44Dair v. Unitorl States, ](! Wall. 1 : State v. Pork, .")3 Me. 2S4.
 
 134 EIGUTS OF A 1102s A FIDE IIOLDEK. § 214. 
 
 ties are contemplated/^ and also where the party taking them 
 has notice that the condition is violated.""' if the sealed 
 instrument, perfect on its face, he left with the obligee, 
 upon condition that it should l;e valid only upon its execu- 
 tion by a third person, the delivery is complete, and it is 
 valid and operative though not so executed.^^ 
 
 g 214. Defenses excluded by estoppel in pais — Defenses 
 that might otherwise be successfully interi^osed against the 
 bona fide holder for value may be excluded by reason of the 
 representations or conduct of the defendant, which is called 
 in law estoppel in pais. Thus, if the holder purchased the 
 note with the defendant's knowledge and consent, it has 
 been held that the latter cannot set up prior payment, or 
 other defense against it.^'- It is to be observed that estop- 
 pel does not arise unless the act or course of conduct alleged 
 to constitute it is acted upon by the party seeking to benefit 
 bv it,^^ and therefore a statement made by the maker to 
 the indorser of a note after he acquires it, that it is all 
 right, does not amount to estoppel.^** IvTor does it arise 
 where there is a mistake or misunderstanding as to the 
 identity of the note concerning which the representation 
 is made.^^ 
 
 Kepresentations, referring only to the then existing status 
 of the instrument, mil not exclude defenses subsequently 
 arising.^^ And where they are made by an indorser, and 
 not by the maker, they bind the former, but not the lat- 
 ter. ^^ This plea, on the part of the plaintiff, which excludes 
 the right of the defendant to set up the true condition of 
 affairs as a defense, is called " estoppel in pais," it being 
 an extraneous matter dehors the record. And whenever 
 
 45 Ward V. Churn, 18 Graft. 801. 
 4GNash V. Fugate, .32 Gratt. r^m. 
 
 47 Simonton's Estate, 4 Watts, 180; Duncan v. Pope. 47 Ga. 445. 
 
 48 Downer v. Reed, 17 Minn. 493. 
 40 Moore v. Robinson, 62 Ala. 5.37. 
 
 coCrossan v. May, 08 Ind. 242; Hoover v. Kilander, 83 Ind. 420. 
 
 51 Eriekson v. Roehm, 33 Minn. 53. 
 
 52 Maury v. Coleman, 24 Ala. 381; Allen v. Frazee, 85 Ind. 283. 
 53Dowee v. Schutt, 2 Den. G21.
 
 §§ 21."), 210. lilGiITS OK A IJOXA iiDi; iioi.i.i.i:. 1;j5 
 
 it is relied upon wiiere the system ol' etjiiiunjii law i)leinling 
 prevails, it lias been held that it must be specially pleaded. ^^ 
 
 § 215. Good faith essential to estoppel. — It is to be ob- 
 served respecting estoppel that while; it exacts good faith 
 from the party bound, it likewise exacts good faith in the 
 party dealing with him. Therefore, if the latter is himself 
 cognizant of a fraud upon the maker at the time of the pur- 
 chase, and knows, also, that the maker is ignorant respect- 
 ing it, good faith would require tiiat he should inform the 
 maker of it, and if he does not so inform him, the maker will 
 not be estopped by having told the purchaser that the note 
 was all right, and would be paid at nuiturity, from setting 
 up the fraud of which the purchaser had notice. °^ And so 
 the holder will not be protected if he knew of any illegality 
 in the instrument.^*' In other words, estoppel is a plea that 
 is born of, and must be nourished by, equity, and he that 
 asks equity must do equity. If he conceals facts from the 
 maker he acts inequitably and cannot recover. ^^ 
 
 § 216. Amount of recovery; general rule. — The holder may 
 recover the full amount if the note was made, or bill ac- 
 cepted, upon a valuable consideration. And even if there 
 was no consideration, as between the origiiuil parties, but 
 a mere becoming a party for accommodation, the holder, 
 although he knew the fact, could recover the whole amount, 
 provided he paid full value. ^'^ But if he paid less than full 
 value, it is a matter of dispute whether or not he is limited, 
 in his recovery, against the maker, to the amount advanced. 
 The English courts sustain the affinnative of the proposition, 
 l)nt the authorities in the United States are directly at war. 
 The true doctrine seems to be, that the party paying less 
 than its face value for paper made, accepted, dra^\Ti, or in- 
 dorsed for accommodation, and not knowino- the fact at the 
 time of purchase, is entitled to recover the full amount 
 
 54 Davis V. Thomas, 5 Leiph. 1. 
 CSSackett v. Kollar. 22 Ohin St. ')')4. 
 56 Watson V. lloag, 40 Iowa. 14.1. 
 r-T Piatt V. Jerome. 2 Blatohf. ISO. 
 58 Charles v. Marsden. 1 Taunt. 224.
 
 13(3 EIGHTS OF A BONA FIDE IIOLDEE. § 217. 
 
 against the accommodation parties, because they have delib- 
 erately and intentionally put forth themselves to be treated 
 as being bound in the manner indicated.^" But the view has 
 been taken in a number of cases that he is only a bona fide 
 holder to the extent of the consideration paid by himself or 
 a prior party, and can recover that only against the accom- 
 modation party.*'^ And even if he knew they were accom- 
 modation parties at the time of purchase, it would make no 
 difference, provided the party he j)urchased it from was a 
 bona fide holder, who could himself enforce it, or was a 
 subsequent holder to the parties between whom the accom- 
 modation existed, and appeared to the purchaser to be him- 
 self a bona fide holder, and not an agent for any of the par- 
 ties to the accommodation.*'^ 
 
 §217. Amount of recovery when bill or note has inception 
 in fraud.-; — AVhen the execution of the bill or note has been 
 induced by fraud, a different rale, according to a number 
 of authorities, would apply. The bona fide holder of it for 
 value, and A\dthout notice, is undoubtedly entitled to be pro- 
 tected against a loss which would befall him if the party de- 
 frauded were permitted to set up the defense of fraud on 
 the part of the payee against him, as we have already seen. 
 But it does not, therefore (as has been considered), follow 
 that he may recover of such party the whole amount, when 
 he has paid a less sum. For his protection and security 
 against loss, it is only necessary that he should be paid back 
 the amount wliich he was induced to give for the instru- 
 ment by its appearance of validity, and therefore such 
 amount is the limit of his recovery against the drawer or 
 maker who was defrauded into the execution of the in- 
 strument.*'" But the Fnited States Supreme Court has ex- 
 pressed itself in favor of the doctrine that the purchaser 
 
 59 Moore v. Baird, .30 Pa. St. 138; Dunn v. Ghost, 5 Colo. 139. 
 
 GOIIolcomb V. Wyckoff, 35 N. J. L. R. 37; Stoddard v. Kimball, 6 
 Cush. 409. 
 
 'ii Holconib V. Wyckoff, 3.1 X. J. L. R. 37 ; Gimmi v. Cullen, 20 Gratt. 
 439. 
 
 fi2Holc-o(nb V. Wyckoff, ?,r, X. .T. L. R. 38; Story on Bills, § 188.
 
 §§ 218, 219. EXCEPTIONS TO KULE. 137 
 
 of a ncgotiablo security before maturity, iu cases where 
 ho is not persoiuilly chargeable \nth fraud, is entitled to 
 recover its fall amount against its maker, though he may 
 have paid less than its par value, whatever may have been 
 its original intirndty, and this view seems to be the settled 
 conclusion of that tribunal."^ 
 
 Where, however, some legal consideration exists in the 
 inception of the paper, it seems that in New York the bona 
 fide holder may recover the full amount, no matter what 
 amount ho may give for it.""* This seems to us tho true dis- 
 tinction in suck cases. Tf the paper is issued in fraud with- 
 out consideration, tho bona fide ])urchaser should be limited 
 in recovery to the amount i)aid with interest.''^ But if 
 there was an original valid consideration, or the paper was 
 issued fairly and intentionally without consideration, then 
 he is entitled to recover the whole amount regardless of 
 the amount he pays.^*' 
 
 SECTIOX IT. 
 
 EXCEPTIONS TO, AND MODIFICATIONS OF, THE RULE AS TO 
 THE RIGHTS OF A BONA FIDE HOLDER. 
 
 § 218. Exceptions stated. — There are some defenses wdiich 
 are as available against a bona fide holder for value, and 
 without notice, as against any other party. They are those 
 which go to show that the instrument was absolutely and 
 utterly void, and not merely voidable, (1) by reason of the 
 incapacity of the party assuming to contract; or, (2) by rea- 
 son of some positive interdiction of law; or, (3) by reason 
 of the want of consent of the party sought to be bound to 
 tho particular contract. *^^ 
 
 §219. (1) As to incapacity.^ — if the maker of the note 
 were an infant, a married woman, a lunatic, or a person 
 
 •■■! Cioniwfll V. County of Sac, 96 U. S. 60; Railroad Companies v. 
 Schiitte, 103 r. S. 118. 
 
 MHowe V. Potter, 61 Barb. 357. 
 
 05 Holcomb V. Wvfkoff, 35 N. J. L. 38. 
 
 60 Daniels v. Wilson, 21 Minn. 530. 
 
 67 Daniel on Negotiable Instruments, § 806.
 
 138 EIGHTS OF A BONA FIDE IIOLDEK. §§ 220, 221. 
 
 under guardiausliip, the signature would impart no validity 
 to it, and the bona fide holder could not recover against 
 him, or her, however ignorant of the incapacity when he 
 took the paper. '^*^ 
 
 ;< 220. Instrument obtained by imposition on infirm or 
 illiterate persons. — If one laboring under the disadvantage 
 of some natural infirmity or defect of education has been 
 imposed upon, and thereby deceived into executing a nego- 
 tiable contract, under the impression that it was for a dif- 
 ferent amount, or was a contract of a different character, 
 the defense of fraud and imposition avails against a bona 
 fide holder for value. The case suggested is closely allied 
 in principle to the defense of incapacity. Thus, if a note 
 were fraudulently or falsely read to a blind man, and he 
 were to sign it believing it to have been correctly read; or 
 if the party were unable to read, and signed a note, after 
 due inquiry and precaution, under the assurance that it was 
 an agreement of a different kind, we should have a new ele- 
 ment entering into the consideration of his liability. In 
 such cases the want of faculties to detect the fraud shields 
 the party from its consequences, and the authorities justly 
 exonerate him.^^ 
 
 He has created no agency or trust. He has not inten- 
 tionally or knowingly given the appearance of validity to 
 the paper. It cannot be said that he has acted negligently, 
 because his infirmities prevented that diligence which men 
 of ordinary faculties and of education possess.'^" 
 
 § 221. (2) As to instruments declared void by law — If the 
 
 statute law pronounces the contract evidenced by the in- 
 strument to be void, because made upon a gambling, usuri- 
 ous, or other illegal consideration, it is an absolute nullity; 
 and, although in form negotiable, no currency in the market, 
 and no degree of innocence or ignorance on the part of 
 
 68 Daniel on Negotiable Instruments, § 806a. 
 
 69 Putnam v. Sullivan, 4 Mass. 45; Schuylkill County v. Copley, 67 
 Pa. St. 386. 
 
 70 Daniel on Negotiable Instruments, § 847.
 
 ^222. 
 
 EXCEPTIONS TO RULE. I'i'-^ 
 
 the holcler can impart any validity to it.'' But although 
 the party executing such bill or note cannot be bound even 
 to a boiia fide holder, the indorser will be liable upon his 
 indorsement, which warrants its validity, and is a separate 
 and independent contract." And in many localities nego- 
 tiable instruments executed upon gaining or usurious con- 
 siderations are upon the same footing as those executed for 
 other illegal considerations — that is, void between the par- 
 ties, but valid in the hands of a bona fide holder.''^ 
 
 But sometimes the statute declares a contract void as be- 
 tween original parties, and in such cases a bona fide pur- 
 chaser is not affected by the illegality ;^^ and when the in- 
 strument was executed upon an illegal consideration, es- 
 pecially if illegal by statute (but not absolutely avoiding 
 the instrument), it throws upon the holder the burden of 
 proving bona fide ownership for value.'^^ But a failure of 
 consideration does not throw this burden upon him.'^ And 
 in all cases where the statute does not declare the instru- 
 ment void, bona fide ownership for value being proved, the 
 holder is entitled to recover." 
 
 § 222. (3) Want of consent. — So where the party bas never 
 in fact signed the instniment as it then stands, as, for in- 
 stance, where it was forged in its inception, and is not 
 genuine, or was subsequently materially altered; or if such 
 signature were written on the fly-leaf of a book loaned to 
 such person, or in an album, or were left with him for any 
 legitimate purpose, such as to be used as a means of identi- 
 fying the writer's hand^\^^ting.'^ In such cases the bona fide 
 
 71 Sondhoim v. Gilbert. 117 Ind. 76; Harper v. Young, 112 Pa. St. 
 419. 
 
 73 Daniel on Negotiable Instruments, § 671 et seq. 
 
 73Haight V. Joyce, 2 Cal. 64 : Cheney v. Cooper, 14 Xebr. 41.i. 
 
 74Paton V. Coit, 5 ]Mioh. 50.5. 
 
 75 Vallett V. Parker. 6 Wend. 615: Johnson v. Meeker. 1 Wis. 436. 
 
 76 Wilson V. Lazier. 11 Gratt. 478. 
 
 77 Williams v. Cheney, 3 Gray. 215; Hubbard v. Chapin, 2 Allen. 32S. 
 
 78 Indiana Nat. Bank v. Holtzclaw, !)S Ind. 85; Caulkins v. Whisler. 
 29 Iowa. 495; Nance v. Lary. 5 Ma. 370; Daniel on Negotiable Instru- 
 ments, chaps. XLII and XLIII, on Forgery and Alteration.
 
 140 RIGHTS OF A BONA FIDE llOLDKlf. §§ 223, 224. 
 
 hokler cannot enforce it, for the defendant has only to 
 say: ''This is not my contract," " )in)i Ikvc in fwdra veniJ' 
 So if executed by one acting as agent of the principal, bnt 
 exceeding his anthonty, the bona fide holder cannot recover 
 unless the principal were in fanlt in indncing him to believe 
 that the agent had authority."''* 
 
 § 223. Instrument incomplete and undelivered. — A class of 
 cases, illustrative of want of consent, arises when in an in- 
 complete instrument has been signed and stolen, without any 
 delivery to an agent in trust, or otherwise, intervening. In 
 such cases no trust for any pui^^ose has been created. No 
 instrument has been perfected. ISTo appearance of validity 
 has been given it. ISTo negligence can be imputed. There- 
 fore if the blank be filled, it is sheer forgery, in wdiich 
 the maker is in nomse involved, and he is not therefore 
 bound, even to a bona fide holder without notice. ^*^ 
 
 § 224. Duress. — Any contract entered into under duress 
 lacks the first essential of validity — the consent of the con- 
 tractor — • and negotiable instruments form no exception to 
 the rule. As between immediate parties, proof of du- 
 ress at once amiids the instrument, or rather enables the 
 party who w^as under duress to avoid it, at his option ;^^ 
 but whether or not, in the hands of a bona fide holder for 
 value wdthout notice, the duress in its inception renders it 
 voidable, is a question upon which the authorities do not 
 altogether agree. In England the rule seems to be that the 
 defense of duress cannot be pleaded against the bona fide 
 holder for value, and the English doctrine is cited by many 
 text-writers on bills and notes (including Byles, Chitty, and 
 Story) without criticism or dissent, and as a correct state- 
 ment of the law. But Roscoe, in his Digest of Bills and 
 Notes, agrees wdth the proposition stated in the text, as 
 
 79Andover Bank v. Grafton, 7 N. H. 298; The Floyd Acceptance, 7 
 Wall. OGO. 
 
 ^'^ 1 Parsons on Notes and Bills, 114; Daniel on Negotiable Instru- 
 ments, § 830. 
 
 81 Bush V. Brown, 49 Ind. 573; Fairbanks v. Snow, 145 Mass. 153.
 
 §225. KXC'EI'TIOXS TO KLLK. lU 
 
 does also the most recent ami tlionmiih <>t" tlir- Ainericau 
 Avritors ou Uiis subject.^" 
 
 Whatever may be saicl about tlie cases on the subject, pro 
 and cut), there siirely is no sound principle which would 
 compel any person, whether a party to a negotiable or other 
 kind of instrument, to pay it, when under violent duress — 
 that is, under thtf compulsion of force ^nth the only alter- 
 native of submitting to great bodily injury or indignity. 
 Consent is of the essence of every contract, and if it i^ not 
 given, the party should not be bound if he had no alterna- 
 tive but to seem to give it, or suffer grievous wrong. lie 
 creates no trust, Iiq commits no negligence, whereby the con- 
 fidence of another can be betraved. lie is in no default, 
 having a right of self-defense in preferring his own life and 
 safety to the chances of pecuniary injury to others; and liis 
 extorted act is nothing more nor less than the act of the 
 wrongdoer who uses his person as the instrument of forging 
 his name, llireats to inflict slighter wrongs would stand 
 on a different footing. ^^ 
 
 § 225. Real and personal defenses. — j\fr. Xorton, in his 
 treatise on the subject of l>ills and Xotes, adopts the classi- 
 fication of Professor Ames in his work on that subject, and 
 classifies defenses into real and personal, — grouping all de- 
 fenses that arQ good against a bona fide holder for value 
 under the class described by him as '" real defenses," and 
 all the defenses good as between immediate parties, but not 
 available against a bona fide holder, he groups under the 
 class denominated as " personal defenses." He thus de- 
 fines the two classes of defenses: 
 
 " (a) Real — Or those that attach to the instrument itself, 
 and are good against all persons. 
 
 "(b) Personal — Or those that grow out of the agree- 
 ment or conduct of a particular person in regard to the 
 instrument, Avliich renders it iucciuitable for him, rh(Mii:h 
 holding the legal title, to enforce it against the defendant, 
 
 S2 Koscoc's Digest of Bills and Notes, 117, note 20; 1 Parsons on Notes 
 and Bills, 27G. 
 
 83 Daniel on Negotiable Instruments, § 858.
 
 142 BIGHTS OF A BOXA I IDF. JlOl.DEU. §§ 226-228. 
 
 but which are not avaihible against hona fide purchasers for 
 vahie mthout notice." ^^ 
 
 SECTION III. ,x. 
 
 WHAT CONSTITUTES A BONA FIDE HOLDER. 
 
 §226. Requisites of; general rule. — As has been seen, to 
 entitle the purchaser or holder of a negotiable instrument 
 to the peculiar rights and protection set out in the first sec- 
 tion of this chapter, such purchaser must have acquired title 
 to the instrument (1) bona fide, (2) for a valuable considera- 
 tion, (3) in the ordinary course of business, (4) before ma- 
 turity, and (5) ^\dthout notice of facts which impeach its 
 validity as between antecedent parties. 
 
 § 227. Bona fides essential. — The holder, in order to be 
 entitled to protection against offsets and equities and de- 
 fenses based upon frauds, pleaded by prior parties, must 
 have acquired the paper in good faith from his predecessor. 
 " Fraud cuts down everything," ^^ and although the holder 
 may pay value, yet, if his acquisition of the paper be in any 
 respect fraudulent — as where it is made or transferred to 
 give him preference over other parties to a compromise of 
 creditors — he cannot claim the position of a bona fide 
 holder.^*^ In pleading, mala fides must be distinctly alleged, 
 and an allegation that the party is not the bona fide holder 
 is not sufficient.^'^ It is the bona fides of the holder alone 
 that is to be considered, not that of his transferrer, and 
 the fact that the payee had an interest to part with tlie 
 paper, is not a circumstance which affects the rights of his 
 indorsee. ^^ 
 
 ^ 228, Effect of negligence on bona fides. — For quite a long 
 period of time the courts of England oscillated between two 
 propositions, viz. : Whether good faith alone, or good faith 
 in conjunction with the exercise of due diligence, consti- 
 tuted the test of the holder's right to recover. But the 
 
 &4 Norton on Bills and Notes, 216. 
 
 «5 Rogers V. Hadloy, ."52 L. J. Exch. 248. 
 
 80 Daniel on Negotiable Instruments, § 193 et seq. 
 
 »7Uther V. Rich. 10 Ad. & El. 784. 
 
 SSHelmer v. Kroliek, 30 Mich. 373.
 
 § 229. WHAT CONSTITUTES A BONA FIDE HOLDER. 143 
 
 Court of King's Bcucli finally decided that, while gross 
 negligence might be evidence tending to show mala fides, 
 and as such admissible, it did not in itself amount to proof 
 of mala fides, and was not sufficient to deprive tho holder 
 of his right to recover.**" Thus tho bona fides of the pur- 
 chaser or holder was restored as the test of his right to re- 
 cover, and, after a wide departure, the law re-established 
 upon tho original basis established by Lord Kenyon. And 
 Lord Dciiniaii, C. J., said: "" The question I offered to sub- 
 mit to the jury was whether the plaintiff had been guilty 
 of gross negligence or not. I believe we are all of opinion 
 that gross negligence only would not be a sufficient answer 
 where the party has given consideration for the bill. Gross 
 negligence may be evidence of mala fides, but it is not the 
 same thing. AVe have shaken off the last remnant of the 
 contrary doctrine. Where the bill has passed to the ydain- 
 tiff without any proof of bad faith in him, there is no 
 objection to his title." 
 
 The rule thus finally re-established in England has been 
 followed and approved there in subsequent cascs,^ and has 
 met ^dth the approbation of most all of the writers on ne- 
 gotiable instruments, on the ground that it relieves them of 
 the clog which the contrary- doctrine imposes on their nego- 
 tiability, and presents at once the clear and intelligible ques- 
 tion of bona fides for the consideration of the jury; whereas, 
 to leave it to a jury to determine as to the degree of cau- 
 tion which a prudent man must exercise on taking such an 
 instrument, would lead to much perplexity and to frequent 
 iniustice. 
 
 ^ 229. American view. — Tn the Ignited States tlie decisions 
 of the courts have varied, some follo\nng the rule in the 
 case of Gill v. Cubitt."- in which the principle was laid down 
 
 8© Goodman v. Harvey. 4 Ad. & El. 870. 
 
 ooEasely v. Crockford, 10 T-ing. 243; Raphael v. TJank of England. 
 33 Eng. L. & Eq. 278. 
 
 01 Story on Notes, SS 107, 382; Edwards on Bills, 506; 2 Parsons on 
 Notes and Bills, 277-279. 
 
 92 3 B. & C. 400.
 
 144 EIGHTS OF A BONA FIDE HOLDER. § 229. 
 
 that, although the holder had given value for the bill or 
 note, yet, if he took it under circumstances which ought 
 to have excited the suspicions of a prudent and careful 
 nian, he could not recover, but by far the greater number 
 concurring in the principle which has been finally established 
 as the law of England.*^^ Chancellor Kent, in his Commen- 
 taries embodies the views taken in Gill v. Cubitt; but at 
 that time the present prevailing doctrine had not been re- 
 established, and it is to be supposed that he merely incor- 
 porated in his text the then existing decisions of the Eng- 
 lish courts.^"* But both upon principle and authority, it is 
 safe to say that the experience of the commercial world, 
 and of the courts before which the doctrines here discussed 
 have so often passed in review, have satisfied jurists, as 
 well as men of business, that the interests of commerce are 
 best subserved by the liberal view which promotes the cir- 
 culation of negotiable instruments; and that the bona fides 
 of the transaction should be the decisive test of the holder's 
 rights. ^^ It is not the duty of parties about to purchase 
 negotiable paper to make any inquiries not required by 
 good faith, as to possible defenses of which they have no 
 notice, cither from the face of the paper, or facts commu- 
 nicated at the time.^^ 
 
 In a case before the United States Supreme Court, Mr. 
 Justice Swayne, who delivered the opinion, disapproved 
 Gill V. Cubitt, 3 B. & C. 4GG, and quoted with approval 
 Goodman v. Harvey, 4 Ad. S: El. 870, in which Lord Den- 
 ham said: "I believe we are all of opinion that gross neg- 
 ligence only would not be a sufficient answer where the 
 party has given a consideration for the bill. Gross negli- 
 gence may be evidence of mala fdef^, but is not the same 
 thing. "We have shaken off the last remnant of the con- 
 trary doctrine. Where the bill has passed to the plaintiff 
 
 93 See cases cited in support of both views, Daniel on Negotiable 
 Instruments, § 77"). 
 »4 3 Kent Comm. 10.3, 104. 
 
 95 Hamilton v. Vought, 34 N. J. L. 187. 
 
 96 Murray v. Beekwith, 81 111. 43; Houry v. Eppinger, 34 Mieh. 29.
 
 g 230. WHAT CONSTITUTES A IJONA FIDE HOLDER. 1-15 
 
 without any pro(jf of bad faitli lu him, there is no objection 
 to his title." «^ 
 
 § 230. What is meant by valuable consideration. — The 
 purchaser must have actjuired the instnnnent for u valuable 
 consideration.**** In some cases it is said that the holder 
 must have parted with " full value," sometimes '' fair 
 value," and sometimes the expression " for value " is used. 
 In Xew York it has been said that " the. consideration 
 for the transfer must be full and fair as well as valuable," 
 while in another it is said that " when a parting with value 
 is proved, the amount of the consideration is not otherwise 
 important than as bearing on the question of actual or con- 
 structive notice." ^^ This latter view seems to us the correct 
 one. The o-wTier of a bill or note has as much nght to sell 
 it as he has to sell his horse. The prior parties, by making 
 it negotiable, have warranted the right of the payee or in- 
 dorsee to make title to another. 
 
 And if he does so at any price, the holder acquires full 
 
 rights and interests in the instrument as against all parties, 
 
 unless he had notice of defects, or willfully abstained from 
 
 inquiry under circumstances which justify the imputation 
 
 . of bad faith. 
 
 §231. When price paid conveys notice of fraud. — The 
 price at wliich the paper is offered may amount prima facie 
 to notice, and create the presumption of bad faith in the 
 purchaser. If a person were to offer a fine horse for sale 
 for five cents, the very nature of the offer would warn the 
 purchaser that he acted at his peril. And so if the amount 
 which the holder offers to take for a negotiable instrument 
 is totally insignificant as compared to its face value, it might 
 be under the circumstances implied notice that there was 
 something wrong about it; and if he took it without in- 
 quiry, he should not be protected. There is? no conflict be- 
 tween this view and the cases whioh hold that gross negli- 
 
 OT^rurray v. Lardner, 2 Wall. 710. 
 OS See ante. §§ nO-lir>. 
 
 osGolflsmid v. Lewis County Bank. 12 Barb. 410: Ooiilil v. Segee, 5 
 Duer, 370: Daniel on Negotiable Instruments, § 777. 
 
 10
 
 14G KIGHTS OF A BONA FIDE IIOLDEK. 
 
 232. 
 
 gence will not of itself be sufficient to impeach the liolder's 
 <n- purchaser's title. This is not merely gross negligence, 
 but may be regarded as willfid or fraudulent blindness, and 
 abstinence from inquiry, so great as to* amount to evidence 
 of bad faith. For it is the obvious suggestion of reason 
 that a bona fide owner would not throw away his property 
 for a mere song, and that the purchaser acted in bad faith 
 wl.en he acquired it for conq)aratively nothing.' 
 
 § 232. Line of demarcation between negligence and notice. — 
 It is difficult, indeed impossible, to lay down the exact line 
 of demarcation and state what proportion the amount paid 
 must bear to the face of the paper in ordei' to charge the 
 purchaser prima facie with notice, or raise the presumption 
 of bad faith on his part. But, in general terms, it may be 
 said that the consideration should be so utterly trifling as 
 to bear upon its face the impress of fraud to leave open n'o 
 reasonable conjecture but* that the purchaser must have 
 known, from the very nature of the facts, that they could 
 not have originated fi'om any but a corrupt source.^ The 
 known solvency of prior parties would of course strengthen 
 the argument of implied notice and bad faith wherever they 
 were alleged. If the amount paid for the paper were not so 
 insignificant as, per se, to charge the transferee with notice, 
 it might still be so inadequate as to be a pregnant fact 
 to be given due consideration in connection with others, in 
 determining whether he should be so chargeable or not.^ 
 As said in Rhode Island by Potter, J. : " The fact that the 
 plaintiff purchased the note for a sum much below its face, 
 even if he did not know of any equities between the original 
 parties, might be a circumstance tending to show that he 
 had willfully shut his eyes to the means of knowledge of the 
 facts." ^ 
 
 I.Johnson v. Butler, .31 La. Ann. 776; Smith v. Jansen, 12 Nebr. 125; 
 Richmond v. Diefondorf, .58 N. Y. Supp. 5.38. 
 
 2 Daniel on Negotiable Instruments, §§ 79.5, 796. 
 
 3 Chouteau v. Allen, 70 Mo. 341. 
 
 4:\Iillard v. Barton, 13 R. I. GIO; Daniel on Negotiable Instruments, 
 S 779.
 
 §233. WHAT CONSTITUTES A Ito.NA IIDK IIOI.DKK. 117 
 
 § 233. The apparent purchase must have been a purchase 
 in fact, and not a mere bookkeeping entry. — ^Icre (iiscouiit 
 and credit do not of themselves constituto a hoia fide pur- 
 chaser for value. To occupy that position the holder must 
 actually have parted with soiiu; tiling of value for the note. 
 Thus, where a bank discounted a note for a company, and 
 credited it with the amount, the credit, on account of other 
 deposits, subsequently increasing, so that at the time of suit 
 on the note the bank had actually paid notlnng for it, it was 
 held not a purchaser for value, and that its remedy was to 
 tender the note back to the company, and cancel the credit.^ 
 
 § 234. When taken as collateral security for debt con- 
 tracted at the time. — \Yhen the bill or note of a third party, 
 payable to order, is indorsed as collateral security for a debt 
 contracted at the time of such indorsement, the indorsee 
 is a bona -fide holder for value in the usual course of busi- 
 ness, and is entitled to protection against equities and offsets 
 and other defenses available between antecedent parties — 
 provided, of course, that the bill or note transferred as col- 
 lateral security is itself at the timo not overdue. And the 
 same principle applies wdiere the collateral bill or note is 
 payable to bearer, and is transferred to the creditor by de- 
 livery. Tliis doctrine rests upon clear grounds. There is an 
 evident ])resent consideration for the, transfer of the collat- 
 eral bill or note; a present change in t\\e legal rights of the 
 parties. And the text-writers, supported by an almost un- 
 broken train of decisions, agree that the indorsee is entitled 
 to protection to the extent of the debt secured." 
 
 An4 likewise, when the debt is not yet due and the col- 
 lateral l>ill or note is indorsed as security and there is an 
 agreement for delay until the collateral shall mature, such 
 
 f> Mainifiu-turcis' Nat. Hank v. Xi'wcil, 71 Wis. ,312; Dressor v. M. & 
 I. R. Co., 9:5 U. 8. !)2; Lancaster County Nat. Bank v. Huver, 114 Pa. 
 St. 21G. 
 
 fl Texas Banking Co. v. Turnley, (il Tex. 309; Best v. Crall, 23 Kan. 
 482; Miller v. Boykin. 70 Ala. 47().
 
 148 EIGHTS OF A BONA FIDE HOLDER. § 235. 
 
 ao-reement by the creditor constitutes a consideration and 
 makes him a hokler for valued 
 
 § 235. When taken as collateral for pre-existing debt. — 
 AVhen there is no express or implied agreement for for- 
 bearance and delay as to the pre-existing debt, the transferee 
 of the collateral caimot be regarded as a bona fide holder 
 for value within the law merchant, unless simply becoming 
 a party to the bill or note transferred as collateral security 
 for the debt, and the existence of the debt, are sufficient to 
 create that relation. Many cases deny that it is. But this 
 alone is, in our judgment, sufficient. The maker has sent 
 out a negotiable contract to pay the bearer or indorsee a 
 certain sum. It has been acquired before maturity for a 
 valuable consideration, and the burden of fixing the liability 
 of the indorser (if any) assumed. The holder is naturally 
 lulled into security and inactivity, by crediting the face of 
 the note ; and he should not be made to suffer by the maker 
 for confidence which his own promise created. In Main- 
 land this subject has been fully considered and the ^dews 
 of the text approved; and so likewise in Indiana, and in New 
 York. 
 
 In the United States Supreme Court the question under 
 consideration was fairly presented, and it was called on to 
 determine whether the transfer of a negotiable note, merely, 
 as collateral security for a pre-existing debt, was such a 
 negotiation as excluded defenses which were available be- 
 tween anterior parties. In the case referred to, it appeared 
 that the Brooklyn City and ]S^ewto^vn K. K. Company exe- 
 cuted and delivered to H. & J. a certain note for the pur- 
 pose only of raising money for the company; and that H. 
 & J. indorsed it in blank, and transferred it as security for 
 a call loan to the National Bank of the Republic. The 
 court sustained the right of the bank to recover against the 
 railroad company, notwithstanding the fact that the trans- 
 action was in New York, in which State the decisions of the 
 courts are, in principle, opposed to such i-ight. And the 
 
 " Daniel on Negotiable Instruments, § 825.
 
 §236. WHAT CONSTITUTES A BONA FIDE HOLDER. 14!) 
 
 opinions of Judges Harlan, Clifford, and Uradley are most 
 learned and able expositions of the subject in all of its rami- 
 fications.^ 
 
 §236. Amount and mode of recovery. — When it appears 
 that the bill or note was acquired by the holder as col- 
 lateral security for a debt, and he is deemed entitled to re- 
 cover upon it, he is still lunited to the amount of the debt 
 which it secures, if there be a valid defense against his 
 transferrer, being regarded as, at all events, a bona fide 
 holder, and entitled to stand upon a better footing only 
 pru tanto.^ Thus such a holder could recover against an 
 accommodation party no more than the consideration 
 actually advanced;^" but in the absence of proof he will be 
 deemed to have advanced the full amount of the paper." 
 In Maryland, however, it has been said in respect to an ac- 
 commodation note, which was transferred as collateral se- 
 curity merely: '' Such being the case, it was clearly incum- 
 bent upon the plaintiff to show what debts were embraced 
 by the security, and the amount due thereon." ^^ Although 
 the debt secured by the collateral be less in amount, yet if 
 there be no defense to the collateral note, the holder may in 
 general recover the full amount, holding the balance as a 
 trustee." If the paper has been pledged to a hona fide 
 pledgee in fraud of the true owner, as the pledgee has only 
 a lien for the amount of his debt, the time owner may, bv 
 paying that debt and discharging tlio lien, repossess himself 
 of the instnmient.^^ 
 
 sMaitland v. Citizens' Nat. Bank, 40 Md. 540; Cmitinontal Nat. 
 Bank v. Townsend, 87 N. Y. 10; Daniel on Negotiable Instruments, §§ 
 831a, 8316. 
 
 !) Handy v. Sibley, 46 Ohio St. 15 ; Duncan & Sherman v. Gilbert, 30 
 N. J. L. 527 ; Fisher v. Fisher, 98 Mass. 303. 
 
 lOMaitland v. Citizens" Nat. Bank, 40 Md. 540; Brown v. Callaway, 
 41 Ark. 420. 
 
 11 Duncan & Sherman v. Gilbert, 30 N. J. L. 527. 
 
 l2Maith\nd v. Citizens" Nat. Bank. 40 Md. 540. 
 
 13 Tooke V. Newman, 75 111. 215. 
 
 n Stoddard v. Kimball, ti Cush. 409; Chicopee Bank v. Chapin, 8 
 Mete. (Mass.) 40.
 
 150 RIGHTS OF A BONA I IDE HOLDER. §§237,238. 
 
 § 237. Ordinary or usual course of business. — The holder 
 must have acquired the paper in the ordinary or usual course 
 of business, by which phrase is meant to describe a transfer 
 according to the usages and customs of commercial trans- 
 actions.^^ Whether or not a transfer in payment of pre- 
 existing debt is of this character, was for a long time ques- 
 tioned ; but the doctrine is now settled that it is.^*' And when 
 the paper is transferred as collateral security for a contem- 
 poraneous or pre-existing debt, there are many variations 
 of the question, and many view^s taken, as to whether or not 
 it is in the usual course of business for a valuable considera- 
 tion, according to the mercantile use of those terms.^^ 
 
 § 238. Transfers which are not in usual course of business. — 
 There are some transfers, however, in which the legal or 
 equitable title to the instrument passes, but which are not 
 in the usual course of business. 
 
 Thus, a receiver appointed by a court, and who comes in 
 possession of a bill or note of a litigant by operation of law 
 acquires no better title than such litigant possessed, for, as 
 said in Xew York, " he acquires title by legal process, and 
 not in the regular course of dealing in conmiercial paper." ^^ 
 The like decision was rendered in Connecticut, in respect 
 to the receivers of assets of a bank, for the benefit of its 
 creditors.^^ So the assignment of a bill or note by opera- 
 tion of a bankrupt or insolvent law, is an instance out of 
 the usual course of commercial business. So also is a trans- 
 fer by the payee or holder to a trustee for the benefit of 
 creditors.^'^ Under statute in the State of Iowa, it has been 
 held, that an indorsement of a note by the sheriff, who had 
 levied upon it, liad the same effect as if made l)y the holder 
 himself. ^^ But if the note levied on were not the property 
 
 i."Kellop{,' V. Curtis, 09 Me. 212; Elias v. Finnegan, 37 Minn. 145. 
 
 16 Ante, § 100; Merchants' Bank v. McClelland, 9 Colo. 611. 
 
 nAnte, §§ 234, 23.5. 
 
 18 Brings V. Mf^rrill, .^S Barb. 379. 
 
 i!< LiU'hfield Bank v. Peck, 29 Conn. 384. 
 
 20 Billings v. Collins, 44 Me. 271; Roberts v. Hall, 37 Conn. 20.5. 
 
 21 Earhart v. Gant, 32 Iowa, 481.
 
 § 23*J. WHAT CONSTITUTES A BONA FIDE HOLDER. 151 
 
 of the debtor, neither the purchaser nor anyone claiming 
 under him could ac(iuire a title by its sale under execution.'"" 
 
 A bill or note in the hands of one not the payee, and 
 unindorsed where it is not payable to the payee or bearer, 
 would bo open to defenses in the hands of the transferee, 
 for such possession and transfer are not in the usual course 
 of business.^' A bill in tlie hands of the drawer, and payable 
 to his order, might be properly acquired from him, and the 
 holder under his indorsement would be protected against 
 defenses, for the acceptor is the primary debtor, and the 
 drawer the original creditor.^ 
 
 § 239. Meaning of term " before maturity." — The holder 
 in order to acijuire a betterright and title to the paper than 
 his transferrer, must become possessed of it before it is over- 
 due. For if it were already paid by the maker or acceptor, 
 and had been left outstanding, it would be already dis- 
 charged, and they would not be bound to pay it again to 
 anyone who acquired it after the period when payment was 
 due. And if it were not paid at maturity, it is then con- 
 sidered as dishonored; and although still transferable in like 
 manner and form as before, yet the fact of its dishonor, 
 which is apparent from its face, is equivalent to notice to 
 the holder that he takes it subject to its infirmities, and can 
 acquire no better title than his transferrer.^ The doctrine 
 applicable to this subject has been admirably stated by Chief 
 Justice Shaw, who says: " AVhere a negotiable note is found 
 in circulation after it is due, it carries suspicion on the face 
 of it. The question instantly arises: Why is it in circula- 
 tion? Why is it not paid? Here is something wrong. There- 
 fore, although it does not give the indorsee notice of any 
 specific matter of defense, such as set-oif, pa\mient, or fraudu- 
 lent acquisition, yet it puts him on inquiry; he takes only 
 such title as the inddrser himself has, and subject to any dc- 
 
 22McCormick v. Williams. 54 Iowa. 50. 
 
 23 Kempner v. Comer, 73 Tex. 201 ; Durein v. ^^oesel^ .30 Kan. 44.3. 
 24Monitt V. Duncan. 7 Heisk. 156. 
 
 asMorpan v. United States, 113 U. S. 500; Speck v. rulhnan Car 
 Co., 121 111. 57.
 
 152 EIGHTS OF A BONA FIDE HOLDER. §§ 240, 241. 
 
 fense which might be made if the suit were brought by the 
 indorser.-' -*^ But there is this limitation to this doctrine: 
 that if the holder acquired the paper after maturity, from 
 one who became a bona fide holder for value and without 
 notice before matunty, he is then protected by the strength 
 of his transferrer's title.^^ 
 
 § 240. When instruments payable on sight or demand 
 deemed overdue. — The test has been well and accurately 
 stated by Parsons in his work on Notes and Bills. He 
 says: "A reasonable time must elapse before mere non- 
 payment dishonors the bill or note. What this time 
 is, has not been and cannot be fixed by any definite and 
 precise rule. One day's delay of paper on demand certainly 
 would not dishonor it; five years certainly w^ould. And in 
 each case, how many days, or weeks, or months are requisite 
 for this effect, must depend upon the test, whether so long 
 a time has elapsed, that it must be inferred from the par- 
 ticular circumstances and the general conduct of business 
 men, both of which should be considered, that the paper in 
 question must have been intended to be paid within this 
 period, and if not paid, must have been refused." ^ 
 
 § 241. Presumption that bill or note is acquired before 
 maturity. — There is always a presumption when the payee's 
 or an indorser's name is indorsed upon the bill or note, that 
 it was done before its maturity; and likewise the presump- 
 tion that the holder acquired the instrument before maturity, 
 whether the legal title be transferable by indorsement, or by 
 delivery merely.^"* Indeed the law -will presume in favor of 
 the holder, according to many authorities, that the indorse- 
 ment or assignment was of even date ^vith the instrument 
 itself ;^^ but it can rarely be the case that any stronger or 
 more definite presumption will be needed than that he ac- 
 quired it before maturity, as he is then protected against 
 
 20 Fisher v. Tveland, 4 Cush. 456. 
 zr Ante, § 201. 
 
 28 1 Parsons on Notes and Bills, 26.3, 264. 
 
 29 New Orleans, etc. v. Montgomery, 0.5 U. S. 16. 
 
 30 Daniel on Xegotiable Instruments, § 728.
 
 § 242. WHAT CONSTITUTES A BONA FIDE HOLDER. 153 
 
 defenses available to his transferrer. We can conceive, how- 
 ever, of cases in which the further presunipticni that the 
 transfer was of even date might be desirable to the holder 
 — as where it were proved that at a certain time after date 
 of the paper he had notice of a defect which would prevent 
 his better title, if it were not then established. 
 
 g 242. Rule as to accommodation paper acquired overdue. — 
 While it is the general rule that if the paper be overdue 
 at the time of the transfer that circumstance of itself is 
 notice, and he can acquire no better title than his indorser; 
 yet, the fact that the paper was executed for accommoda- 
 tion without consideration, and that the indorsee knew it, 
 is no defense even when the paper was overdue at the time 
 of the indorsement, it being considered that parties to ac- 
 commodation paper hold themselves out to the public by 
 their signatures to be bound to every person who shall take 
 the same for value, to the same extent as if paid to him per- 
 sonally.^^ If the holder received the paper after maturity 
 from an indorser who took it bona fide before maturity, 
 there is no question as to his right to recover ;^^ but if he 
 takes it after maturity from the party for whose accommoda- 
 tion it was made, indorsed, or accepted, there is conflict of 
 decision on the subject ;^^ but the doctrine of the text is 
 sustained by the highest authority.^* 
 
 § 243. Rule when instalment of principal or interest is 
 overdue. — If the note be iiavable bv instalments it is dis- 
 honored when the first instalment becomes overdue and un- 
 paid, and he who takes it afterward takes it subject to all 
 equities between the original parties.^^ Whether or not the 
 same rule applies when there is an instalment of interest 
 
 "history on Notes, § 194; Dunn v. Weston, 71 ^le. 270; Davis v. 
 Miller, 14 Gratt. 6. 
 
 32 Howell V. Crane, 12 La. Ann. 12(); Riegel v. Cunningham, Pliila. 
 177; ante, § 201. 
 
 3:5 Chester v. Dorr. 41 N. Y. 270; Simons v. Morris, 5.3 Mich. 1.3.-). 
 
 34 Daniel on Negotiable Instruments, § 726, and cases cited. 
 
 35 Vinton V. King, 4 Allen, 5G2 ; Field v. Tibbetts, 57 Me. 359; Hart 
 V. Sticknev. 41 Wis. 630.
 
 154 KU.IITS OF A BONA FIDE HOLDER. §§244,245. 
 
 overdue and unpaid is a controverted matter. The weight 
 of authority is to the elieot that the bona fide purchaser 
 for vahie of negotiable paper is within the protection of the 
 Liw merchant although interest is overdue and unpaid at 
 the time of the purchase, interest being a mere incident of 
 the debt, and the holder losing no right as against the 
 parties, whether makers or indorsers, by failure to demand 
 it.'"' This seems to be the correct rule, though the contrary 
 view is not Avithout some weighty considerations to support 
 it.^' "Where more than one note is executed upon the same 
 consideration, they are not all to be regarded as dishonored 
 when one is overdue and unpaid. ^^ 
 
 § 244. Transfer on last day of grace.— A purchaser of a 
 negotiable instiniment, before the close of business hours, 
 on the last day of grace, and before its dishonor, has been 
 held, and, as we think, correctly, to be fully protected as 
 having received it while current ;^^ but a contrary view has 
 been taken in Massachusetts.'*'^ 
 
 § 245. " Purchaser without notice." — The holder must 
 have acquired the paper without notice of its dishonor. 
 Sometimes a bill payable at so many days after sight, or 
 after a certain event, is presented for acceptance, and dis- 
 honored before the time of payment by nonacceptance ; and 
 in such cases, the party acquiring it Avitli notice of such dis- 
 honor stands upon the same footing as one who acquires it 
 after maturity, and is chargeable in like manner with con- 
 sti-uctive notice of any flaw in the right or title of his trans- 
 ferrer.'*^ Sometimes the instrument bears upon its face the 
 marks of its dishonor for nonacceptance, and in such cases 
 it ])ears, as has been said, " a death wound apparent on it." ^^ 
 
 -f' National Bank v. Kirby, 108 Mass. 497; Kelley v. Whitney. 45 
 Wis. 110. 
 
 STNTevvell v. Gregg, 51 Barb. 263. 
 
 38 Boss V. Hewitt, 15 Wis. 260; Patterson v. Wright. 64 Wis. 21)1. 
 
 3»Fox V. Bank-. .30 Kan. 442; Bosch v. Gassing, 64 Iowa, 314. 
 
 40 Pine V. Smith, 11 Gray, 38. 
 
 •tl Crossly v. Hani. 13 East, 498. 
 
 42Goodman v. Harvey, 4 Ad. & EI. 870; Bylos on Bills [*160], 283,
 
 § 24G. WHAT CONSTITUTES A 1H)S\ 1 IKK IKd.DKK. 1.j5 
 
 If it has been dishonored for nonpayment when payahh- on 
 doniaiul or at sight, the like rule applies; but it is only when 
 the bill uv note is payable at a day certain that the purchaser 
 can perceive, by the very fact that it is overdue, that it has 
 been dishonored. The United States Supreme Court has 
 observed <»u tins sulgcct that "a person who takes a bill 
 which, upon the face of it, was dishonored, cannot be allowed 
 to claim the ])i-ivileges which belong to a bona fide holder. 
 If he chooses to receive it nnder the circumstances, he takes 
 it with all the infirmities belonging to it, and is in no better 
 condition than the person from whom he received it." 
 
 g 246. Notice of fraud, defect of title, and illegality. — In 
 order to stand upon a better footing than his transferrer, 
 the holder must acquire the instrument without notice of 
 fraud, defect of title, illegality of consideration, or other 
 fact which impeaches its validity in his transferrer's hands; 
 and the word notice in this connection sigTiifies the same as 
 knowledge. Knowledge of fraud or illegality impeaches the 
 hona fides of the holder, or at least destroys the superiority 
 of his title, and leaves him in the shoes of the transferrer."*^ 
 And any fraud upon the transferrer incapacitates the trans- 
 feree or one acqniring from him with notice from recover- 
 ing against the transferrer."*^ 
 
 § 247. Time of notice. — The notice affecting the holder 
 must exist at the time he acquires the paper, for then his 
 relation to it is fixed; and subsequent notice does not affect 
 his title or right to transfer it.*'' If notice of fraud be 
 communicated to the holder before he pays for the paper, 
 although the contract has been entered into, he cannot stand 
 npon the footing of a hona fide holder without notice,"*' and 
 if ho has paid a part of the amount agreed u]ion when he 
 
 43 Andrews v. Pond, 1.3 Pet. G5 ; Anirle v. Insurance Co., 02 U. S. 
 341; District of Columbia v. Cornell, 1.30 U. S. 661. 
 
 44Hanauer v. Doane. 12 Wall. 342; Crampton v. Perkins, G.') Md. 24; 
 Mace V. Kennedy, 68 Mich. 380. 
 
 45 Lenheim v. Fay, 27 Mich. 70. 
 
 4G Perkins v. White. 36 Ohio St. .530. 
 
 47CrandeH v. Vickery, 45 Barb. 156; Davis v. Wait. 12 Oreg. 425.
 
 156 EIGHTS OF A BONA FIDE HOLDEK, § 248. 
 
 receives notice of fraud, he will only be protected to that 
 extent, and no more.""* Actual notice of the defect is not 
 required, where the evidence of the infimiity consists of 
 matters apparent on the face of the instruinent.^^ 
 
 § 248. Notice of accommodation paper. — It is to be ob- 
 served, however, that knowledge of the mere want of con- 
 sideration as between the original parties will not alone pre- 
 vent the purchaser from becoming a bona fide holder and 
 occupying a better position than his transferrer. Accommo- 
 dation paper is daily placed in market for discount or sale, 
 and an indorsee or purchaser who knows that a bill or note 
 still current was drawn, made, accepted, or indorsed without 
 consideration is as much entitled to recover as if he had 
 been ignorant of the fact,^*' and even where he acquires it 
 overdue. ^^ jSTor is it a good ground of defense against a 
 ho7}a fide holder for value that he was informed that the 
 note was made or the bill accepted in consideration of an 
 executory contract, unless he was also informed of its 
 breach.^^ If he has such knowledge he cannot recover.^^ 
 And if anyone purchase accommodation paper with knowl- 
 edge that the tenus and conditions on which the accommo- 
 dation was given have been violated, he is not a bona fide 
 holder as against the party who lent his name for accommo- 
 dation.^* The defense must not only show that the paper 
 was diverted from its purpose, but also that such diversion 
 
 48 Dresser v. M. & I. R. Co., 93 U. S. 93; Wearer v. Harden, 49 N. Y. 
 286. 
 
 impost, § 251. 
 
 r>0 Thatcher v. West River Nat. Bank, 19 Mich. 202; Stephens v. 
 Monongahela Nat. Bank, 87 Pa. St. 163; Powell v. Waters, 17 Johns. 
 176. 
 
 51 Ante, § 205. 
 
 52 Patten v. Gleason, 106 Mass. 439; Bank v. Cason, 39 La. Ann. 
 867. 
 
 53 Wagner v. Diedrich, 50 Mo. 484; Bonmati v. Van Kuren, 29 Wis. 
 
 218. 
 
 54 Buchanan v. Findley, 9 B. & C. 738 ; Daggett v. Whiting, 35 Conn. 
 372.
 
 § 24^9. WHAT CONSTITUTES A BONA FIDE HOLDER. I'tl 
 
 was known to the holder when he received it, misapplica- 
 tion not being such fraud as shifts the burden of proof.'"'' 
 The rule in New York is different, and there it is held 
 that a diversion is such fraud as sliifts the burden of proof 
 upon the holder.'**' 
 
 § 249. What amounts to diversion of accommodation paper. 
 — it is inunaterial that paper executed or indorsed for 
 accommodation is not used in precise conformity with agree- 
 ment, when it does not appear that the accommodation 
 party had any interest in the manner in which the paper was 
 to 1)0 applied. No change in the mere mode or plan of rais- 
 ing the money, though not applied to the pui'pose intended 
 by the accommodation party, will constitute a misappropria- 
 tion. In order to constitute a misappropriation, there must 
 bo a fraudulent diversion from the original object and de- 
 sign; and it is now well settled that where a note is indorsed 
 for the acconmiodation of the maker, to be discounted at 
 a particular bank, it is no fraudulent misappropriation of 
 the note, if it is discounted at another bank or used in the 
 payment of a debt or otherwise for the credit of the maker.°" 
 If the note has effected the substantial puq^ose for which 
 it was designed by the parties, an accommodation maker or 
 indorser cannot object that the accommodation was not 
 effected in the precise manner contemplated, where there is 
 no fraud, and the interest of the indorser is not prejudiced.^^ 
 
 § 250. Express notice. — It is quite certain that if the 
 notice or knowledge of the transferrer's defective title be 
 express, it will destroy the purchaser's better position; for 
 if he is actually informed of the inhnnity — as when he is 
 told by the maker that it is without consideration, and that 
 it will not be paid — he errs willingly if he perseveres in 
 
 55 Stoddard v. Kimball, G Cush. 469; Clark v. Thayer. 105 Mass. 216; 
 Gray v. Bank of Kontucky. 29 Pa. St. 365. 
 
 56 Farmers and Citizens' Nat. Bank v. Noxon. 45 X. Y. 7G2. 
 
 57 Frank v. Quast, 86 Ky. 652; Morris v. Morton, 14 Nebr. 360. 
 
 58 Duncan & Sherman v. Gilbert. 29 N. .T. L. 521; Briggs v. Boyd, 
 37 Vt. 538; Wardell v. Howell. 9 Wend. 170.
 
 158 EIGHTS OF A BONA FIDE HOLDER. § 251. 
 
 negotiating for the paper, and lias no claim whatever for 
 peculiar protection. 
 
 § 251. Implied or constructive notice from appearance of 
 the paper. — Express notice is not indispensable. There may 
 be evidence of the inlirmity in the paper apparent on its 
 face, or such indications as to put the purchaser upon in- 
 quiry. And in such cases constructive notice is held suffi- 
 cient upon the ground that when a party is about to perfonn 
 an act which he has reason to believe may affect the rights 
 of third persons an inquiry as to the facts is a moral duty, 
 and diligence an act of justice.*''^ In Connecticut the un- 
 usual character of the instiimient — its being written on 
 tracing paper, coupled with suspicious circumstances in the 
 negotiation — was held to authorize inquiry of a broker 
 " whether a banker or a broker would discount a note of 
 that character A\dthout a mllful failure to inquire into the 
 circumstances under which it was obtained," with a view 
 to impeaching the good faith of the transaction,^^ And so 
 in New York, an unsigned blank left for signature was held 
 to affect the purchaser with notice of the defect.*'^ A line 
 dra"UTi over the words " or order " and a memorandum 
 written on the paper, '' this note is not negotiable," would 
 of course notify the purchaser.''^ 
 
 In Maryland the doctrine of notice was applied to the 
 case of a note payable to a certain person as " Trustee," 
 and indorsed in the same style by the trustee, who sold the 
 note and appropriated the proceeds; and the court held 
 that the word " trustee " put the purchaser upon inquiry, 
 and that he could not trace title as against the maker 
 through such an indorsement, as the trustee had no power 
 to dispose of the trust subject for his own benefit.'''^ 
 
 59Xorvill V. Iludpins, 4 Munf. 49G ; Gilman v. New Orleans R. Co., 
 72 Ala. 581. 
 
 60 Davis Machine Co. v. Best, 105 N. Y. .59; Hamilton v. Wilson, 67 
 Ga. 498; Angle v. Insurance Co., 92 U. S. 342. 
 
 61 Rowland v. Fowler. 47 Conn. 347. 
 
 62 Davis Machine Co. v. Best, 105 N. Y. 59. 
 
 6;; Prins v. So. Branch Lumber Co., 20 111. App. 236. 
 G4 Third Nat. Bank v. Lange, 51 Md. 138.
 
 §252. ^V1IAT CONSTITUTES A BONA FIDE llOLDEK. l.'.'J 
 
 § 252. Constructive notice from extrinsic circumstances. — 
 The circiiinstaiu-es of tlie traiisuction may be of such a char- 
 acter as to intimate strongly a defect in the title, and if 
 they are such as to invite inquiry they will suffice, provided 
 the jury think that abstinence from inquiry arose from a 
 belief <»r suspicion that inquiry would disclose a vice in the 
 paper. ^'•''' Then indeed his bona fides Avould be impeached. 
 But further than this, gross negligence, w^hich is not in itself 
 proof of mala fides, may be so great as to amount to proof 
 of notice. " I agree," says Baron Parke, '' that notice and 
 knowledge mean not merely express notice, but knowledge 
 or the means of knowledge to which the party willfully shuts 
 his eyes." ^^ 
 
 § 253. Particular and general notice. — It is quite clear and 
 well-settled that the purchaser need not have notice of the 
 particular fraud, or equity or illegality, in order to be af- 
 fected by it. It is sufficient that there be notice, actual or 
 constructive, that there is some fraud, or equity or illegality 
 affecting the original parties. " Thus, if when he took the 
 bill he were told in express terms that there was something 
 wrong about it, without being told what the vice was, or if 
 it can be collected by a jury, from circumstances fairly war- 
 ranting such an inference that he knew, or believed, or 
 thought that the bill was tainted with illegality or fraud, 
 such a general or implicit notice wall equally destroy the 
 title." ""^ So if he knows that the maker denies liis liability 
 or refuses to acknowledge it.^* 
 
 § 254. Circumstances constituting notice. — Xotice of fraud, 
 or defect of title, or of defense valid between prior parties 
 may be derived from circumstances, and be as effectual as 
 personal observation, or hearing of the facts in question. 
 
 05 Hulbort V. Douglass, 94 N. C. 122; Bank of Hamburg v. Flynn, 38 
 Fed. 708 ; Ormsbee v. Howe, 54 Vt. 182. 
 
 efi^ray v. Chapman, Ifi AI. & W. ?,r^r,. 
 
 OTByios on Bills [*linL 220; Oakley v. Ooddeen, 2 F. & F. 6.39; 
 Henry v. Sneed, 99 Mo. 422. 
 
 68Boyce v. Geyer, 2 Mich. N. P. 71; Studebaker v. Manufacturing 
 
 Co., 70 Mo. 274.
 
 1(J0 EIGHTS OF A BONA FIDE HOLDER. § 255. 
 
 Thus, where the assignee of a note, at the time of assign- 
 ment, requests and receives, as security from the transferrer, 
 a conveyance of land for the purchase money of which the 
 note is given, ^\'ith a provision in the deed that the assignee 
 is to comply with the tenns of the contract of sale to the 
 prior purchaser, the assigiiee will be chargeable with notice 
 of the character of the note.^ Mere proof of an advertise- 
 ment in a newspaper cautioning parties against purchasing 
 a bill or note, even when made in the place of residence of 
 the purchaser, is not of itself sufficient to show notice to 
 the purchaser of any fraud affecting its validity.'^^ 
 
 § 255. Notice to agent. — It is a general principle of law 
 that notice to an agent is notice to the principal, and there- 
 fore if the holder in taking the bill employs an agent, 
 though he be unaffected with notice to himself personally, 
 yet notice to the agent so employed, express or implied, is 
 notice to the holder."^^ And notice to a snbagent whose 
 appointment has been authorized by the principal is equally 
 notice to the principal.'^" But this rule is subject to the 
 qualification that the knowledge of the agent, in order to 
 affect his principal, should either have been acquired in the 
 same transaction, or at least so recently as that it may be 
 presumed to have remained in his memory; and it must be 
 knowledge of a fact material to the transaction, and wliich 
 it would be the duty of the agent to communicate to his 
 principal."^^ That the principal is bound by such knowledge 
 or notice as his agent obtains in negotiating the particular 
 transaction is everywhere conceded. Constructive notice to 
 an agent is not to be extended.''^^ Notice to the active man- 
 aging officers of a corporation is notice to the corporation 
 itself. It is immaterial what the official position may be if 
 
 6!) Packwood v. Gridlcy, .39 111. 383. 
 'f>Ke]lof^g V. French, 14 Gray, 354. 
 
 '1 Story on Agency, § 140; Varnum v. Milford, 4 McLean, 93; Henry 
 V. Sneed, 99 Mo. 423. 
 
 72 Boyd V. Vanderkemp, 1 Barb. Ch. 273. 
 
 73 The Distilled Spirits, 11 Wall. 3G6; Le Neve v. Le Neve, 2 Lead. 
 Cas. in Eq. 179. 
 
 74Wyllie V. Pollen, 32 L. J. Ch. 782.
 
 §255. WHAT CONSTITUTES A 150NA F1I>K llOI.DKi;. Hll 
 
 the person is actively enguj^ed in tho nianageiueut of its 
 interests.'''"' The mere fact, however, that the cashier of a 
 bank is a stoekholdm- and director of a coq)oration which is 
 the payee and indorser of a note, will not charge the hank 
 with notice of (■(piities against the corporation, when it ap- 
 ])ears that the cashier has no duties to perform with refer- 
 ence to the note as director of the company, and no actnal 
 notice of such equities.'^" Notice to, or knowledge of, one 
 member of a partnership is notice to all of its members." 
 
 75 National Bunk v. llowe, 40 Minn. .390; New England Mortgage Co. 
 V. Oay, .3.3 Fed. O^C. 
 
 76 First Nat. Bank v. Loyliod, 'iS Minn. :VM; Wilson v. Second Nat. 
 Bank. Cent. 7oG. 
 
 77 Bigelow V. Henringer, 33 Kan. 362. 
 
 11
 
 BOOK IV. 
 
 FIXING LIABILITY TO PAY THE INSTRUMENT. 
 
 CHAPTEli X. 
 
 PRESENTflENT FOR ACCEPTANCE, AND ACCEPTANCE. 
 
 SECTION I. 
 
 ■WHAT BILLS OF EXCHANGE SHOULD BE PRESENTED FOR AC- 
 CEPTANCE. 
 
 § 256. General principles. — The subject-matter of this 
 chapter appHes only to bills of exchange, foreign and inland. 
 The law of presentment for acceptance and of acceptance can 
 have no apphcation to a negotiable contract, where, from 
 its nature, there is or can be no acceptor. The certification 
 of checks, however, is closely allied to the subject of present- 
 ment for acceptance, and acceptance. This subject has been 
 fully treated in a preceding chapter.^ It is the right 
 of the holder of a bill to present it for, and insist on its, 
 acceptance, even so late as the day before it falls due. If 
 not presented for acceptance until the day it falls due, the 
 right to demand acceptance becomes merged in the right to 
 demand payment. If the bill be presented for acceptance 
 before it falls due, it becomes dishonored if acceptance be 
 refused; and notice must be forthwith given to the parties 
 whom it is intended to charge. And suit may at once be 
 instituted against the drawer, and against the indorser?.^ 
 
 ^ Ante, §§ .^^-38. 
 
 2 Towmsley v. Sumrall, 2 Pet. 170; Landrum v. Trowbridge, 2 Mete. 
 (Ky.) 281: Xational Bank v. Gunhouse, 17 R. C. 406; Woodward v. 
 Row, Keb. 132. 
 
 [162]
 
 g 257. BILLS KEQUIUIXG PRESENTMENT. 
 
 103 
 
 This rule of c(jiuincrcial law is so general aiul binding that 
 a statute of a iState which forbids a suit from being brought 
 in such a case nntil after the maturity of the bill, can have 
 no elfect iii)<)U suits brought in the Tnited States courts. 
 The requisition of a State statute like this would be a vio- 
 lation of the general commercial law, which a State has no 
 power to im])ose, ;iiid which the courts of the United States 
 would be bound to disregard. So also if tlio State statute 
 seeks to make the right of recovery, in a suit brought in 
 case of nonacceptance, dependent upon proof of subsequent 
 presentment, protest, and notice for nonpayment.^ 
 
 § 257. What bills must be presented for acceptance. — Bills 
 payable on demand or at sight without grace (which are im- 
 mediately payable on presentment), or payable at a certain 
 number of days after date, or after any other certain event, 
 or payable on a day certain, need not be presented, for 
 acceptance at all, but only for payment. And the fact that 
 such bills are payable at a bank, or other particular place, 
 does not alter the rule on the subject."* But it is usual and 
 best, when the bill is payable at a future day, to present it 
 for acceptance, in order to ascertain whether it will cer- 
 tainly be honored, and to procure the assurance of the ac- 
 ceptor's liability.^ And in such cases, if acceptance be re- 
 fused, the holder must make protest, and give notice in the 
 same manner as if the bill were payable at so many days 
 after sight.*^ There are, however, three exceptions to this 
 general rule that it is not necessary to present a bill payable 
 at a fixed time for acceptance, but only at nu^turity for pay- 
 ment: First, when there is an express direction to the 
 payee or holder of a bill ; second, when it is put into the 
 hands of an ngent for negotiation; and, third, where the 
 drawer and drawee are either the same person, or the drawer 
 is a member of the firm or connected with the corporation 
 
 3 Watson V. Tarpley, 18 How. 517. 
 
 4 Bank of Washinfrton v. Triplott. 1 Pet. 25; Townley v. Sumrall, 2 
 Pet. 170. 
 
 5 United States v. Barker. 4 Wash. C. C. 464; Story on Bills. § 288. 
 
 6 Allen V. Suydani, 20 Wend. 321 ; Landrum v. Trowbridge. 2 Mete. 
 (Ky.) 281: Pliilpott v. Bryant. 3 Car. & P. 244.
 
 104 PKESEXTMEXT FOK ACCEl'TAXCE. § 258. 
 
 which is the drawee. Thus, a bill drawn without being ad- 
 dressed to any drawee, or drawn by a j^arty npon himself, 
 or by a partner upon the finn of which he is a member, for 
 partnership purposes. A bill drawn by the president of a 
 cor]>oration in its behalf, on the treasurer thereof, would be 
 a bill dniwn by the corporation on itself, and hence not 
 need acceptance.' 
 
 Bills payable at sight, or at so many days after sight, or 
 after demand, or after any other event not absolutely fixed, 
 must be presented to the drawee for acceptance and pay- 
 ment, or for acceptance only, without unreasonable delay, or 
 the drawer and indorsers will be discharged, for they have 
 an interest in having the bills accepted immediately in order 
 to shorten the time of payment, and thus put a limit to the 
 period of their liability; and also enable them to protect 
 themselves by other means before it is too late, if the bill is 
 not accepted and paid ^^^thin the time originally contem- 
 plated by them.^ When the words " acceptance waived " 
 are embodied in a bill, the ordinary proceedings in accept- 
 ance are dispensed with, and merged into those of payment 
 or nonyiaymont.^ 
 
 ^ 258. When drawer of bill requiring presentment for ac- 
 ceptance bound without such presentment. — Presentment to 
 the drawee, it has been held, is necessary, even though the 
 drawer has requested him not to accept ;^^ but the holder is 
 not bound to present again after refusal to accept and notice 
 given, even though the drawer requests him to do so, and 
 promises that the bill shall be honored.^^ 
 
 T]i(> only cases in which the holder of a bill which, ac- 
 cording to its tenor, should be presented for acceptance, can 
 charge the drawer without presenting it for acceptance, 
 
 7 Daniel on Negotiable Instruments, § 465. 
 
 8 Bell V. First Nat. Bank, 115 U. S. .370; Mitchell v. De Grand, 1 
 Mason, 176; Robinson v. Ames, 20 Johns. 146. 
 
 9 Carson v. Russell, 26 Tex. 472: English v. \Yall, 12 Rob. (La.) 132; 
 Webb V. Mears, 9 Wright, 222. 
 
 10 Hill V. Heap. Dowl. & R. N. P. 57; 1 Par.sons on Notes and Bills, 
 388. 
 
 n Hickligg V. Hardey, 7 Taunt. 312.
 
 §259. BY AND TO WHOM I'K'KSENTMEXT .MADK. l05 
 
 arise when the. relations between the drawer and drawee 
 are such as to constitute the drawing of the bill a fraud 
 upon the hohler.^- When the bill is presented the accept- 
 ance must be according to its tenor to pay in money. If it 
 be to pay by anotlicr ]»ill, it is no acceptance, and the bill 
 should be protested.^' 
 
 SECriOX IT. ■ 
 
 BY AM) TO WHOM PRESENTMENT SHOULD BE MADE. 
 
 §259. By and to whom; general rule. — The bill must be 
 presented by the holder or his authorized agent, and to the 
 drawee or his authorized agent. 'Jlie party in possession 
 of the bill is \rith ostensible legal title thereto, presmned 
 to be the holder, and to have the right to make presentment 
 for acceptance or payment. ^^ The drawee may accept with- 
 out risk, and if he refuse, the protest ^rill inure to the bene- 
 fit of the rightful holder. ^^ If the drawee cannot be found, 
 and any person has been indicated to be resorted to in 
 case of need (au hesoin), the bill should be presented to that 
 person. ^^ 
 
 If the ]»ill be drawn upon two persons not partners, it 
 seems that it must be presented to both, if not paid by the 
 first ;^" but this has been doubted, for the reason that the 
 holder would not be bound to take the single acceptance of 
 the other; and if he did, it would be at his ovm risk, if the 
 bill were not protested.^'* But if the bill be dra%\ni upon a 
 firm, presentment to any partner is sufiicient,^^ and the- fact 
 
 12 Bank of Washington v. Triplett, 1 Pet. 25; Smith's Mercantile 
 Law (HolcomlH' & Cholson's ed.). 304. 
 
 13 Russell V. Pliillips, 14 Q. H. 891. 
 
 14 Rank of Utica v. Smith. 18 Johns. 230; Freeman v. Bovnton, 7 
 Mass. 483 ; Agnew v. Bank of Gettysburp, 2 Harr. <fe Gill, 478. 
 
 ISChitty on Bills (13th Am. ed.). 311. 
 
 i« Story (m Bills. § 220; towards on Bills, 402. 
 
 17 Willis V. Green, .5 Hill, 2.32; Story on Bills, § 229. 
 
 18 Story on Bills. § 229, note 9. See Harris \. Chirk. 10 Ohio. 5; 
 Greenoufih v. Smead. 3 Ohio St. 41.5. 
 
 lOGreatlake v. Brown, 2 Crunch C. C. 541; Holtz v. Boppe, 37 N. Y. 
 634.
 
 IGG PUESEXT.MEXT lOU ACCEPTANCE. §g 260, 261. 
 
 tluit the firm has been dissolved by bankruptcy does not 
 render it necessary to present the bill to both.^' 
 
 § 260. Presentment to agent of drawee. — The holder or 
 his ai;eut must be careful, when he does not find the. drawee 
 in person, to assure himself that the party to whom he 
 presents the bill for acceptance is his authorized agent. 
 And though in the case of a presentment for payment it 
 may suffice to demand payment at the residence of the 
 acceptor, yet in case of a presentment for acceptance, the 
 holder must endeavor to see the drawee or his authorized 
 agent, personally. And, therefore, where in an action 
 against the drawee on a refusal to accept, it appeared that 
 the witness had carried the l)ill to a place which was de- 
 scribed to him as the drawee's house, and that he offered it 
 to a person in a tanyard, who refused to accept it; and the 
 ■\\dtness did not know the drawee's person, nor could he swear 
 that the person to whom he offered the bill was he, or repre- 
 sented himself to be so, it was held that the evidence of 
 presentment to the drawee for acceptance was insulficient.^^ 
 In accordance with the principles stated, it may be added 
 that there is no doubt that a clerk found in the drawee's 
 counting-room is a competent person to whom the bill can 
 be presented, and his refusal to accept is, in law, the refusal 
 of the drawee.^ 
 
 §261. Presentment in case of drawee's death. — In the 
 event the drawee be dead at the time the bill should be 
 presented for acceptance, the most that could be expected 
 of the holder would be that he should inquire after the 
 personal representative of the deceased drawee, and if he 
 live within a reasonable distance, present the bill to him. 
 Chitty and Byles both give their indorsement to this proposi- 
 tion.^ But some of the best text-writers, as well as many 
 of the cases, state that the holder is not bound to present 
 
 20 Gates v. Beecher, 60 N. Y. 523. 
 
 21 Cheek v. Roper, o Esp. 175. 
 
 22 Daniel on Xe^otiahlp Instrunients, § 457. 
 
 2.-5 0111117 on Bills [*280], 318; Byles on Bills [MTT], 303.
 
 § 262. WlIKia;, and IKJW, i'I£ESENTMP:NT MADK, 107 
 
 the bill to the executor or the administrator of the drawee.'"* 
 In any event, the holder has the right, and it l)ecoraes his 
 duty, to protest the bill for iionacceptauce, if there be, at 
 the time of presentment, no executor or administrator of the 
 deceased drawee. It should be observed, in this connection, 
 that an acceptance by the personal representative of the 
 drawee is binding- upon the representative individually, and 
 not in his ofhcial character, and further, that the holder is 
 not obliged to receive the acceptance of the executor or 
 administrator at all. Upon sound principle, therefore, it 
 should follow that if the drawee be dead, the holder 
 should have the right, and he impressed 'vHtli the duty, of 
 protesting the bill \\'itliout any i)resentment to the personal 
 representative. 
 
 SECTION III. 
 
 THE PLACE WHERE, AND HOW, PRESENTMENT SHOULD BE 
 
 MADE. 
 
 § 262. Sergeant Onslow's act. — It was at one time a ques- 
 tion much litigated in England, whether, if a bill payable 
 generally — that is, without specification of a ])Iace of pay- 
 ment — ■ was accepted payable at a particular place, such 
 an acceptance was a qualified one. It was decided in the 
 House of Lords (contrary, however, to the opinion of eight 
 of the twelve judges to whom the question was referred), 
 that such an acceptance was a (qualified one, and that a de- 
 mand at the particular place named was a condition precedent 
 to a recovery against the acceptor, as well as against the 
 drawer and indorser.^ This decision led to the passage of 
 the statute of 1 and 2 George IV., chap. 78 (called Sergeant 
 Onslow's act), in which it was recited that the practice and 
 understanding of merchants had been different; and enacted 
 that an acceptance payable at a particular place ^^^thout 
 further expression, should not be deemed a conditional ac- 
 ceptance; but if it were payable at a specified place "only, 
 
 24 Edwards on Hills. 401, 4r-,A. nnto 2. 
 s-"-' Rowe V. Younji. 2 Brod. & 15. 165.
 
 168 PRESENTMENT FOR ACCEPTANCE. §§ 263, 264. 
 
 and not otherwise, or elsewhere," it should be deemed con- 
 ditional. "'" 
 
 vj 263. American statutes and decisions as to place of pre- 
 sentment for acceptance. — in many of the States of the 
 United States the English statute has been substantially 
 enacted; and the courts, with few exceptions, have, inde- 
 pendently of statute, followed the judgment of the eight 
 judges against the House of Lords. Therefore, by the 
 American law, it is settled that demand of payment at the 
 place specified need not be averred by the plaintiff; but if 
 the acceptor was at the place at the time specified, and 
 ready to pay the money, it was a matter of defense to be 
 pleaded on his part'; which defense, however, is no bar to the 
 action, but goes only in reduction of damages, and in pre- 
 vention of costs.^ 
 
 § 264. Eesidence, or place of business. — The presentment 
 of the bill or note for acceptance should be at the place 
 of the domicile of the drawee, whether it be payable gen- 
 erally, or at a particular place — the place of payment being 
 immatei-ial until after acceptance.^^ If the drawee has re- 
 moved liis residence from the place to which it is addressed 
 — or really resided at a different place — the bill should be 
 presented at his new or real place of domicile, if the holder 
 can ascertain it by diligent inquiries. If by such inquiries 
 the drawee's place of domicile cannot be ascertained, or if 
 he has absconded, the bill may be treated as dishonored.^® 
 If the drawee has his dwelling-house in one part of the town 
 or city, and his place of business at another, it may be made 
 at either place; and if the drawee resides in one town, and 
 has his place of business at another, the holder may present 
 the bill at either. •'^^ 
 
 2«Danipl on Negotiable Instruments, § 456. 
 
 27 1 Parsons on Notes and Bills, 305-,311; Story on Bills, §§ 355-357; 
 Edwards on Bills, 426, 428. 
 
 28Chitty on Bills (13th Am. ed.), 316. 
 
 29 Anderson v. Drake, 14 .Johns. 114; Freeman v. Boynton, 7 Mass. 
 483. 
 
 •w Story on Bills, § 230.
 
 §§ 2G5-2G7. Tl.MK Of I'KKSKNTMK-NT. 1G9 
 
 g 265. How presentment for acceptance should be made. — 
 Tho holder of tlic bill should have it in his po.ssessiou, umke 
 an actual exhibit of it to the drawee, and re(iuest its accejjt- 
 ance."" " The term presentment iuiiwrts not a mere notice 
 of the existence (d' a draft which the party has in his 
 possession, but the exhibiting of it to the person on whom 
 it is drawn, that he may see the same, and examine his 
 accounts or correspondence, and judge what he shall do; 
 whether lie sliall accept the draft or not." •'" 15iit while it 
 is better in all cases to avoid all question by observance of 
 tho formality indicated the drawer and indorsers may be 
 charged by due protest and notice where the bill is not thus 
 actually exhibited to the drawee, but he is enabled by seeing 
 it or otherwise to give, and does give, an intelligent response 
 to the request to accept it.^^ 
 
 § 266. Production of bill. — If the holder does not produce 
 the bill, the drawee may require him to do so, and decline 
 accepting, save in the proper form by writing his name on 
 its face; and then unless the holder produces it the drawer 
 cannot be charged with the jtenalties of nonacceptance ; but 
 if the drawee makes no such rccjuirement and does what is 
 equivalent to acceptance he cannot aftenvard refuse to be 
 held on the ground that he did not see the bill.^^ 
 
 If the holder leave the bill Avith the acceptor, and by his 
 negligence enable a third party to get possession of it, he 
 cannot hold the acceptor liable in an action of trover.^^ 
 
 SECTIOX IV. 
 
 Ti:\rE OF PRi:sKXT.NrKXT FOR ACCEPTAXCE. 
 
 ^ 267. Time of day for presentment for acceptance ; business 
 hours. — And in the first place: presentment for acceptance 
 
 31 1 Parsons on Notes and Bills. .348. 
 
 :t2Fall Rh-er Union T5ank v. Willard. 5 Mete. (Mass.) 210; Edwnrds 
 on Bills, 505. 
 
 sa First Nat. Bank v. Hatch, 70 :Mo. 22 ; Fisher v. Beckwith, 19 Vt. 
 
 31. 
 
 34 Fall River I^nion Bank v. Willard. 5 Mete. (Mass.) 210. 
 
 35 Morrison v. Buchanan, G Car. & P. IS.
 
 170 PRESENTMENT FOK ACCEPTANCE. § 2G8. 
 
 slioulJ iu all cases be made during the usual hours of busi- 
 ness, and such hours, except where presentment must be at a 
 bank, generally range through the whole day to hours of 
 rest in the evening.'"' Eight o'clock in the evening would not 
 be too late to present a bill for acceptance to a tradesman.^' 
 And it matters not at what hour it is made, provided an 
 answer be given by an authorized person.^* But it i>^ a 
 mere nullity if made at an unreasonable hour — after bed- 
 time or business hours — if no such answer be given.^^ If 
 there is a kno\vn custom or usage in a town or city, which 
 regulates business hours, that should govern in determining 
 the proper hour for presentment at the draw^ee's place of 
 business.^^ 
 
 ^ 268. Within what period of time presentment for accept- 
 ance must be made. — It seems to be the general commercial 
 law of the civilized world, that when a bill is payable at a 
 day certain — as, for instance, on a day named, or a fixed 
 day after date — it need not be presented until the day of 
 payment, in order to charge the drawer or an indorser.'*^ 
 The reason of this is that the drawer, by fixing a day certain 
 for payment, assumes the responsibility of providing funds 
 at that time, whatever may have been his previous credit 
 with the drawee. And as to the indorser, by the ver}' act 
 of indorsement, he draws a new bill on the same terms; 
 and, besides, he waives his right of immediate acceptance by 
 not enforcing it himself, but putting his bill into circulation 
 without acceptance.'^ If payable at sight, or at a certain 
 time after sight, or on demand, the only rule which can be 
 laid down is that it must be presented -within a reasonable 
 time,^^ unless there be some well-established usage of trade 
 
 •■{o El ford V. Teed, 1 Maiile & S. 28; Cayuga County Bank v. Hunt, 2 
 Hill, fi.35. 
 
 37Chitty on Bills [*.313]. 
 38Chitty on Bills [*.3ir)]. 
 
 39 Story on Bills, § 237. 
 
 40 Story on Bills, §§ 23G. 349; Story on Notes, § 135. 
 
 41 Townsley v. Sumrall, 2 Pet. 178; Bachellor v. Priest, 12 Pick. 399. 
 
 42 Allen V. Suydani, 17 Wend. 308. 
 
 43 Wallace v. Agry, 4 Mason, 330; Bridgeport Bank v. Dyer, 19 Conn. 
 136.
 
 g iJO'J. TIMK OK I'UKSENTMENT. 1 i 1 
 
 wliicli fixes a definite time for such presentment, in whick 
 case such usage would control^-* If the hill he not i)re- 
 sented within a reasonahle time, the drawee is discharged, 
 although all the parties continue solvent, and there is no 
 damage caused h_v the delay.'*"' 
 
 §269. Due diligence must be exercised. — it is not neces- 
 sary fur the holder U) take the hrst opportunity to present 
 for acceptance/*' though to avoid (piestion in case of loss it 
 is advisahlo to do so — due diHgence — that is, presentment 
 within a reasonahle time, is all tliat is necessary. "The 
 distinction is," as was said by Gibbs, C. J., "between bills 
 payable at a certain imiiiber of days after date, and bills 
 payable at a certain munber of days after sight. In the 
 former, the holder is bound to use all due diligence, and 
 present the bill at maturity; but in the latter case, he has 
 a right to put the bill into circulation before he presents it, 
 and then, of course, it is uncertain when it will be presented 
 to the drawee. It is to the prejudice of the hohler if he 
 delays to do it, and he loses his money and interest." ■*' 
 
 There are certain circumstances which may affect the 
 question of reasonable time; for instance: (1) The passing 
 of the hill into circidation. In such case a larger latitude 
 is allowed for presentment for acceptance, and a long delay, 
 even for as much as a year, would not be deemed no2,li- 
 gence. (2) Fluctuations of the rate of exchange. The fall- 
 ing or rising of the rate of exchange in the place of resi- 
 dence of the drawee should be taken into consideration in 
 detennining whether or not there was unreasonable delay; 
 '/. c, if exchange fell iminediately after the sale of the bill, 
 a more extended period might fairly and reasonably be 
 allowed the holder, in ordei- to enable him ])ona fide to en- 
 deavor to make a fnii- ]>rofit, or, at all (n-euts, to endeavor 
 
 4+ ^r(■llish V. r^awdon, 9 VAuff. 41Ck 
 
 45 Carter v. Flower, 16 M. & W. 74:?: Tlionil.urir v. Emmons, 2.*? >V. Va. 
 333. 
 
 •iGMuilman v. D'Etruino. 2 11. I'.l. ")(i.") ; Picscott Bajik v. Cavcrly. 7 
 Gray. 217. 
 
 4" Goupy \. Harden, 7 Tamil. ir)0.
 
 172 ACCKl'TA.NCE. §§ 270, 271. 
 
 to secure himself from loss. (3) The facilities of commu- 
 uication between the parties. This includes the character 
 of the commimication, the distance between the respective 
 residences of the holder and drawee, and the length of 
 time necessary to effect communication between the one place 
 and the other. (4) War, sickness, or accident. Any rea- 
 sonable cause, such as sickness, inevitable accident, or in- 
 tervention of war, or other circumstances beyond the hold- 
 er's control, will excuse delay in presentment for ac- 
 ceptance.'*^ 
 
 SECTION Y. 
 
 THE NATURE AND EFFECT OF ACCEPTANCE. 
 
 ^ 270. Liability of drawer before acceptance. — The drawer 
 of a bill undertakes that when it is presented to the drawee 
 he will accept it; and by acceptance is meant an undertak- 
 ing on the acceptor s part to pay the bill according to its 
 tenor.'*'^ Until the bill has been accepted, the drawer is the 
 primary debtor, and his liability is contingent and condi- 
 tioned upon a strict compliance with the law as to present- 
 ment of the bill for acceptance (if the bill be of such a 
 character that it is necessary to present it for acceptance), 
 and due protest and notice of dishonor. After acceptance, 
 the drawer becomes secondarily liable, and his position is 
 that of the first indorser upon a promissory note.^^ 
 
 § 271. Relation of drawee to bill before acceptance. — Until 
 he has accepted the bill, so entirely is the drawee a stranger 
 to it, that he may himself discount it. And he may then 
 transfer it as the hona fide holder to another, w^ho may sue 
 and charge the drawer.^^ He may discount it either for 
 the drawer, the payee, or an indorsee. "^'If the acceptor 
 discounts the bill for the drawer, and then indorses it away, 
 the drawer will T)e liable upon it to the holder, and the trans- 
 fer by the drawer to the acceptor will operate as an in- 
 
 48 Daniel on Xofrotiable Instruments, §§ 468-478. 
 
 49 Story on Bills, § 272; Cox v. National Bank, 100 U. S. 712. 
 
 50 Daniel on Xepotiable Instruments. § 479. 
 
 51 Desha v. Stewart, Ala. 852: Swope v. Ross. 40 Pn. St. ISO.
 
 §272. TlIK -NATLKK AND KKKKCT OK ACCKI'TA.XCK. 1 ( ^i 
 
 dorscment, althougli, at the lime, the drawer dofs ii..t intend 
 to transfer by way uf indorsement, being under the impres- 
 sion that the bill is discduirged by coming into the hands of 
 the acceptor. X.>r will the payment of the amount, less 
 the discount, be deemed a payment of the bill by the ac- 
 ceptor.'' ''" If the drawee comes into possession of the bill 
 before its dishonor, there is no presumption that he takes it 
 with the obligation to accept.^^ 
 
 § 272. The effect of the acceptance of a bill is to consti- 
 tute the acceptor the i)rincipal debtor.^"* The bill becomes 
 by the acceptance very similar to a promissory note — the 
 acceptor being the promisor, and the drawer standing in 
 the relation of an indorser. 
 
 But in respect to the acceptor's position ^\'ith regard to 
 the drawer, and the amount for which he renders himself 
 liable by accepting the bill, it is well to observe that the 
 acceptance does not entitle the acceptor to charge it in ac- 
 count against the drawer from the date of acceptance, unless 
 ho pays the whole amount at the time, or discharges the 
 drawer from all responsibility.^^ 
 
 Like the maker of a note, the acceptor is bound by all 
 the terms of the instrument, and if it contain a stipulation 
 for payment of attorney's fees, he is bound by it.^*' 
 
 If the acceptance be for the drawer's accommodation, the 
 acceptor does not thereby become entitled to sue the drawer 
 upon the bill; but when he has paid the bill, and not be- 
 fore, he may recover back the amount from the drawer in 
 an action for money had and received.^^ If the acceptor put 
 the bill in circulation, he is estopped from showing it was 
 then paid.'^* 
 
 52 Swope V. Ross, 40 Pa. St. 186. 
 
 53 Desha v. Stewart, 6 Ala. 852. 
 
 54 Heiirtematte v. Morris, 101 X. Y. G3 ; Capital City Ins. Co. v. 
 Quinn, 73 Ala. .5CJ0. 
 
 55 Bracton v. W illiny. 4 Call, 28S. 
 
 56 Smith V. Miincie Nat. Bank, 29 Ind. 158. 
 
 57 Christian v. Keen, 80 Va. 377 ; Martin v. Muncy, 40 La. Ann. 190. 
 58Hinton V. Bank of Columbus. 9 Port. (Ala.) 463.
 
 174 ACCEPTANCE, §§ 273, 274. 
 
 §273. What acceptance admits: (1) Signature of drawer. — 
 It follows from the fact that the acceptor assumes to pay 
 the bill, and becomes the principal debtor for the amount 
 specified, that acceptance is an admission of everything es- 
 sential to the existence of such liability. Therefore, ac- 
 ceptance is, in the first place, an admission of the signature 
 of the drawer, the drawee being supposed to know his cor- 
 respondent's handwriting, and, by accepting, to acknowl- 
 edge it; and in a suit against the acceptor he would not 
 be permitted to plead or show that the handwriting was not 
 the drawer's, and would be bound by his acceptance even 
 though the drawer's name were forged.^^ 
 
 § 274. (2) Admission of funds of drawer in drawee's hands. 
 
 — In the second place, acceptance admits that the acceptor 
 had funds of the drawer in his hands, for the drawing of 
 the bill implies this, and acceptance in the usual course of 
 business only follows when it is the fact. Therefore, the 
 acceptor cannot deny that he was in funds when suit is 
 brought by a holder of the bill;*"* though as between himself 
 and the drawer it is only prima facie evidence that the 
 drawer had funds in his hands, and he may rebut this pre- 
 sumption by showing that the acceptance was for the draw- 
 er's accommodation, or othermse under circiunstances which 
 place him under no obligation to pay the bill to him.*^^ But, 
 notwithstanding the presumption that the acceptor has fluids 
 of the drawer, yet, where bills have been drawn upon let- 
 ters of credit to enable a party to purchase and ship mer- 
 chandise, this presmnption is rebutted, and the drawer be- 
 comes the primary debtor, and is liable to the acceptor for 
 his advances. But if the acceptor has notice that one of 
 two joint drawers of such a bill has merely loaned his name 
 
 59Jenys v. Fawler, 2 Stra. 946; Hoffman & Co. v. Bank of Mil- 
 waukee, 12 Wall. 193; Coetz v. Bank, 119 U. S. 556. 
 
 CO Raborg v. Peyton, 2 Wheat. 385 ; Hortsman v. Hen.shaw, 1 1 How. 
 177; Heurtematte v. Morris, 101 N. Y. 63. 
 
 61 Daniel on Negotiable Instruments, §§ 174—170; Park v. Nichols, 
 20 111. App. 143; Klopfer v. Levi, 33 Mo. App. 322.
 
 § 275. THE NATURE AND EFFECT OF ACCEPTANCE. 175 
 
 to give currency to the bill, sueli drawer is no more lial)le to 
 the acceptor than if he had merely indorsed the l)ill."' 
 
 §275. (3) Admission of drawer's capacity to draw. — Jn the 
 third place, the acceptor admits the capacity of the drawer 
 to draw the bill, for otherwise it would not be valid ;"^ and 
 therefore he cannot set up a plea, that the drawer of a bill, 
 which he had accepted, was a body corporate having no 
 legal authority to draw the bill, or was a bankrupt, infant, 
 married woman, or fictitious person.*^ When the bill is 
 drawn in the name of a firm, acceptance admits that there 
 is such a firm, and if it be drawn by a person as execu- 
 tor, it admits his right to sue in that character. '^'^ 
 
 § 276. (4) Admission of payee's capacity to indorse. — In 
 the fouiik place, the acceptor admits the capacity of the 
 payee to indorse the bill when it is drawn payable to the 
 payee's order, for by the very act of acceptance he agrees to 
 j)ay to his order;"^"' and, therefore, he cannot show that at 
 the time of accei)tance the payee was an infant, an insane 
 person, a marrietl woman, a bankrupt, or a corporation 
 without legal existence. '^^ It is a general ])rinciple, appli- 
 cable to all negotiable securities, that a person shall not dis- 
 })ute the power of another to indorse such an instrument, 
 when he asserts bv the instriunent which he issues to the 
 world, that the other has such power.*'* Indeed, there could 
 be no reason why the acceptor should be interested to show 
 that the payee Avas incompetent to make the order; for he 
 has been guaranteed in that regard by the drawer, and may 
 
 62 Turner v. Browder, 5 Bush, 216. 
 
 6:{ Story on Bills, S 113; Byles on Bills [*193]. 325. 
 
 <M Halifax v. Lyle, 3 Welsh., Ilurl. & Gord. (Exch.) 466; Braithwaite 
 V. Gardiner, 8 Q. B. 473; Taylor v. Croker, 4 Esp. 187; Cowton v. 
 Wiekersham, 54 Pa. St. 302; Cooper v. Meyer, 10 B. & C. 468. 
 
 65 Bass V. Clive, 4 Maule & S. 13; Asi)iii\v;ill v. Wako. 10 Bing. 51. 
 
 6'' Daniel on Negotiahle Instruments, §§ 93, 242. 
 
 67 Jones V. Darch, 4 Price, 300: Smith v. Marsaek, 6 C. B. 486; 
 Drayton v. Dale, 2 B. & C. 293; Daniel on Negotial)le Instruments. § 93 
 ct scq. 
 
 68 Daniel on Negotiable Instruments, chap. 42, section 3.
 
 17G ACCEPTANCE, §§ 277, 278. 
 
 charge the amoiuit in aecuiiiit against him whether the payee 
 were competent or not. 
 
 § 277. (5) Admission of agent's handwriting and authority. 
 — In the fiflh place, if the bill be drawn by one professing 
 to act as agent of the draw'er, the acceptance admits his 
 handwriting and authority as agent to draw.*"'' In the lead- 
 ing case of Robinson v. Yarrow, the question arose between 
 the acceptor and the indorsee of the drawer by procuration, 
 and the doctrine is stated in the text in the language gen- 
 erally used by text-writers and judges. It is, however, con- 
 tended with force in a Louisiana case, that the doctrine only 
 applies as between the acceptor and a hona fide transferee 
 ^\athout notice of want of authority in the agent to draw; 
 and that as between the acceptor and the payee who has 
 taken the bill from the agent, the former is not estopped 
 from shomng that the agent drew without authority, the 
 payee being himself under obligation to make due inquiry."^ 
 And this seems to be a reasonable limitation of the principle. 
 
 §278. What acceptance does not admit: (1) Signature of 
 payee. — But beyond these admissions the acceptance does 
 not go. In the first place, it does not admit the genuine- 
 ness of the signature of the payee when it purports to bear 
 his indorsement, or that of any other indorser, for \\\\\\ 
 their handwriting he is not presumed to be familiar; and, 
 therefore, if the signature of the payee or other indorser 
 be forged, the acceptor wdll not be bound to pay the bill 
 to any one who is compelled to trace title through such in- 
 dorsements.'^^ And if he has gone so far as to pay the bill 
 to any one holding it under such forged indorsement, he 
 may, as a general rule, recover back the amount.*^^ Thc^ 
 rule would not apply, ho-\vever, wdiere the drawer had issued 
 the bill with the forged indorsement upon it, for then the 
 
 «!' Robinson v. Yarrow, 7 Taunt. 455; 1 Parsons on Notes and Bills, 
 322. 
 
 TO Angel V. Ellis. 1 McGloin. i\\. 
 
 71 Holt V. Ross. 54 N. Y. 474; Edwards on Bills, 432. 
 
 72 Holt V. Ross. .54 X. Y. 474; Dick v. Leverich, 11 La. 573: Williams 
 V. Drexel, 14 Md. 500.
 
 §270. THE XATUKK AND EFFECT OF ACCEPTANCE. 177 
 
 acceptor could charge the aniomit iii account against him, 
 and as the forged indorsement could in such case subject 
 him to no loss, he would not be entitled to recover back the 
 amount."^ The acceptance does not admit the signature of 
 the indorser, even when the bill is payable to the drawer's 
 order, and purports to be indorsed by him in the same hand- 
 writing as the drawer's.^* But if the drawer is a fictitious 
 person, and the bill is payable to the drawer's order, the 
 acceptor's imdertaking is that he will pay to the signature 
 of the same person that signed for the drawer; and in such 
 case the holder may show, as against tlio acceptor, that the 
 signature of the fictitious drawer and of the first indorser 
 are in the same handwriting.^'' 
 
 § 279. (2) Acceptance no admission of agency to indorse 
 
 In the second place, acceptance does not admit agency to 
 indorse, which must be proved by the holder in order to 
 recover against the acceptor, even though the acceptor ac- 
 knowledges agency to draw the bill, and the indorsement 
 was upon it at the time of acceptance. Thus, where a bill 
 was drawn over the signature, " A. Ileniw p. proc. C. Stae- 
 ben 6z Co.," and was expressed to be payable ^' to our order," 
 and was indorsed in like manner as drawn: " A. Henry 
 p. ])roc. C Staeben <fe Co.," and was accepted by the de- 
 fendant, and sued on by the plaintifi^, it was held that, in 
 order to recover, he must prove the procuration to indorse. 
 And Park, J., said: " The mere acceptance proves the draw- 
 ing, but it never proves the indorsement; it is not at all 
 necessary that a power given to draw bills by procuration 
 should enable the agent to indorse by procuration; the first 
 is a power to get funds into the agent's hands, the other to 
 pay tliom out." ''^ 
 
 73 Hortsman v. Henshaw, 11 How. 177; Coggill v. American Exchange 
 Bmik, 1 N. Y. 113. 
 
 '■1 Robinson v. Yarrow. 7 Tuunt. 45.'3 ; Williams v. Drcxi'l, 14 .Md. ")()(>. 
 
 75 Cooper V. Meyer. 10 B. & C. 4G8; Beeman v. Duck. 1 1 M. & \V. 2rA. 
 
 T^ Robinson v. Yarrow, 7 Taunt. 455; Benjamin's Chalmers' Digest, 
 211. 
 
 12
 
 1(S ACCEPTANCE. §§280,281. 
 
 § 280. (3) Acceptance no admission of genuineness of terms 
 in body of the bill. — In the third place, the acceptance does 
 not admit the genuineness of the terms contained in the body 
 of that bill at the time of the acceptance; and, therefore, 
 if at that time they had been altered so as to purport to bind 
 the drawer for a larger simi, or in a different manner than 
 that in the original bill, he will not be bound by his accept- 
 ance to pay the amount, unless the drawer had by his own 
 carelessness afforded opi)ortunity for the alteration, and 
 the acceptor could therefore charge him in account with the 
 whole amount.'" But where the drawer alters it himself, or 
 acquiesces in an alteration, before acceptance, it binds him, 
 and therefore the acceptor.'^^ 
 
 If the drawer w^ere not responsible for affording the op- 
 portunity for the alteration to be made, the acceptor could 
 not only defend against a recovery upon the bill, but might 
 himself recover back the amount paid upon it, or, at least, to 
 the extent of the amount for which he would still remain 
 liable to the drawer.'® If, however, the acceptor were him- 
 self responsible for issuing the bill in such a fonn as to 
 admit of its being easily forged or altered — as where an 
 acceptor wrote his acceptance in blank, on an agreement 
 with the drawer that he should not draw for over $1,000, 
 and the latter inserted a larger sum and passed the bill to 
 the plaintiff — he would be bound for the whole amount, and 
 could not recover it back if paid.^" 
 
 SECTION VI. 
 
 BY WHOM, AND WHEN, BILLS SHOULD BE ACCEPTED. 
 
 § 281. Person who may accept. — The drawing of a bill im- 
 ports a contract on the part of the drawer that the draAvee 
 is a person competent to accept; and, therefore, if the 
 
 77 Young V. Grote, 4 Bing. 2.5.3; Yonnrr v. Lehman, 63 Ala. 519; 
 White V. Continental Nat. Bank, 04 N. Y. 320. 
 
 78Langton v. Lazarus, 5 :\r. & W. G28; Ward v. Allen, 2 Mete. 
 (Mass.) 57. 
 
 70 Bank of Commerce v. I'nion Bank, 3 N. Y. 230. 
 
 80 Van Duzer v. Howe. 21 X. Y. 531.
 
 § 282. nv wiio.M, AM) wiiKN, ini.j.s accki'tkd. 17'.> 
 
 holder upuii prc^euliiieiiL ul' llii- bill iibcertains that the 
 drawee is iucapable of coutracting — for instance, is a minor, 
 an idiot, or a married woman — he may cause it to be pro- 
 tested, and proceed against antecedent parties, as usual in 
 cases of dishonor.**^ 
 
 It follows, therefore, as a general rule, that the bill should 
 and can be accepted only by the party on whom drawn or 
 his authorized agent, except in the cases of acceptance for 
 honor 1*^^ and if a bill addressed to one be accepted by two 
 persons, it has been thought that the acceptance of the first 
 Avill be vitiated by having been altered in an essential part,^ 
 unless made ^nth the acceptor's consent. But if any other 
 person, after an acceptance, subsequently accepts the bill 
 for the purpose of guaranteeing its credit, at the acceptor's 
 request, in the usual form of an acceptance, then, if there 
 is a sufficient consideration, lie may be bound thereby as 
 a guarantor; but he is not liable as an acceptor.^ And the 
 addition will not be a material alteration.**'' 
 
 A party may be bound as an acceptor by any name or 
 designation he may see fit to adopt, provided it clearly ap- 
 pears by extraneous evidence who was intended; and if he 
 intends to contract by a certain designation, he is estopped 
 to deny that the name by which he assumed to enter into 
 the contract was the appropriate appellation. " The West 
 Tennessee Department of the Life Association of America " 
 would therefore be bound upon an acceptance made by its 
 proper officer of a bill addressed to " The Western De- 
 partment of the life Association of America." ^ 
 
 § 282. When accepted by stranger to the instrument. — 
 Where a i)erson other than the one addressed as drawee 
 writes his name across the face of tho Itill, it Avould be com- 
 
 81 Edwards on Bills, 381; Chitty on Hills [*192], 221; Tooting v. 
 Huhl)ard. 3 Bos. & P. 291. 
 
 saPolliill V. Walter, 3 B. & Ad. 114; May v. Kelly, 27 Ala. 4it7 ; 
 Keenan v. Xash, 8 :Minn. 4()!>. 
 
 83 Thompson on Bills, 112, 212. 
 
 84 Story on Bills, § 2r)4 : .Taekson v. Hudson. 2 ("aiiipb. 447. 
 8fi Smith V. Lockridge, 8 Bush, 425. 
 
 8fi Hascall v. Life Assn. of America, 5 Ihin, 152.
 
 ISO ACCEPTAXCE. §§283,284. 
 
 petent for him to show as between immediate parties (and 
 on account of its ambiguity, perhaps, as to others) in what 
 character he intended to be bound.**' 
 
 But if a party accept a bill in which no drawee is named, 
 it will be regarded as acknowledging that he was the drawee 
 and \vi\\ operate as a complete accepted instrument.^* 
 
 § 283. An acceptance may be made by an agent but cer- 
 tainly the holder may require the production by him of 
 clear and explicit authority from his principal to accept in 
 his name, and without its production may treat the bill as 
 dishonored ;^^ and it has been doubted whether the holder 
 is bound to acquiesce in an acceptance by an agent, as 
 such an acceptance would multiply the proofs of the holder's 
 title.^" But if the agency were clear, ^ve think the holder 
 would be bound to take the agent's acceptance — acceptance 
 by procuration, as it is termed.^^ If the holder takes an 
 acceptance from one unduly alleging his agency, and i^nth- 
 out giving notice to antecedent parties, they will be released, 
 if the principal refuses to ratify the act.^^ 
 
 If the bill be drawn upon an agent in his individual name, 
 it would seem clear on principle that none but he, as an in- 
 dividual, could accept. ^^ 
 
 § 284. Bills drawn on joint parties and partners. — If a bill 
 is drawn on two persons not partners, both should accept, 
 and if either refuse, the bill may be protested for his non- 
 acceptance;^* but the party accepting \\'ill be bound by his 
 acceptance.^^ If the bill is addressed to two persons, " or 
 
 8- Curry v. Keynolds, 44 Ala. .349. 
 
 f^^ Wheeler v. Webster, 1 E. D. Smith, 1 ; Gray v. Miliier, 8 Taunt. 
 730: Davis v. Clarke, 6 Q. B. IG. 
 
 89Atwo6d V. Munnintis, 7 B. & C. 278; Roscoe on Bills, 71. 
 
 90Coore v. Callaway. 1 Esp. 115; Chitty on Bills (13th Am. ed.), 321. 
 
 91 Thompson on Bills, 211. 
 
 02Thompson on Bills, 211; Chitty on Bills (13th Am. ed). .321. 
 
 93 Daniel on Negotiable Instruments, § 487. 
 
 94Dnpays v. Sheplierd, Holt, 297; Chitty on Bills (13th Am. ed.), 
 73, 321. 
 
 95 Owen V. Van Uster, 10 C. B. 318; Smith v. Melton, 133 Mass. 369.
 
 § 285. IIV WllUM, A.ND Wiiii.N, lii-LLH ACCEPTKU. 181 
 
 either of them," acceptance by either is a sufficient compli- 
 ance with its mandate."" 
 
 If a bill be drawn upon a iinn, it may be accepted by any 
 one of the partners in the partnership namc;'-*^ and it will 
 be a good acceptance of the lirm (as we think, although the 
 authorities are in conllict), if only the name of the accepting 
 partner be signed, as it will be understood to signify that 
 the firm responds to the request of the bill, and that the 
 signing partner attests it.®^ But whether the acceptance be 
 in the name of the firm, or of the signing partner, it will not 
 bind the firm as against the drawer cognizant of the facts, 
 unless the bill was drawn for partnership purposes,^ except 
 in the hands of a bona fide holder for value, without notice, 
 in wliioh event it would be valid whether drn^\Ti for partncr- 
 shiy) purposes or othenAase.^ 
 
 If a bill drawTi on an individual member of a firm be 
 accepted bv him, it "snll bind him indi^^dually, but not the 
 firm, although expressed to be on account of the firm. 
 
 § 285. When acceptance may be made. — The acceptor may 
 make his acceptance before the I'ill has been sigTied by the 
 drawer, and while it is othennse incomplete, and deliver 
 it to be completed by the necessary insertions;^ and his 
 acceptance is valid if made after the bill is overdue, and 
 after it has been dishonored by refusal to accept, or by non- 
 payment, followed by protest.^ It is not necessary that the 
 bill should bo dra^\^l by the same person to whom the ac- 
 ceptor handed the blank acceptance.* And where the blank 
 
 f>« Thompson on Bills. 212. 
 
 OTPinkney v. Hall. 1 Salk. 126: Mason v. Ruinsoy. 1 Campb. .384. 
 ftS^rason V. Rumspy, 1 Camph. .384: Cliitty on Rills (13tli Am. ed.), 
 5.3. r)4: Tolman v. Tlanraluui. 44 Wis. 133. 
 9!' Pinkncy v. Hall. 1 Ralk. 126. 
 
 1 Catskill Bank v. Stall, Li Wond. 364: Livinorston v. Roosevelt. 4 
 Johns. .351. 
 
 2 Harvey v. Cane, 34 L. T. R. 64: Daniel on Negotiable Instriunents, 
 § fll et seq. 
 
 •'5 ^leehanics' Bank v. Livingston, 33 Barb. 4.j8 : Spalding v. Andrews, 
 48 Pa. St. 413; Wynne v. Raikes, 5 East, 513; Grant v. Shaw, 16 Mass. 
 344. 
 
 ■t Sdiultz v. Ashlev, 7 Car. & P. 99.
 
 182 
 
 ACCEPTANCE. §§ 28G, 287. 
 
 8 
 
 acceptance was filled up after the lapse of twelve years, and, 
 as the jurv found, after the lapse of a reasonable tune, the ac- 
 ceptor wa^s held liable to a bona fide indorsee.^ Furthermore, 
 the acceptor in blank will be liable for any amount for 
 which the bill is filled up when it has passed into the hands 
 of any bona fide holder, ^^'ithout notice that his authority has 
 been exceeded.'' 
 
 Acceptance dates from delivery, until which time it is 
 revocable:' l»nt if not in the hands of the acceptor, and ac 
 ceptod verbally, this principle would have no application 
 
 ^ 286. Acceptance of bill after maturity, and after death of 
 drawer. — There may be acceptance of a bill after it has 
 become payable, and after protest, in which case the bill is 
 regarded as payable on demand.'^ And after acceptance has 
 been once refused, the drawee may aftei-^vard accept, and 
 bind himself as acceptor — l)ut he cannot bind the other 
 parties unless the bill was duly protested.^*^ 
 
 Death of the drawer is no revocation of a bill in the 
 hands of a bona fide holder; and, therefore, after his death, 
 it may be accepted by the drawee, although he has knowl- 
 edge of that fact.^^ The presumption is that a bill was ac- 
 cepted before maturity, and within a reasonable time after 
 date.^2 
 
 S:j 287. Drawee may deliberate twenty-four hours whether or 
 not to accept. — When the bill is presented to the drawee 
 for acceptance, he is entitled, if he desires it, to a reason- 
 able time to examine into the state of his accounts with 
 the drawer, and deliberate whether or not he will honor 
 the bill. To afford him this opportunity, which it may be 
 
 5 Montague v. Perkins, 22 Encr. L. & Eq. .510. 
 
 fi Bank of Commonwealth v. Curry, 2 Dana, 142; Moody v. Threlkeld, 
 1.3 Ga. 55. 
 
 7 Cox V. Troy, 5 15. & Aid. 474. 
 
 8 1 Parsons on Notes and Bills, 291. 
 
 9 Christie v. Pearl, 7 M. & W. 491; Bank of Louisvilk^ v. EUery, .34 
 Barb. 6.30. 
 
 10 Wynne v. Raikes, 5 East, 514; Thompson on Bills. 214. 
 
 iiCutts V. Perkins, 12 Mass. 200; Hammond v. Barclay, 2 East, 227. 
 12 Roberts v. Bethel, 12 C. B. 778.
 
 §§ 288, 28U. i;v whom, and wiik.n, liii.i.s accki-tki). ISo 
 
 very necessar)' for him to iivail of, ho is allowed twenty- 
 four hours, and it is usual to leave the bill with him for that 
 period ;'=• though it has been said that if the post goes 
 out in the meantime, the bill should be protested^hmne- 
 diately if not aceepted, and notice of dishonor sent.^'^ But 
 this rule is too rigid, especially in countries like the United 
 States, in which the mail facilities are so great; nor does 
 it consist with the rule allo^ring a whole day for preparation 
 
 of notice.^'' 
 
 But if the drawee refuses to accept within the twenty- 
 four hours, the bill must be protested immediately;^" and if 
 at the end of twenty-four hours the drawee does not signify 
 his accci)tance, protest must be unmediately made, and no- 
 tice given. ^^ 
 
 § 288. As to the date of acceptance. — If the acceptance 
 bears a date, it will be taken as prima facie evidence of the 
 time when it was made, even when the date is in a different 
 handwriting from the rest of the acceptance.^^ When the 
 acceptance bears no date, there is no presumption that it 
 was made at the date of dra^^'ing; but, on the contrary, it 
 will be presumed that it was made afterward.^^ The pre- 
 svmiption is, that it was made A\dthin a reasonable time after 
 drawing, and prior to the term of payment."'^ Tt is said, 
 in Pardessus, that it may be inferred to have been accepted 
 on the date of the bill."^ 
 
 § 289. Acceptance for honor. — There is a peculiar kind 
 of acceptance called accei)tance for honor, or supra protest. 
 
 13 Connelly v. :McKoan, G4 Ta. St. 11.3; Overman v. Iloboken City 
 Bank, 31 X. J. L. r)G3; Montgomery County Bank v. Albany City Bank, 
 8 Barb. 399. 
 
 UBellasis v. Hester, 1 Ld. Raym. 280; Thompson on Bills. 213. 
 
 15 Morrison v. Biu-lianan. Car. & P. 18; Chitty on Bills (13th Am. 
 ed.), 317-321. 
 
 16 1 Parsons on Notes and Bills. 348; Edwards on Bills. 400. 
 
 17 Ingram v. Forster, 2 J. P. Smith, 242. 
 
 iSGlossup V. Jacob, 4 Campb. 227; Thompson on Bills. 217. 
 
 19 Begbi V. Levi, 1 C. & J. 180. 
 
 20 Roberts v. Bethel. 22 L. .T. C. P. G9. 
 
 21 1 Pardessus, 393.
 
 1S4: ACCEPTANCE. § 290. 
 
 This most frequently happens when the original drawee (and 
 the drawee au hesoin, if any) refuses to accept the bill, in 
 which case a stranger may accept the l)ill for the 
 honor of some one of the parties thereto, which accept- 
 ance will inure to the benefit of all the parties subsequent 
 to him for whose honor it was accepted.^^ 
 
 § 290. Circumstances under which there may be such ac- 
 ceptance; method of. — An acceptance for honor is only al- 
 lowable when acceptance by the drawee has been refused, 
 and when the bill has been protested, and hence it is called 
 acceptance supra -protest.^ 
 
 The reason assigned for this is that the drawers and in- 
 dorsers have a right to say that the bill was not primarily 
 dra^\^^ on the acceptor for honor; and the only proper proof 
 of the refusal of the original drawee is by protest, that being 
 the known instrument, by the custom of merchants, to es- 
 tablish the facts.^^ The usual form used in such acceptance 
 is, "Accepted supra protest, for the honor of A. B." An- 
 other approved form is, " Accepted imder protest, for the 
 honor of A. B., and \xi\\ be paid for his account, if regularly 
 protested and refused when due." It is essential that the 
 acceptor for honor appear before a notary public and de- 
 clare that he accepts the protested bill in honor of the 
 drawer or indorser, as the case may be, and that he will pay 
 it at the appointed time.^" 
 
 It is the duty of the acceptor supra protest, as soon as he 
 has made the acceptance, to notify the fact to the party 
 for whose honor it is done;^^ and the party paying a bill 
 under protest for honor must give reasonable notice to the 
 person for whose honor he pays, otherwise he Avill not be 
 bound to refund.^ 
 
 22Koni;,' V. Bayard. 1 Pet. 250; Hoaie v. Cazenove. IG East, 391; 
 Story on Bills, §§ 255, 250. 
 
 23Bayley on Bills, 177; Story on Bills, §§ 255, 256. 
 
 24 Story on Bills, § 250. 
 
 S!* Oazzam v. Armstronj^, 3 Dana, 554. 
 
 2G Story on Bills, § 259; Edwards on Bills, 441. 
 
 27 Wood V. Pugh, 7 Ohio, pt. II, 156.
 
 §§ 201, 21>-. J5V WHOM, AND WHEN, BILLS ACCEPTED. 185 
 
 § 291. As to who may be acceptor for honor. — A stranger 
 may undoubtedly accept for honor; and by the word stran- 
 ger in this connection is meant any third person not a 
 party to the bill. It seems that acceptance for honor may 
 also be made by the drawee, who, if he does not choose to 
 accept the bill draAvn generally on account of the person in 
 whose favor, or on whose account, he is advised it is drawn, 
 he may accept it for the honor of the drawer, or of the in- 
 dorsers, or of all or any of them.^^ 
 
 But if the drawee were bound in good faith to accept the 
 bill, ho cannot change his relations to the parties, and accept 
 it supra protest for the honor of nn indorser; he must either 
 accept or refuse.''* 
 
 An acceptor supra protest for the honor of an indorser 
 may, however, recover against such indorser, though he ac- 
 cepted at the instance of the drawee, and as his agent, pro- 
 vided the indorser Avere not thereby damnified. The in- 
 dorser might avail himself of any defense which he could 
 have made, had the drawee accepted for his honor, and 
 then sued upon the acceptance.^ It is immaterial, indeed, 
 as to the defenses which a drawer or indorser may make 
 against an acceptor for honor, whether such acceptor acted 
 at the instance of the drawer, or as the agent of the 
 drawee. ^^ 
 
 § 292. Several acceptors for honor of different parties. — 
 While there cannot be successive acceptors of a bill, gen- 
 erally speaking, there may be several acceptors supra protest 
 for the honor of different parties — that is, one may accept 
 for the honor of the drawer, another for tlio honor of the 
 first indorser, and another for the honor of the second in- 
 dorser, and so on.^^ 
 
 And the acceptor supra protest may accept for the honor 
 of any one, or all, of the parties to the bill; and his accept- 
 
 28 story on Bills, § 259. 
 29S(hiniiiicIponni(h v. Bayard, 1 Pet. 2G4. 
 aoKonijj V. Bayard, 1 Pet. 2.50. 
 
 31 Gazzam v. Armstrong. 3 Dana, 5,')4 : Wood v. Pnph. 7 Ohio, 156. 
 
 32 Story on Bills, § 200; Byles on Bills [*255], 403: 1 Parsons on 
 Notes and Bills. 315.
 
 186 ACCEPTANCE. §§ 293, 21)4. 
 
 ance should designate for whose honor it was made, in which 
 case it could be at once perceived for whose benefit it in- 
 ured. ^^ If the acceptance do not specify for whose honor 
 it was made, it will be construed to be for the honor of the 
 drawer;^* and if for the honor of the bill, or of all the par- 
 ties, it should be so expressed.^^ 
 
 § 293. As to the rights of an acceptor for honor. — By his 
 acceptance for honor, the acceptor has recourse against the 
 party for whose honor he accepts, and all parties whom the 
 latter would have recourse against, and none others.^*^ But 
 the acceptor for the honor of the drawer cannot recover 
 against him without proof of a presentment for acceptance 
 or pa3'ment, and refusal and notice to the drawer.^^ 
 
 If he accepts for the honor of the drawer only, he mil in 
 general have no recourse against the indorsers; and if for 
 the honor of an indorser, he will have no recourse against a 
 subsequent indorser^^ — the exception arising in cases where 
 the person for whose honor he accepts the bill might have 
 recourse against either, as when he is an accommodation 
 drawer or indorser. ^° 
 
 § 294. As to the liability of the acceptor for honor. — The 
 acceptance for honor or supra protest is not an absolute 
 engagement like an ordinary acceptance for value. It is a 
 conditional engagement, and to render it absolute, the per- 
 formance of several acts as conditions precedent are essen- 
 tial. Such an acceptance, says Lord Tenterden, C. J., "is 
 to be considered not as absolutely such, but in the nature 
 of a conditional acceptance. It is equivalent to saying to 
 the holder of the bill, ' keep this bill, don't return it, and 
 wlien the time arrives at which it ought to be paid, if it be 
 
 33Hussey v. Jaeol), 1 Ld. Raym. 88; 1 Parsons on Notes and Bills, 
 313. 
 
 34Chitty on Bills [*34G], 387; 1 Parsons en Notes and Bills, 313. 
 
 35 Gazzam v. Armstrong, 3 Dana, 5.52. 
 
 36Goodall V. Polhill, 1 C. B. 233; Byles on Bills [*2.501, 406. 
 
 37 Baring v. Clark, 19 Pick. 220; Schofield v. Bayard, 3 Wend. 488. 
 
 38 Gazzam v. Armstrong, 3 Dana, 554. 
 
 39 Story on Bills, § 256.
 
 ^ 2U5. m WHOM, AND WllKN, BILLS ACCEl'TED. 187 
 
 not paid by the party on "whom it was ori^nally drawn, 
 come to me and you shall have your money.' " '^'^ The nature 
 of such an acceptor's undertaking is more analogous to that 
 of an indorser"*^ than that of an ordinary acceptor, and to 
 render him absolutely liable it is necessary: 
 
 First. To present the bill at maturity to the original 
 drawee, notwithstanding his prior refusal, because between 
 the time of such refusal and the time of maturity, effects 
 may have reached th(^ drawee, out of which he might, if 
 the bill were again presented, pay it; and the drawer and 
 other parties are entitled to the chance of any l)enefit which 
 might arise from such second demand. And if it were not 
 made (except in the case of a bill made payable at a place 
 not being the residence of the drawee), the drawer and in- 
 dorsers would be discharged; and as the acceptor supra pro- 
 test would thereby lose recourse against them, he is also 
 discharged.'*^ 
 
 Second. Upon refusal by the original drawee to pay the 
 bill Avhen it is presented at maturity, it must be again pro- 
 tested for nonpayment, and such protest and presentment 
 must be alleged in the declaration against the acceptor supra 
 protest. And third, it is then necessary to present the bill 
 in due time to the acceptor supra protest.*^ 
 
 If on such presentment the acceptor supi-a protest re- 
 fuses to pay, there must be another formal protest, stating 
 the presentment for payment to the drawee, the protest for 
 his nonpayment, the presentment of the bill and accept- 
 ance to the acceptor supra protest, and demand of pay- 
 ment of liiiii, and tlie protest for his nonpayment; and no- 
 tice thereof must be forthA\-ith fonvarded to the drawer and 
 indorsers.^* 
 
 § 295. Admissions of acceptor for honor. — There appears to 
 be a conflict of opinion as to the extent of the admission 
 
 40 Williams V. Germaine, 7 B. & C. 457. 
 
 *i 1 Parsons on Notes and Bills, 315. 
 
 42 Barry v. Clark. 19 Pick. 220; Story on Bills. §'261. 
 
 4.iChitly on Bills [*350, 3511. 392; Story on Bills. S 2fil. 
 
 4-*Chitty on Bills [•352], 393; 1 Parsons on Not^^s and Bills. 320.
 
 188 • ACCEPTANCE. §§ 296, 297. 
 
 of the acceptor supra protest. TYiq rule lias Leon broadly 
 stated to be that he does not admit the geniuneness of the 
 signature of any party for whose honor the acceptance is 
 given, not even the drawer's, and therefore he could recover 
 money ]iaid to the holder if the bill should prove to be a 
 forgery ;■*•"' but the rule stated is certainly subject to the 
 modiiication that one who accepts for the honor of the 
 drawer is estopped from denying that the bill is a valid bill ; 
 and, consequently, it would not be competent for him to set 
 up as a defense to an action by an indorsee that the payee is 
 a fictitious person, and that he was ig-norant of the fact at 
 the time he accepted the bill.^^ 
 
 § 296. Holder not bound to take acceptance for honor. — 
 The holder is in no case bound to take an acceptance for 
 hcnor;"*' but if he receives it, and it is for the honor of a 
 particular party, he cannot sue such party until the matu- 
 rity of the bill, and its dishonor by the acceptor supra pro- 
 tcst^^ And if the acceptance is for the honor of all the par- 
 ties to the bill, he cannot sue anv of them until it has ma- 
 tured and been dishonored.^^ 
 
 But there seems to be no reason Avhy the holder may not 
 sue ])rior parties, when the acceptance is for honor of a par- 
 ticular party, after giving them due notice.^^ 
 
 SECTTO^^ YIT. 
 
 FORM AND VARIETIES OF ACCEPTAKCE. 
 
 § 297. Varieties of. — According to the law merchant, an 
 acceptance may be (1) expressed in words or (2) implied 
 from the conduct of the drawee. (3) It may be verbal or 
 written. (4) It jiiay be in writing on the bill itself or on 
 a separate paper. (5) It may be before the bill is drawn 
 
 ^ii 1 Parsons on Notes and Bills, 323. 
 
 40 Phillips V. Thurn, 18 C. B. (N. S.) 694. 
 
 47Mitford V. Walcott, 12 Mod. 410; Chitty on Bills [^345], 387. 
 
 48 Williams v. Gerniaino, 7 B. & C. 468. 
 
 4!) Story on Bills, § 2.58. 
 
 60 Story on Bills, § 258.
 
 § 298. FORM A.MJ VAUIETIES OF ACCEPTAN'CE. 189 
 
 or aftenvai'cls. And (G) there may be absolute, conditional, 
 and qualilied acceptances.^^ 
 
 Acceptance by telegram has been held sufficient ;^^ and 
 under the statutes of Kew York, which make an uncondi- 
 tional ])rnniise to accept a bill before it is drawn ecjuivalent 
 to actual acceptance in favor of a party, who upon the 
 faith thereof receives it for valuable consideration, it has 
 been adjudged that a telegram written and sent by the prom- 
 isor operates as acceptance.^^ 
 
 By statute in nuiny of the States these principles of the 
 law merchant governing acceptances are modified or re- 
 pealed in one respect or another, as will be seen hereafter.'"' 
 
 § 298. Express acceptances. — An express acceptance is 
 usually made by writing the word '* accepted " across the 
 face of the bill (which the drawee may do with pen or 
 pencil), and adding the acceptor's signature. But by the 
 law merchant neither the word nor the signature is neces- 
 sary — " accepted " without a signature, " seen," '' hon- 
 ored," " presented," " I will pay the bill," or writing the 
 day and month when presented; or a written direction of 
 the drawee on the bill to some other person to pay it, or 
 the signature of the drawee alone, or the word " ex- 
 cepted," it being obviously intended for " accepted." ^"^ The 
 words, " T take notice of the above," were held in ^lassa- 
 chusetts not necessarily to import acceptance; and even if 
 they did, unexplained, to be open to explanation, as between 
 immediate ]iarties.^'' Where the drawee wrote his name 
 across the bill, it was held inadmissible for him to show that 
 he refused to write " accepted," for the name alone imported 
 
 f>l Daniel on Xepotiable Instruments. § 496. 
 
 f'2/H re Armstrong, 41 Fed. .'5S-2 ; First Xat. Bank v. Hark, til .Md. 
 401; Nevada Bank v. Luce, 130 Ma.ss. 488. 
 
 53 Molson's Bank v. Howard, 8 Jones & S. 15. 
 
 54 Post. § ,301. 
 
 sspiiilips V. Frist. 19 Me. 77; 15arnet v. Smith, 10 Fost. 25G ; Story 
 on Bills, § 243; Ward v. Allen. 2 Mete. (Mass.) 53; 1 Parsons on 
 Notes and Bills, 243; Harper v. West, 1 Cr. C. C. 192; Spear v. Pratt, 
 2 Hill. 582; :\riller v. Butler. 1 Cr. C. C. 170. 
 
 5«Cook V. Baldwin. 120 Mass. 317.
 
 I'JO ACCEi'TA.NCE. §§ 299, 'MO. 
 
 it.^'^ But merely paying and crediting a part of the amount 
 on the bill would not amount to an acceptance in writing.^** 
 
 § 299. Implied acceptance. — Acceptance may be implied 
 from the conduct of the drawee. Any act which clearly 
 indicates an intention to comply with the request of the 
 drawer, or any conduct of the drawee (no statute interven- 
 ing) from which the holder is justihed in drawing the con- 
 clusion that the drawee intended to accept the bill, and 
 intended to be so understood, will be regarded as an accept- 
 ance. ^'^ Keeping a bill a considerable length of time without 
 returning an answer, may, under some circumstances, be 
 considered as an acceptance, especially if the drawee be in- 
 formed that delay will be so considered, and there be an 
 inference from the language of the drawee that he intended 
 an acceptance. "^^ But the mere detention for an unreason- 
 able time, unattended by special circumstances, Avill not, in 
 law, amount to an acceptance.*'^ 
 
 In an English case Lord Ellenborough expressed the 
 opinion that destruction of the bill by the drawee would 
 constitute an implied acceptance, especially if the drawee 
 had not previously refused to accept.^- The correctness of 
 this doctrine is doubted by eminent text-writers,^^ and it does 
 not seem to be consonant with sound principle. There is 
 a statute in Xew York which in substance provides that 
 if the draAvce dosti'oy the bill, or refuse within twenty-four 
 hours after its delivery to him to return the bill, such con- 
 duct shall be deemed an acceptance.^^ 
 
 ^ 300. Verbal acceptance. — As has been seen, the law mer- 
 chant, unaffected by statute, permits a verbal acceptance, 
 
 •'^"Kaufman v. Barrenger, 70 La. Ann. 419. 
 
 58Bas.sett v. Haines, 9 Cal. 261. 
 
 MAndressen v. First Xat. Bank, 2 Fed. 12.5; Billing v. Do Vaux, .3 
 M. & G. .505; McCutcheon v. Rice, 56 Miss. 455. 
 
 eoChitty on Bills [*295], 3.34; Harvey v. Martin, 1 Canipb. 425. 
 
 61 ilasoTi V. Barff, 2 B. & Aid. 26 ; Colorado Nat. Bank v. Boettcher, 
 5 Colo. 190. 
 
 €2 Jeune v. Ward, 1 B. & Aid. 053. 
 
 e.'iChitty on 15ills [*290], 335; Edwards on Bills, 418. 
 
 €4R. S., § 11 (2d ed.), p. 757.
 
 § 300. FORM AND VARIETIES OF ACCEPTANCE, 11)1 
 
 and it is as bindiiifi; upon tlic drawee as a -written accept- 
 ance; bnt the holder may always insist n])on a written ar- 
 ceptanee, and in default thereof treat the bill as dishon- 
 ored.''^ Any words used by the drawee to the drawer or 
 holder, which by reasonable intendment sig-nify that he hon- 
 ors the bill, will amount to such acceptance; though it would 
 be different if the words were addressed to a stranger hav- 
 ing no interest in the bill. Thus, where a foreign bill 
 dra^\^l on defendant was protested by nonacceptance and 
 returned, and afterwards the drawee told the plaintiff, " If 
 the bill comes back I wdll pay it," was held an acceptance."® 
 So, if the drawee say, " Leave your bill with me, and T will 
 accept it." ^^ So, where the holder met in the street the 
 drawee of the bill which had been sent to his counting- 
 house, and returned unaccepted, and the drawee said, '* If 
 you will send it to the counting-house again, I will give 
 directions for its being accepted," Lord Ellenborough held 
 that if the bill had been sent accordingly, it would operate 
 as an acceptance, but otherwise not, the words being con- 
 ditional.*^^ The words used, therefore, must evince a clear 
 intention on the part of the drawee to bind hmiself to the 
 payment of the bill at all events, in order to amount to an 
 acceptance, and equivocal language will not suffice. There- 
 fore, where the drawee said, on the day after presentment 
 for acceptance, when the plaintiff's clerk called for the bill, 
 " There is your hill, it is all right," it was held no accept- 
 ance.^^ It shoidd be added that, in order to amount to a 
 verbal acceptance, the words used must be addressed to the 
 drawer or holder, or their agent, or to some one who takes 
 the bill on the faith and credit imparted by the words used.'** 
 
 65Chitty on Bills [*287], 326; Edwards on Bills, 417. 
 66 Cox V. Coleman, Chitty, Jr., on Bills, 274. 
 67Chitty, Jr.. on Bills, 12. 
 08 Anderson v. Hick, 3 Campb. 179. 
 69 Powell V. Jones, 1 Esp. 17. 
 
 '0 Daniel on Negotiable Instruments, § 507 ; Martin v. Bacon, 2 S. C. 
 132.
 
 192 ACCEPTANCE. § 301. 
 
 § 301. statutory rule as to written acceptance. — In the 
 year 1821 it was enacted in England, by the statute 1 & 2 
 Geo.IV.jChap. 78, § 2, that "no acceptance shall be sufficient 
 to charge any person, unless such acceptance be in writing 
 on such bill." Since that statute it has been laid down by 
 high authority that a mere signature on the face of the 
 bill, without any words of acceptance, may be an acceptance 
 in writing ^\'ithin the meaning of the statute ;^^ and, on the 
 other hand, that words of acceptance without a signature, 
 if intended as an acceptance, might suffice.^^ By statute 
 19 & 20 Victoria, chap. 78, § 2, it was enacted " that no ac- 
 ceptance of any bill of exchange shall be sufficient to bind 
 or charge an}^ person, unless the same be in writing on such 
 bill, and signed by the acceptor or some person duly au- 
 thorized by him." After this enactment it was contended 
 that inasmuch as before its passage a mere signature was 
 deemed an acceptance in writing — \vithin the statute 1 & 2 
 Geo. TV., it was still not the less so; and that inasmuch as 
 it was a signature of the acceptor, the bill was both accepted 
 in \vriting, and signed by the acceptor ^rithin the meaning 
 of the statute 19 & 20 Victoria. But looking at the his- 
 tory of the statute. Lord Denman was of the contrary 
 opinion ; and the mere signature was held not to amount to 
 an acceptance under the later statute. ^^ The decision, how- 
 ever, was immediately nullified by act of Parliament.^'* Un- 
 der a similar statute in New York, to that of 19 & 20 Vic- 
 toria, the mere signature of the drawee was deemed a suffi- 
 cient acceptance."^ In many of the United States statutes 
 have been enacted which expressly require that all accept- 
 ances shall be in writing, and in most of these States the 
 Avritten acceptance is required to be signed by the acceptor. 
 
 71 Byles on Bills (12th ed.), 191; Leslie v. Hastings, 1 Moody & R. 
 110. 
 
 72 Dufaur v. Oxenden; 1 Moody & R. 90. 
 73Hindlaufrh v. Blakcy, ti C. P. Div. 136. 
 7-iSpe Steele v. McKinlay, 34 Eng. Rep. 106. 
 75 Spear v. Pratt, 2 Hill, 582.
 
 §§ .'302-oU4. louM AM) vai;ij;t!ks <h- accki'Tanck. r.'^i 
 
 § 302. Acceptance on separate paper. — There is no (lonl)t 
 that, in the absence of statutory interdiction, an acceptance 
 may be upon a separate paper, as in a letter, for instance, 
 as well as upon the l)ill itself. Thus, a written promise to 
 accept an existing bill, or '"that it shall meet with .hie 
 honor; " or that the drawee " will accept or certainly pay 
 it" — or any other equivalent language, has l.een held U) 
 amount to acceptance.'" liut if the language be equivocal 
 
 if it be merely stated, " your bill shall have attention " — 
 
 it is insufheient." Promises to accept are hereafter con- 
 sidered.'* 
 
 i^ 303. Written and verbal promises to accept existing and 
 nonexisting bills. — A written promise to the drawer to ac- 
 cept an existing or nonexisting bill which is communicated 
 to a third party, and induces him to take the bill upon the 
 credit thereby excited, is undoubtedly, by the decisions in 
 England and in the United States, the same as an actual ac- 
 ceptance.'^'' But where such promise was not communicated 
 to the holder, and therefore did not enter into the induce- 
 ment to take the bill, the decisions are in a condition of in- 
 extricable confusion. ^^' If the promise to accept be verbal, 
 and the bill in existence, and the promise is communicated 
 to the holder, such promise will amount to an acceptance,* 
 but if the promise be made to accept a nonexisting bill, the 
 better view is that it will not amount to an acceptance. " 
 
 § 304. What requisite to make promise to accept nonexist- 
 ing bill amount to acceptance.— In order that the promise 
 to accept a nonexisting bill shall amount to acceptance, there 
 are two indispensable requisites: First, that it should be 
 
 "SMeEvers v. Mason, 10 .Tohiis. 207; Greele v. Parker, 5 Wend. 414; 
 Billinfj V. De Vaux, 3 M. & Q. oGo. 
 77Rees v. Warwick. 2 B. & Aid. 113. 
 78Po,sf. §§ 303-30.'5. 
 
 79 Daniel on Ne<jotial)le Instnnnents, §§ .5.50, .551, and cases cited. 
 
 80 Daniel on Negotiable Instruments, §§ 552-554. and cases cited. 
 
 81 Johnson v. Collinps, 1 East, 08. 
 
 82 Bank of Ireland v. Archer. 11 M. & W. 383: Kennedy v. Geddes, 8 
 Port. 268. 
 
 13
 
 104 ACCEPTANCE. §§ 305, 30C. 
 
 written within a reasonable time before the bill is drawn, 
 for otherAnse the drawer will be presumed to have declined 
 to act on the authority granted him to draw, and the drawee 
 will not be constrned to have intended an indefinite liability.**^ 
 And second, the promise must so describe the bill that there 
 can be no doubt of its application to it.'^'* High authorities 
 go further, and declare that the promise must put its finger, 
 so to speak, uj)on the specific bill; and that other^vise, if 
 the promise be broken, the promisor may be sued by the 
 drawer for breach of promise to accept; but cannot be sued 
 by anyone as acceptor.**^ 
 
 § 305. To what bills promises to accept are applicable. — 
 The rule that the promise to accept, designating the specific 
 bill, amounts to an acceptance, seems applicable only to the 
 cases of bills payable on demand, or at a fixed time after 
 date, and not to bills payable at or after sight; for, in order 
 to constitute an acceptance in the latter cases, a presentment 
 is indispensable, since the time that the bill is to run cannot 
 be othemvise ascertained.^^ And a mere promise to accept 
 without more, it is thought, applies only to bills payable at 
 the drawee's or payee's place of business.^^ 
 
 ^ 306. Absolute and conditional acceptances; rights of 
 holder as to. — It is the right of the holder of the bill to re- 
 quire an absolute and unconditional acceptance — that is, 
 an acceptance in conformity with the tenor of the bill — 
 and may cause it to be protested unless it be so accepted.^* 
 The holder may, however, at his risk, take a conditional, 
 varying, or (|ualified acceptance, and in such cases the ac- 
 ceptor will, if the condition be complied with, or the quali- 
 fication admitted, 1)0 bound thereby; and the holder \W11 
 
 83Cooliclge V. Paysoii. 2 Wheat. 60; Txreele v. Parker, 5 Wend. 414. 
 
 84 Franklin P.ank v. Lynch, 52 Md. 270. 
 
 RSCoolidfrp V. Payson. 2 Wheal. 00: Boyce v. Edwards, 4 Pet. Ill; 
 Schiinnielpennieh v. Bayard, 1 Pet. 264. 
 
 86 Wildes V. Savajre, 1 Story C. C. 28; Franklin Bank v. Lynch, .52 
 Md. 270. 
 
 S7Mifhi<ran State Bank v. Leavenworth, 28 Vt. 209. 
 
 «8Boehm v. Oarcias. 1 Canipb. 42."): Parker v. Gordon, 7 East. 385; 
 Gibson v. Smith, 76 Ga. 34.
 
 ^ 307.' FOKM AND VARIETIES OF ACCEPTANCE. I'J.J 
 
 likewise he Ixmiul liy it.^'' Tlie liunleu of ])roof i~ on the 
 plaintiff to show j)erfoniiaiic-o of tint c-ouditi(jii oi a con- 
 ditional ac-ceptaiice;"*^ and althoiigh absolute then it should 
 be set out as conditional, with an averment of performance.*^ 
 On the offer of a conditional or varyin<; acceptance, if 
 the holder resolve to reject it altoi^ether, he may protest 
 generally, or give general notice of nonacceptance; but if 
 he is willing to acce])t the offer, he should then give notice 
 of its exact tenns to all the parties, and state his readiness to 
 accept the offer if they will respectively consent.^^ A gen- 
 eral or uiKiualitied protest or notice of nonacceptance would, 
 in such a case, evince that the holder did not acquiesce in 
 the offer, and preclude him from afterward availing him- 
 self of it;^^ but not if he was not aware of the acceptance 
 when he caused the lull to be noted or protested for non- 
 acceptance,** 
 
 § 307. Qualification of rule. — The mle above stated is, in 
 respect to the indorsers of a bill, of absolute and invariable 
 application.""' But in respect to the drawer, it is subject to 
 qualification. The drawer warrants that the drawee is in 
 funds, and that he ^vill accept and pay the bill. And he is 
 botmd to knoAV whether or not the drawee is in funds. 
 Therefore, when he draws ^\dthout having a right to do so, 
 he is not entitled to notice of dishonor. And u]x»n the same 
 principle it is thought that he cannot be injured, and will 
 not be discharged by the holder's taking a qualified accept- 
 ance payable at a future day.*" True, such an acceptance is 
 a departure from the tenor of the bill; but the drawer, hav- 
 ing improperly drawn the bill, cannot complain of the holder 
 
 S9 Anderson v. Hick, 3 Canipb. 170; Taylor v. Xewman. 77 ^fo. 265; 
 Hufrhes V. Fisher. 10 Colo. 383. 
 
 ooRpiul V. Wilkinson, 2 Wash. C. C. ',14: First Nat. Bank v. Bensley, 
 1 Fed. 009. 
 
 '•'1 Lanjjston v. Cornev. 4 Campb. 176. 
 
 "•'^Daniel on Xefrotiable Instruments. § ,510; Chitty on Bills [*301], 
 340. 
 
 93 Sproat V. :Ma thews. 1 T. R. 182. 
 
 94 Fairlie v. Herring. 3 Binp. 62.5. 
 n-". Edwards on Bills. 428, 4.30. 
 
 9'; Walker v. Bank of New York, 13 Barb. 636; Edwards on Bill-. 429.
 
 19'() ACCEPTANCE. § ^08. 
 
 for taking those steps which seem essential to prevent its 
 entire dishonor, and to seenre its payment/''' 
 
 ^ 308. Illustrations of conditional acceptance. — Acceptances 
 '' to pay as remitted for;'' - to pay when in cash for the 
 cargo of the ship I'hetis;" " to pay when goods consigned 
 to me are sold;" "to pay when a cargo of equal value is 
 consigned to me;" " payable when house is ready for occu- 
 pancy;" "'to pay when in funds," are examples of con- 
 ditional acceptances.^ An acceptance to pay "when in 
 funds " renders the drawee liable only when he has funds ;^^ 
 although it has been held that this implied when the drawee 
 has funds which the drawer has a present right to demand 
 and receive, and that it did not apply to wages for daily 
 labor earned after acceptance, and needed for the daily sub- 
 sistence of the laborer.^ " When in funds " means " when 
 in cash," and available securities will not answer this con- 
 dition until actually converted into money.^ If the funds 
 are not received in the acceptor's lifetime, but are collected 
 by the administrator, the latter is liable as representative of 
 tiic deceased," l)ut the condition of the word " adminis- 
 trator " to an acceptance does not make it a conditional one, 
 nor qualify his liability.'' If the holder receive an acceptr- 
 ance to be paid " when in funds," he cannot resort to the 
 drawer until the acceptor refuses to pay after he is in 
 funds ;^' and the conditional acceptor vnll not be liable if the 
 funds are intercepted, or compliance with the condition is 
 prevented, l)y operation of law.^ 
 
 97 Edwards on Bills, 429. 
 
 08 Banbury v. Lissett, 2 Stra. 1211; Julian v. Shorbrook, 2 Wills, 0; 
 Smith V. Abbott, 2 Stra. 1152; Mason v. Hunt, 2 Doug. 297; Cook v. 
 Wolfendale, 10.5 Mass. 401; Marshall v. Clary, 44 Ga. 513. 
 
 »9:^Iarshall v. Clary, 44 Ga. 513. 
 
 1 Wintermute v. Post, 4 Zabr. 420. 
 
 2 Campbell v. Pettengill, 7 Grecnl. 12(). 
 
 sSwansey v. Brec-k, 10 Ala. 533; Gallery v. Prindlo, 14 Barb. 186. 
 4Tassey v. Churcli, 4 Wnlts & S. 346. 
 
 5 Campbell v. Petlcngill. 7 Grcenl. 120; Gallery v. Prindle, 14 Barb. 
 186. 
 
 6 Browne v. Coit, 1 McCord, 408.
 
 §§309, :nO. l'(H;.\l AX[> VAIMKTIKS OF ACCKI'TAN( 1.. H'T 
 
 Where the aceeptauce is to pay out of the first money 
 received, the acceptor is l.ouiul t(. pay from time to time, 
 on reasonable request, such funds as he receives from the 
 drawer; and a juilgment for a certain sum which he received 
 is no bar to another action for a sum subsequently received."^ 
 
 § 309. As to qualified acceptances. — As an acceptance* may 
 vary frcm the tenor of the order by introducing a condition, 
 so it may vary fn. lu it as 1.. the sum, liiuo, place, or mode of 
 payment.^ Such an acceptance is generally called a quali- 
 fied acceptance, and the same principles govern it as govern 
 a conditional acceptance. 
 
 By receiving such qualified acceptance the holder dis- 
 charges all antecedent parties, unless he obtains their con- 
 sent." Thus, if the bill be addressed to the drawees at their 
 place of residence, and it is accepted, payable at a different 
 town, it is a material variation if the holder receives it, and 
 does not protest for nonacceptance;^" but a bill addressed 
 generally to the drawee, in a city, may be accepted, payable 
 at a particular bank in the city." If the drawee accept to 
 pay at a certain future day, different from that named in 
 the draft, and the holder receives such acceptance, it will 
 bear grace like all engagements by negotiable paper to pay 
 at a certain time.^^ 
 
 As has been stated, an acceptance payable at a particular 
 place does not constitute a qualified acceptance, but the rule 
 is othenvise if the acceptance specifies as the place of pay- 
 ment a particular place " only, and not othen\ase or else- 
 where." 
 
 § 310. Conditions to written and verbal acceptances — Tf 
 any conditions are annexed to a written acceptance, they 
 
 7 Perry v. Harrington, 2 Mete. (Mass.) .368. 
 
 SByle's on Bills [*180], 310 ; Chitty on Bills [*203], 342; Vanstrum 
 V. Liljengren, 37 Minn. 191. 
 
 OByles on Bills [*18()]. 310; Sebag v. Abilhol. 4 Maule & S. 462; 
 Gibson v. Smith, 7-5 Ga. 33. 
 
 10 Niagara Bank v. Fairnian Countj', 31 Barb. 403. 
 
 11 Troy City Bank v. Launian, 19 N. Y. 477; Meyers v. Standart, 19 
 Ohio (N. S.), 29. 
 
 12 Green v. Raymond, 9 Nebr. 295.
 
 IDS ACCEPTAACK. § 310. 
 
 isliould appear on its face, it has been laid down that ac- 
 ceptance may be rendered conditional by another contem- 
 poraneous writing-/'"' but such condition could have no effect 
 against a bona fide holder ignorant of it.^^ The terms of an 
 acceptance in writing cannot be varied by any contempora- 
 neous parol agreement, as that is against the first principles 
 of the law of evidence.^^ Where a verbal acceptance is com- 
 petent, a condition annexed to a verbal acceptance may be 
 shoAvn, because it does not vary or contradict the contract, 
 but shows what the contract was.^^ But the acceptor having 
 one accepted absolutely, cannot by subsequent declarations 
 annex a condition to his liability.^y 
 
 ^ . — . . . ■ , - 
 
 i:! l?o\rf'rbank v. Monteiro. 4 Taunt. 884. 
 
 i-i United States v. Bank of Metropolis, 15 Pet. 377; Montague v. 
 Perkins, 22 Eng. L. & Eq. 516. 
 
 15 Adams v. Wordley, 1 M. & W. 347; Goodwin v. McCoy, 13 Ala. 
 271 : Foster v. CliflFord. 44 Wis. 569. 
 
 16 Edwards on Bills, 426. 
 
 17 Wells V. Brigham, 6 Cush. G.
 
 CHAPTER XI. 
 
 PRESENTflENT FOR PAYMENT. 
 
 § 311. Obligations of maker, acceptor, drawer, and indorser, 
 respectively, as to payment; general rule. — The engagement 
 entered into by the acceptor of a bill and the maker of a 
 note is, that it shall be paid at its maturity — that is, on 
 the day that it falls due, and at the place specified for pay- 
 ment, if any place be designated — upon its presentment. 
 This engagement is absolute, but that of the drawer of a 
 bill and the indorser of a bill or note is conditional, and con- 
 tingent upon the true presentment at maturity, and notice 
 in case it is not paid. The maker and acceptor are bound, 
 although the bill or note be not presented on the day it falls 
 due;^ but the drawer and indorsers are discharged if such 
 presentment be not made, unless some sufficient cause ex- 
 cuses the liolder for failure to perform that duty." It is 
 important, therefore, to ascertain how the presentment 
 should be provided for by the holder of the bill or note, lest 
 by failure to observe the necessary precautions, the drav.er 
 and indorsers may be discharged, and the solvency of his 
 debt destroyed or impaired. We shall consider, therefore, 
 in order: 
 
 (1) The person by and to whom the instrument should be 
 presented. 
 
 (2) The time of presentment. 
 
 (3) The ])lace of presentment. 
 
 (4) The mode of presentment. 
 
 1 Sims V. National Com. Bank. 7.'? Ala. 2.51. 
 
 2 IVrapnuler v. Bank of Washington, 3 Pet. 92; Cox v. National Bank, 
 100 U. S. 712; Harvey v. Girard Nat. Bank. ll!i Pa. St. 212. 
 
 [199]
 
 200 PKESENTMEXT FOR PAYMENT. § 312. 
 
 SECTION I. 
 
 BY AND TO WHOM THE INSTRUMENT SHOULD EE PRESENTED. 
 
 § 312. By whom — Any bona fide holder of a negotiable in- 
 strument, or anyone lawfully in possession of it for the 
 purpose of receiving payment, may present it for payment 
 at maturity.^ A notary public, or any agent duly authorized, 
 may make presentment of the instrument for payment; and 
 it is well settled that this authority need not be in writing.'* 
 
 The mere possession of a negotiable instrument which is 
 payable to the order of the payee, and is indorsed by him 
 in blank, or of a negotiable instrument payable to bearer, 
 is in itself sufficient evidence of his right to present it, and 
 to demand payment thereof.^ And payment to such person 
 will always be valid, unless he is known to the payor to have 
 acquired possession wrongfully. And if the party holding 
 possession of a negotiable instrument which is not indorsed by 
 the payee, or has been indorsed by him specially, to another, 
 and has not been indorsed over by such indorsee but has 
 been placed in the holder's hands as agent, for the purpose 
 of receiving payment, such agent may present it for pay- 
 ment, and payment to him will be valid; even, as it has been 
 held, although made in a manner different from that pro- 
 vided for in the instructions to the agent. The fact that 
 the instrument is not indorsed by the owner is, as has been 
 held, under such circumstances, of no importance. Such 
 indorsement would be necessary to the negotiation of the 
 instrument, but would not be necessary to the validity of the 
 payment. 
 
 As has been indicated, the presentment may be made by 
 the holder or owner himself, or by his duly authorized agent, 
 and his authority need not be in writing, although possibly 
 the maker or acceptor may insist upon a written authori- 
 
 -Leftly V. Mills, 4 T. R. 170; Bachellor v. Priest, 12 Tick. 390. 
 
 4 Bank of Utioa v. Smith, 18 Johns. 230; Hartford Bank v. Barry, 
 17 Mass. 94. 
 
 5 Weber v. Orten, 01 Mo. 080; -Tackson v. Love. 82 N. C. 40-5.
 
 §§313,314. BY AND TO WHOM MADE. 201 
 
 zatioii or indorsement to the a-cuL Ijciurc bein- re.iuin-l t.. 
 make payment.'' 
 
 §313. Possession of unindorsed instrument. — When, how- 
 ever, u bill or note uniudur:ied by the payee, or indorsed by 
 rlie ])ayee specially, and unindorsed by his indorsee, is in 
 (he possession of another person, the question whether or 
 not its bare possession is evidence of his right t(j demand 
 payment, is of a ditVerent character. Without the indorse- 
 ment of tlie payee or special indorsee, such possession ^vould 
 clearly not entitle llic holder to tlio ])rivileg-es of a bona fide 
 holder for value, as at best he would only hold the ("(inital)le 
 title to the instrument, and could not sue at law upon it as 
 a ground of action." If, however, the holder have and ex- 
 hii)it extraneous evidence of his owTiership of the instru- 
 ment, such, for instance, as an assigimient and mortgage 
 duly executed, this will suffice ^nthont indorsement, and 
 the party to whom it is presented would then have no right 
 to insist on an indorsement.® 
 
 § 314. Presentment by indorser. — Whether or not an in- 
 dorser of a bill or note which has upon it a subsequent 
 special indorsement, and no prior indorsement in blank, is 
 shown by mere possession of the paper to be entitled to 
 demand payment, has been much questioned. There are a 
 number of cases which hold that such an indorser cannot 
 denuuid payment, for the reason that it would seem from 
 the face of the paper itself that he had parted ^\ith his title; 
 and that a receipt from the last indorsee, or a reindorse- 
 ment to him, would be necessary to re-establish it. This 
 doctrine was laid down in an early case by the Supreme 
 Court of the United States,^ and some of the State tribunals 
 have taken the same %aew;^^ but in a more recent case the 
 
 •■•Tiodeman on Bills and Xotoi^. .'^11. note 2. 
 
 7 Hull V. Conover. 3.1 Tnd. 372: Portprn v. Cushman. 10 111. .572: Baus- 
 niann v. Kelloy. 3S IMinn. 205. 
 
 8 Pease v. AVarron. 2.5 'SUch. 0: Daniel on Negotiable Instruments, 
 §§ 574, 575. 
 
 '•Weleh V. Linclo. 7 Craneh. 150. 
 
 10 Thompson v. Flower, 13 :Mart. 301: Sprigg v. Cuny, 19 Mart. 253; 
 Dehers v. Harriott, 1 Show. 103.
 
 ■2()-2 PKESEXTMENT FOR PAYMENT. § 315. 
 
 8upreme Court of tlie United States expressed the opposite 
 opinion, wliieh seems to us the correct one.^^ Some of the 
 cases hokl that possession of the hill hy a prior indorser is 
 sulhcient where the subsequent indorsements are cancelled ;^^ 
 but the better view seems to be, and it is sustained by most 
 respectable authority, that it makes no difference that the 
 subsequeui indorsements remain uncancelled.^^ The party 
 may not be still the proprietor in interest of the instrument, 
 but his possession of it would be prima facte evidence that 
 he had paid it himself to a subsequent indorsee, and had 
 reacquired the right to demand payment. And it would 
 also be consistent with the idea that he was holding it and 
 suing for the benefit of a subsequent indorsee.^"* 
 
 5< 315. When holder is dead. — If the holder die before the 
 time for j)resentment for payment, it must be made by his 
 personal representative.^'' If there be no personal repre- 
 sentative at the time, presentment and demand within a 
 reasonable time after his appointment will be sufficient to 
 charge subsequent parties, although presentment and de- 
 mand were not made at maturity.^" 
 
 If the holder's estate has passed to an assignee in bank- 
 ruptcy, the assignee, or some person authorized by him, 
 should make presentment.^^ 
 
 If the holder is a feme sole, and she has become a married 
 woman at maturity, the presentment should be made by her 
 husband; and a presentment by her, Avithout liis consent or 
 authority, would be insufficient to charge the maker, or 
 validate a payment. If the note belonged to a partnership, 
 
 m ■ .-■-. ... --.11 — ' 
 
 11 Dugan V. United States, 3 Wheat. 172. 
 
 12 Bank of Utica v. Smith, 18 Johns. 230; Bowie v. Duvall, 1 Uill & J. 
 ITo: Chautauqua County Bank v. Davis, 21 Wend. r)84. 
 
 13 Dugan V. United States, 3 \Mieat. 172; Lonsdale v. Brown. 3 Wash. 
 C. C. 404; Bank of Kansas City v. Mills, 24 Kan. 610. 
 
 14 Bank of United States v. United States, 2 How. 711: Bachellor v. 
 Priest, 12 Pick. 399; Merz v. Kaiser, 20 La. Ann. 377. 
 
 15 1 Parsons on Notes and Bills, 360; Story on Notes, § 249. 
 T! White V. Stoddard, 11 Gray, ,528. 
 
 1" 1 Parsons on Notes and Bills, .3(50: Edwards on Bills, 494.
 
 §§3in, .'517. !!Y AM) Tf) WHOM MADE, 20o 
 
 and one lueiuhLT he dead ut inuturity, |>re-eiiUiicul j^huuld 
 be made by the survivor.^** 
 
 §316. To whom; general rule. — rrescntmout for payment 
 must he made to the drawee or acceptor of tlie bill, or maker 
 of the note, or to an authorized agent. A personal demand 
 is not necessary, and it is sufficient to make the demand at 
 his usual residence or place of business of his vdie or other 
 agent; for it is the duty of an acceptor or promisor, if he is 
 not ])resent himself, to leave provision for the payment of 
 his bills or notes. ^^ 
 
 There is no doubt that a clerk found at the counting-room 
 of the acceptor or promisor is a competent party for pre- 
 sentment for payment to be made to, without showing any 
 special authority given him.^*^ But where the protest stated 
 the mere fact of ])i-esentment " at the office of the maker," 
 it -wall be considered insufficient, as not showing that the 
 paper was presented to party at the office authorized to pay 
 or refuse payment. ^^ A demand upon the sers^ant of the 
 owner '' who used to pay money for him," was held suffi- 
 cient in England."^ 
 
 § 317. Presentment to person on premises. — If presentment 
 be made at the place specified in the instiiiment, or in the 
 case of one payable generally at the place of business of 
 the acceptor or maker during business hours, or at his domi- 
 cile during a reasonable hour of the day, it is sufficient if 
 it be made to any person to be found upon the premises, 
 especially if the maker be absent or inaccessible."^ Where 
 presentment was made to the wife of the maker, she inform- 
 ing the holder that her husband was out of tovra, it was held 
 
 18 Daniel on Negotiable Instruments, § 578. 
 
 19 Matthews v. Haydon, 2 Esp. .509 ; Brown v. McDerniott. ;i Esp. iCtn. 
 30 Bradley v. Northern Bank, GO Ala. 2.59 ; Stainbaek v. Bank of Vir- 
 ginia, 11 Gratt. 260. 
 
 21 Nave V. Richardson, 36 Mo. 130. 
 
 22 Bank of Enfrhuid v. Newman. 12 Mod. 241. 
 
 2.-? Cromwell v. Ilynson, 2 Campb. r)9ti ; Phillips v, Astberg, 2 Taunt, 
 20G; Draper v. demons, 4 Mo. 52.
 
 20-1: PEESKNTMEXT TOK I'AVMKXT. §§318,319. 
 
 sufficient.^ And so it was deemed sufficient to charge the 
 indorscr wlu'vc thc^ holder presented the bill to an inmate 
 of the maker's house, who was coming out, and who stated 
 that the acceptor had removed — the holder leaving a card 
 containing notice for the acceptor of the maturity of the 
 bill.^^ Where there is no one to answer, presentment at 
 the maker's dwelling is sufficient."^ 
 
 § 318, When acceptor or maker is dead. — If the acceptor 
 or maker be dead at the time of the maturity of the bill or 
 note, it should be presented to his personal representative, 
 if one be appointed, and his place of residence can, by reason- 
 able inquiries, be ascertained."^ If there be no personal 
 representative, then presentment should be made, and pay- 
 ment demanded, at the dwelling-house of the deceased, if 
 the instrument were payable generally.^* But if it was 
 dra^ni payable at a particular place, then it will be sufficient 
 that it was presented at such place.^^ 
 
 § 319. Where there are several promisors. — When the note 
 is executed by several joint promisors who are not partners, 
 but liable only as joint and several promisors, it has been 
 held, and, as we think, correctly, that presentment should 
 be made to each, in order to fix the liability of an indorser.^'^ 
 But presentment of a bill drawn upon or accepted by, and 
 of a note executed by, a copartnership firm, is sufficient, if 
 made to any one of the members of such firm.^^ And if the 
 
 24Moodie v. :\IorrtilI, 1 Const. Rop. 367. 
 
 25 Buxton V. Jones, 1 M. & G. 8.3; Stoiy on Bills (Bennett's ed.), 
 § .350, note 1. 
 
 20 Stivers v. Prentice, 3 B. Mon. 4G1. 
 
 27 Magruder v. Union Bank, 3 Pet. 87 ; Juniata Bank v. Hale, 16 Serg. 
 & R. 167. 
 
 28Magruder v. Union Bank, 3 Pet. 87; Juniata Bank v. Hale, 16 Serg. 
 & R. 167; Story on Notes, § 253. 
 
 29 Boyd's Admr. v. City Sav. Bank, 15 Gratt. 501; Holtz v. Boppe, 37 
 N. Y. 634; Philpot v. Bryant, 1 Moore & P. 754. 
 
 30 Blake v. MoMillen. 33 Iowa. 150: Union Bank v. Willis, 8 Mete. 
 (Mass.) 504; Arnold v. Dresser, 8 Allen, 435. 
 
 31 Branch of State Bank v. Mcl^ran, 26 Iowa, 306; Shedd v. Brett, 1 
 Pick. 401.
 
 § 320. TIME Ol' I'KESENTAIENT. 205 
 
 signature of the parties entitled to presentment be appar- 
 ently that of a i)artnersliip, as, for instance, if signed 
 " Waller iS^ liurr," presentment to either is sufficient.^" 
 
 Even after the dissolution of the iirm, presentment to any 
 one of the partners is sufficient, for as to the bill or note 
 upon which thov are liable, the liability continues until duly 
 satislied or discharged. ''"^ 
 
 In the event of the death of one of the members of 
 the firm to which presentment should be made before the 
 maturity of the bill or note, the presentment should be made 
 to the survivors, and not to the personal representative of 
 the deceased, because the liability devolves upon the sur- 
 viving partner.^'* The same rule obtains in the event of 
 the death of one of two or more joint makers not partners.^^ 
 
 SECTIOX IT. 
 
 TniE OF PRESENTMENT. 
 
 § 320. General rule as to time. — In respect to the maker 
 of a note and the acceptor of a bill, it is not important 
 ujDon what day the presentment is made, provided it be 
 made at some time before the statute of limitations bars 
 action against them.^^ In respect, however, to the drawer 
 of a bill and the indorser of a bill or note, it is essential to 
 the fixing of their liability that the presentment should be 
 made on the day of maturity, provided it is within the power 
 of the holder to make it."'' If the presentment be made before 
 the bill or note is due, it is entirely premature and nugatory, 
 and, so far as it affects the drawer or indorser, a perfect 
 nullity.^^ And if it be made after the day of maturity, it 
 
 32 Erwin v. Downs, 15 X. Y. 375. 
 
 33 Crowley v. Barry. 4 Gill, 104; Hubbard v. Matthews, 54 N. Y. 50. 
 
 34 Cayuga Bank v. Hunt, 2 Hill, 635; Story on Bills, §§ 346-.362. 
 
 35 Daniel on Negotiable Instruments, § 596. 
 
 36Chitty on Bills [*354]. .390: Metzger v. Waddell. 1 N. Mex. 409. 
 
 3' 1 Parsons on Notes and Bills, 373; Pendleton v. Knickerbocker Life 
 Ins. Co., 7 Fed. 170. 
 
 38 Griffin v. Gofl. 12 Johns. 423: Jackson v. Newton, 8 Watts, 401; 
 Fanners' Bank v. Duvall. 7 (;ill & J. 78.
 
 206 PKESEXTMKXr FOR PAYMENT. §§321,322, 
 
 can, as matter of course, be of no ctfeet, as the drawer or 
 imlorser will already have been discharged, unless there 
 were suthcient legal excuse for the delay.^^ The evidence 
 must be distinct as to the promptness of the presentment 
 or the excuse for delay, as the burden of proof is on the 
 plaintiff.'" 
 
 §321. Note payable in instalments. — If a note be pay- 
 able in instalments, the presentment should be made on 
 each consecutive instalment as it falls due, as if it were (as 
 in fact it is legally considered) a separate note in itself.'*^ 
 It would be different, probably, if the condition were an- 
 nexed to the note that upon failure to meet any instalment, 
 the whole should fall due, in which case notice should be 
 communicated to the drawer or indorser that the whole 
 sum was due, and the holder looked to him for payment.*^ 
 If no time for payment be named in the bill or note it is 
 payable on demand ;'^ and payable " on demand at sight," 
 is equivalent to payable " at sight." ** 
 
 § 322. At what hour of the day presentment should be made. 
 — ■ When the bill or note is made payable at a bank, it 
 should be presented during banking hours, the parties exe- 
 cuting their paper payable at a particular place, being bound 
 by its usage; and in such case a presentment after banking 
 hours is sufficient.'^ But it is settled that when a bill or 
 note is payable at a bank, a demand made at the bank after 
 banking hours, the officers being there, and a refusal, the 
 cashier or teller stating that there were no funds, is suffi- 
 cient.'" But if the instrument be payable generally " at 
 
 39 Windliam Bank v. Norton, 22 Conn. 213. 
 
 40 Robinson v. Blen. 20 Me. 109; Pendleton v. Knickerbocker Life- Ins. 
 Co., 7 Fed. 170. 
 
 41 Oridge v. Sherborne, 11 M. & W. 374. 
 
 42 1 Parsons on Noies and Bills, 374. 
 
 43Collin.s V. Trotter, 81 l\Io. 278; Thompson v. Ketchum, 8 .Johns. 189; 
 Bowman v. McChesney. 22 Cratt. 609. 
 
 44 Bowman v. McChesney, 22 (Jratt. 609. 
 
 45 Parker v. Gordon, 7 East, 385; Elford v. Teed, 1 Maule & S. 28. 
 
 46 Reed V. Wilson, 41 X. .J. L. 29; Salt Sprinjjs Nat. Bank v. Burton, 
 58 N. Y. 432; First Nat. Bank v. Owen, 23 Iowa, 18.5.
 
 g ;>28. TIMK Oi- I'UESE-NTMKNT. -0. 
 
 bank," no particular bank being- named, the hour will be 
 determined by the usual banking hours at the several banks 
 of tlic place where it is payable."'' It is for the jury to say 
 what are business hours, and in fixing them otherwise than 
 in respect to tho banks, they are to have reference to the 
 general hours of business at the place, rather than to the 
 custom of any particular trade.'** The courts of England 
 take judicial cognizance of the banking hours of I>ondon, 
 but not of other cities or towns in the Empire,-*'* while the 
 Anun-ican courts take judicial notice of the banking hours of 
 any large city within the jurisdiction of the court trying the 
 cause; i. c, the courts of ^[assachusetts would not take cog- 
 nizance of the banking hours of the city of Xew York, but 
 would of Boston.-'^ 
 
 If the instrument, by its terms, is not payable at a bank 
 or other named place, presentment may be made at any 
 reasonable hour of the day, within what are termed '' busi- 
 ness hours," which really means throughout the whole day 
 to the hours of rest in the evening.^^ 
 
 ^ 323. Business hours in reference to business places and 
 places of residence. — When 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 com- 
 petent to give an answer. It is only when presentment is 
 at the residence that the time is extended to the hours of 
 rest.^"* But presentment at any hour cannot be considered 
 unreasonable if any person competent to answer be found 
 there who gives an answer refusing to ]>ay,^' and an aver- 
 
 47 United States^Bank v. Carneal, 2 Pet. 543; Church v. Clark. 21 
 Pick. 310. 
 
 •ts Thompson on Bills, 302. 
 
 40 Parker v. Gordon, 7 East, 38,5; Jameson v. Swinton, 2 Taunt. 22.i; 
 Hare v. Henty. K) C. B. (N. S.) fir.. 
 
 •'■x» Morse on Baukinp, 371. 
 
 r.1 Salt Sprinjis Nat. Bank v. Burton, 5S N. Y. 432; Skelton v. Dunston, 
 92 111. 49. 
 
 r.2 Lunl V. Adams. 17 Me. 230. 
 
 ^3 Banlay v. Bailey, 2 Camph. 427. 
 
 r>4Garnott v. Woodcock, 1 Stark. 47"); (bitty on Bills [*3S7], 4oS.
 
 208 PPvESEXTMEXT FOR TAYMKNT. § 324. 
 
 ineiit of preseulnifiil and Jeiuand at the makers office has 
 heeu held to import that it was during the usual hours of 
 business.^^ 
 
 § 324. When instiniment payable on demand. — All bills of 
 exchange payable on demand are closely assimilated to 
 checks, and contemplate the immediate payment of the 
 amount called for. They are payable innnediately on pre- 
 sentment, without grace, and if the drawee and the payee 
 or indorsee reside in the same place, it is laid down by a 
 number of the authorities that they must be presented 
 within business hours of the day on which they are drawn 
 in order to hold the drawer in the event of the failure of 
 the drawee to honor them.^''' And that if the drawee re- 
 sides in a different place they must be forwarded by the 
 regular post of the day after they are received.^' But these 
 rules are not inflexible. AVhat is reasonable thne must de- 
 pend upon circumstances and in many cases upon the time, 
 the mode, and the place of receiving the bills, and upon the 
 relations of the parties between whom the question arises.^*' 
 AVhere the draft required indorsement by a school board, 
 which had to be convened, delay of a week to forward it 
 was held justifiable.^*^ 
 
 Promissory notes payable on demand would seem to stand 
 on a somewhat different footing. In England a note on de- 
 mand is regarded as a continuing security which it is not 
 necessary to present for payment on the next day when the 
 parties reside in the same place; or to send by the post of 
 the next day when they reside in different places ;^° but in 
 the United States, as a general rule, a different view is 
 
 55 Wallace v. Crillco, 46 Wis. 577; Daniel on Negotiable Instruments, 
 § 003. 
 
 56Kampmann v. Williams. 70 Tex. .571 ; McMonigal v. Brown, 45 Ohio 
 St. 504. 
 
 STChi'tty on Bills (13th Am. ed.), 432; Parker v. Reddiek, 65 Miss. 240. 
 
 58 Morgan v. United States, 113 U. S. .501; Marbourg v. Brinkman, 
 23 Mo. App. 513. 
 
 59Muncy Borough School Dist. v. Commonwealth, 84 Pa. St. 464. 
 
 CO Morgan v. United States, 113 U. S. 501; Brooks v. Mitchell, 9 
 M. & W. 15.
 
 g 325. TIME OF I'UESENTMEXT. 200 
 
 taken, and payment must be speedily demanded, in order 
 to preserve recourse against the indorser, and to preserve 
 the note from defenses which may be made against overdue 
 papor.*'^ It is better in all cases where the question is not 
 settled, to decline taking a note on demand by indorsement; 
 or if taken, to present it with the utmost dispatch. But 
 if the note is payable on denuuid with interest, it is regarded, 
 both in England and the United. States, as a continuing in- 
 terest-bearing security. In such case " it would be contrary 
 to the general course of business to demand payment short 
 of some proper point for computing interest, such as a 
 quarter, a half year, or a year;" but the authorities are in 
 painful contrariety.^ 
 
 § 325. True principle involved; summary. — Where a prom- 
 issory note payable on demand was indorsed at the time of 
 making, and whether it bore interest or not, it would be- 
 come, by the very act of indorsement, a draft by the indorser 
 upon the maker; and the indorsee holding it should regard 
 it, as it is in fact, a demand through him for the amount 
 due the indorser. And it should, therefore, be presented 
 immediately, subject only to such qualifications as apply to 
 a bill payable at sight. ^^ 
 
 Byles, in his work on bills, gives the following sound and 
 correct summary on the subject of demand paper: " A 
 common promissory note payable on demand differs from 
 a bill payable on demand, or a check, in this respect: the 
 bill and check are evidently intended to be presented and 
 paid immediately, and the drawer may have good reasons 
 for desiring to withdraw his funds from the control of the 
 drawee without delay; but a common promissor^^ note pay- 
 able on demand is very often originally intended as a con- 
 tinuing security, and afterward indorsed as such. Indeed, 
 it is not uncommon for the payee, and afterward the in- 
 
 61 1 Parsons on Notes and Bills, 37G, 377 ; Keyes v. Fenstermaker. 24 
 Cal. 331. 
 
 62 Daniel on Negotiable Instruments, §§ G08-G10, and cases cited. 
 
 <>3 Daniel on Negotiable Instruments, § 610; Bassenhorst v. Wilby, 45 
 Ohio St. 339. 
 
 14
 
 210 PRESENTMENT FOK rAVMKXT. § 32G. 
 
 dorsee, to receive from the maker iuterest periodically for 
 many years on sncli a note. And sometimes the note is ex- 
 pressly made payable with interest, which clearly indicates 
 the intention of the parties to be, that though the holder 
 may demand pa}inent immediately, yet he is not bound to 
 do so. It is, therefore, conceived that a common promis- 
 sory note payable on demand, especially if made payable 
 ^^'ith interest, is not necessarily to be presented the next 
 day after it has been received in order to charge the in- 
 dorser; and when the indorser defends himself on the ground 
 of delay in presenting the note, it will be a question for 
 the jury whether, under all the circumstances, the delay of 
 presentment was or was not imreasonable." ^* / 
 
 § 326. Days of grace ; origin and nature of — They were - 
 originally days allowed by way of favor to the drawee of a 
 foreign bill to enable him to provide funds for its payment 
 without inconvenience; and were called " days of grace," or 
 " respite days," because they were gratuitous, and dependent 
 on the holder's pleasure, and not to be claimed as a right 
 by the person on whom it was incumbent to pay the bill.''" 
 By custom, however, they became imiversally recognized; 
 and although still termed " days of grace," they are now 
 considered wherever the law merchant prevails as entering 
 into the constitution of every bill of exchange^ and nego- 
 tiable note, both in England and the United States, and 
 form so completely a part of it that the instrument is not 
 due in fact or in law until the last day of grace.®® There- 
 fore a demand of payment on the day before or after the 
 third day of grace would not authorize a protest, or charge 
 drawer or indorser. ^^ And interest is chargeable on the 
 period of grace allowed without impeachment as usurious."^ 
 
 fi*Byle3 on Bills (Sharswood's ed.), 338. 
 GSChitty on Bills [*374], 422. 
 
 6«Bank of Washington v. Triplott, 1 Pet. 2/5; Ogden v. Saunders, 12 
 Wheat. 213; Bell v. First Nat. Bank, 115 U. S. 373. 
 
 67 Bank of Washington v. Triplett, 1 Pet. 2.'); Donegan v. Wood, 49 
 Ala. 242. 
 
 68 Bank of Utica v. Wager, 2 Cow. 712; Ogden v. Saunders, 12 Wheat. 
 213.
 
 § 327. TIME OF I'UKSKXTMENT. L'll 
 
 'Ihis indulgence was often important to the drawee, wlio 
 niiglit not be instantly in funds, nor advised that the bill 
 would at that time be presented for payment; and alsa 
 even when it was accepted, because of the scarcity of the 
 precious metals in which payment was to be made. And 
 they fixed a limit to the time wliich the holder might in- 
 dulge the payor ^^'ithout being guilty of laches in not pro- 
 testing it.'^'' 
 
 § 327. What bills and notes entitled to grace ; whether sight 
 bills entitled to. — All bills of exchange and negotiable notes 
 are entitled to grace,'" except those payable on demand'^ 
 or without specilication of time, in which case on demand 
 without grace is understood,'^" or those expressly payable 
 Anthout grace.'^^ The authorities are uniform in support 
 of this statement of the law, except in respect to its inclusion 
 of sight bills and notes, which by some is denied and by 
 others doubted. In England there has not been, that we 
 are aware of, a direct decision of the question; but it has 
 been taken for granted in some cases, and distinctly inti- 
 mated in others, that a sight bill or note is entitled to three 
 days' grace;''* and the weight of authority in the United 
 States is to the same effect.'^^ The expression " after sight " 
 in a bill of exchange has a different signification from the 
 like expression in a promissory note. In a bill of exchange 
 it means after acceptance, or protest for nonacceptance, and 
 not after a mere private exhibition to the drawee, for the 
 sight must appear in a legal way.*^® But a note is incapable 
 of acceptance, and the words " at or after sight " used in it 
 
 fi9 Stoiy on Bills, § 3.33. 
 
 70 Brown v. Chancellor, 61 Tex. 440; 1 Parsons on Notes and Bills, 404. 
 
 71 Edwards on Bills, 523; Oridge v. vSherborne, 11 M. & W. 374; Wood- 
 rufT V. :\rerchants' Bank, 2.j Wend. 073. 
 
 72 Story on Bills, § 343; First Nat. Bank v. Price, 52 Iowa, 570; 1 
 Parsons on Notes and Bills, 381. 
 
 73 Daniel on Negotiable Instruments, § 633. 
 
 74 Webb V. Fairmaucr, 3 IM. & W. 473 ; Coleman v. Sayer. 1 Bam. 303 ; 
 Dehers v. Harriot, 1 Show. 1G3; Jansen v. Thomas, 3 Doug. 421. 
 
 75 Daniel on Negotiable Instruments, § 617. 
 
 76 Campbell v. French, 6 T. R. 212; Mitchell v. De Grand, 1 Mason, 176.
 
 212 PRESENTMENT FOR PAYMENT. § 328. 
 
 would merely import that payment was not to be demanded 
 until it had been again exhibited to the maker.'" If the bill 
 or note be payable in instalments, . it is entitled to grace on 
 each instalment, for it is really so many instruments in one 
 form." If it is payable " on demand at sight," it is the 
 same as if payable " at sight." '^^ 
 
 § 328. Number of days allowed by law merchant and by 
 custom. — The law merchant, as it prevails in England and 
 the United States, limits the allowance of grace to three 
 days,^ and although it is settled that by special established 
 usage in a particular locality it may be denied altogether,, 
 or a different nmnber of days may be granted,*^ the courts 
 take judicial notice of the period fixed by the law merchant, 
 and w-ill recognize that only unless the usage varying it is 
 alleged and proved.^- In the District of Columbia the usage 
 at one time prevailed to allow four days, and it was sus- 
 tained as binding upon parties to negotiable instruments 
 there payable, by the United States Supreme Court.^ It 
 extended, however, only to notes discounted in bank.®* In 
 Louisiana, at one time, ten days were allowed; but this was 
 changed by statute to conform to the law merchant in the 
 United States,®^ and, of course, no custom can affect a posi- 
 tive enactment.®" In the absence of any statute, the usage 
 of banks in particular localities in allowing grace, and the 
 number of days, may alter the law merchant in that particu- 
 lar.®^ The following principles on this subject may be re- 
 
 77 Holmes v. Kerrison, 2 Taunt. 323; Sutton v. Toomer, 7 B. & C. 416. 
 TSQridge v. Sherborne, 11 M. & W. 374. 
 
 79 Dixon V. NuttaU, 1 Cromp., M. & R. 307. 
 
 80 Hill V. Lewis, Skin. 410; Wood v. Corl, 4 Mete. (Mass.) 203. 
 
 81 Renner v. Bank of Columbia, 9 Wheat. 581 ; Mills v. Bank of United 
 States, 11 Vnieat. 431. 
 
 82 Renner v. Bank of Columbia, 9 Wheat. 581; Reed v. Wilson, 41 
 
 N. J. L. 29. 
 
 83 Mills V. Bank of United States, 11 Wheat. 431. 
 
 84 Cookendorf er v. Pre;:ton, 4 How. 317. 
 
 85 Dubreys v. Farmer, 22 La. Ann. 478. 
 
 86 Perkins v. Franklin Bank, 21 Pick. 483. 
 
 <ir Renner v. Bank of Columbia, 9 Wheat. 581; Adams v. Otterback, 
 15 How. 539.
 
 R 329. Tl.Mi: OF IMUiSKNTMEXT. 213 
 
 garded as established: First. That the usage must bo 
 notorious, in order thai an iuferenec may be drawn that it 
 is known to the public, and especially to those dealing with 
 the bank, ami therefore create the further inference of 
 expressed or implied assent. Second. That when a usage 
 has been sanctioned by judicial decision it becomes settled 
 law. No further proof is necessary to establish it, and no 
 evidence is admissible to controvert the law laid down by 
 the court. Third. That it should apply to a place rather 
 than to a particular bank. Fourth. That it need not be 
 kno^^^l to the party dealing with the bank at a particular 
 place.^® 
 
 § 329. The term " month " and computation of months. — 
 By the coumion law of England a month is deemed a lunar 
 month, and is computed accordingly in construing common 
 law contracts and statutes ;^'^ but by the law merchant, both 
 in England and the United States, a month is construed to 
 mean a calendar month in all cases of negotiable instru- 
 ments, and of mercantile contracts.^ Therefore a bill dated 
 the first day of January, and payable one month after date, 
 would be payable (grace included) on the fourth day of 
 Eebruai-y; and one dated February first, payable one month 
 after date, w^ould likemse be payable (grace included) on the 
 fourth day of :^£arch, although February is two, or three 
 days (in leap-year), shorter than Januar^^ 'SMien one month 
 is longer than the next succeeding month, the computation 
 of a month does not cany it into a third month. Thus a 
 month dating from the thirty-first of January would expire 
 on the twenty-eighth or twenty-ninth of Febniary, as the 
 case might be; and in leap-year, a month counting from 
 the thirty-first, thirtieth, or twenty-ninth of January, w^ould 
 end on the twenty-ninth of Febiiiary, and the last day of 
 grace would be :March the third. But if a Itill or note were 
 dated January twentv-ei2;htli, a month therefrom would tor- 
 
 ss Draiii'l on Negotiable Instniments, § G23, and cases cit€d. 
 89Chitty on Bills [*373], 420. 
 
 90 Thomas v. Shoemaker, 6 Watts & S. 179; McMurchey v. Robinson, 
 10 Ohio. 496.
 
 214 I'KESE.XT.MK-NT FOR PAYMEXT. §§ 3130, 331. 
 
 minate on February twenty-eighth, and presentment shouia 
 be on Alarc'h the second."^ 
 
 § 330. As to the computation of days. — In computing the 
 number of days which a bill or note, payable at or in so 
 many days from date, has to i-un, the day of date is always 
 excluded; and if payable at so many days after sight, after 
 demand, or after a particular event, the day of sight, de- 
 mand, or of the happening of the event is likewise excluded.*^^ 
 So, if it be presented on one day, and accepted on another, 
 the day of acceptance is excluded.^" The expressions, " in 
 thirty days," — " in thirty days from date," — " at thirty 
 days," — and " thirty days after date," are synonymous.^* 
 As said in Maine, by Howard, J. : " If there be several 
 notes of the same date, some payable in six months, some 
 in six months from date, and some in six months after date, 
 they all have the same pay day. In all of them the day of 
 the date is excluded." ^^. But if a bill or note without grace, 
 or any noncommercial instrument for payment of money, 
 falls due on a Sunday or a legal holiday, it is not payable 
 until the next regular business day, for the payor is not com- 
 pellable by law to pay on the exact day named, and the 
 next day is the first day that the creditor can demand pay- 
 ment."" But the debtor cannot require the creditor to ex- 
 tend his indulgence beyond three calendar days; and there- 
 fore when grace on a bill or note entitled to it expires on a 
 Sunday or other nonbusiness day, the bill or note would fall 
 due on the day preceding.^^ 
 
 § 331. Calendar by which computed. — The Gregorian cal- 
 endar, or new style of computing time, is adopted in the 
 
 91 Wagner v. Kenner, 2 Rob. (La.) 120; Chitty on Bills t*373], 421; 
 1 Parsons on Notes and Bills, 409. 
 
 92 Coleman v. Sayer, 1 Barn. .'303; Hill v. Norvell, 3 McLean, 583; Lor- 
 ing V. Hallin-,', 15 .Johns. 120; Mitchell v. De Grand, 1 Mason, 170; 
 Barlow v. Planters' Bank, 9 How. (Miss.) 129. 
 
 93ilitchell V. De Grand, 1 Mason, 176. 
 
 94Ammidown v. Woodman, 31 Me. 580; Henry v. .Tones, 8 Mass. 453. 
 
 95 Ammidown v. Woodman, 31 Me. 580. 
 
 96 Salter v. Burt, 20 Wend. 205; Kuntz v. Tcmpel, 48 Mo. 75. 
 97Bussard v. Levering, 6 Wheat. 192; Reed v. Wilson, 41 N. J. L. 29; 
 
 Storv on Bills. § .388.
 
 United States, and everywhere else, except in Russia, and 
 those countries where the Greek Church is the established 
 religion. They use the Julian calendar, or old style, as it 
 is called. There is the difference of twelve days between 
 the two styles; and the addition of that number to the old 
 nuikcs the new style. The 1st of January in St. Petersburg, 
 Russia, is, therefore, the 13th of January in England and 
 the United States. The style of the place of payment, how- 
 ever, always prevails; and if a l)ill were drawn in London 
 on the 1st of September, payable in St. Petersburg on the 
 1st of January, it Avould fall due on the day corresponding 
 to the 13th of January in England; and vice versa. This is 
 because the parties are to be regarded as contracting in 
 reference to the meaning of terms at the place of their ful- 
 fillment."' 
 
 § 332. How grace dispensed with. — By any lan^iage in 
 the bill or note of that import, grace may be disallowed. 
 And such words as '' ^\'ithout grace," or ^' no grace," obvi- 
 ously disallow it; and the word "fixed" has been held to 
 have the same import.^* But the expression " without de- 
 falcation " does not ;^ nor would a mere marginal memoran- 
 dum of the day of the month and year on which the time 
 after date at whicli the instrument was expressed to be pay- 
 able fell due.^ But where a bill at sixty days' sight was 
 accepted on September 14th, payable November 16th, it was 
 held that ISTovember IGth was indicated by the acceptor to 
 be the absolute day of payment, he having intended to allow 
 for grace in his calculation, and that presentment on that 
 day w^as necessary.* 
 
 98 story on Bills, § .331; 1 Parsons on Notes and Bills, .388; Chitty 
 on Bills [*3G9], 417: Daniel on Xecrotiable Instruments, § 632. 
 
 00 Perkins v. Franklin Bank, 21 Pick. 483; Dumford v. Patterson, 7 
 :Mart. 460. 
 
 1 Boll V. First Xat. Bank. 11.5 U. S. 3S2 : McDonald v. Lee, 12 La. 435. 
 . 2 Perkins v. Franklin Bank, 21 Pick. 483. 
 
 3 Bell V. First Nat. Bank, 115 U. S. 382; Kenner v. Creditors, 19 Mart. 
 540.
 
 216 PEESEXTMENT FOR PAYMENT. §§ 333, 334. 
 
 SECTION III. 
 
 PLACE OF PRESENTMENT. 
 
 § 333. When the instrument is payable generally. — The 
 presentment of the bill or note for payment should be made 
 at the city, town, or other ^^lace in which the acceptor or 
 maker has his home or domicile, or his place of business, 
 provided there be no place designated in the instrament or 
 agreed npon by the parties as the place where it shall be 
 paid at maturity.^ If such place is designated or agreed 
 upon, it will be sufficient to make presentment there. ^ And 
 averment of presentment there is always sufficient, without 
 any addition." If the bill be addressed to the drawee in a 
 particular city, as, for instance, to ^'A. B., New York," the 
 city named would be regarded as the place of presentment 
 for payment, if the acceptance be without explanation or 
 condition.^ If the maker or acceptor has both a dwelling- 
 house and a business house in the same citv, town, or other 
 
 t-' / 7 
 
 place, the presentment may be made at either.® And if the 
 maker or acceptor have a dwelling-house or domicile in one 
 city, and a place of business in another, it will, as it seems, 
 be sufficient to present the instrument at either.^ If a bill 
 be payable in a particular town, a presentment at all of the 
 banker's houses there will suffice. ^"^ In such case, where the 
 maker used due diligence to find at what bank the note was 
 left for presentment without success, he was relieved from a 
 penalty for failure to pay it the instant of maturity.-^^ 
 
 § 334. When payor has well-known place of business. — 
 When, however, the maker or acceptor has a well-known 
 
 4 Cox V. National Bank, 100 U. S. 713; Mitchell v. Baring, 10 B. & C. IL 
 
 5 Brent's Exr. v. Bank of Metropolis, 1 Pet. 92; Eason v. Isbell, 47 
 Ala. 4,56. 
 
 6 Cox V. National Bank, 100 U. S. 716; Hawkey v. Berwick, 4 Bing. 136. 
 
 7 Cox V. National Bank, 100 U. S. 716. 
 
 8 Story on Bills, § 236. i 
 » Story on Bills, §§ 236, 3.51; 1 Parsons on Notes and Bills, 422, note. 
 10 Hardy v. Woodroofe, 2 Stark. 319; Byles on Bills [»207], 323. 
 
 n Ans€l V. Olson, 35> Kan. 767.
 
 § 335. PLACE OF PKESENTMENT. 217 
 
 house or place of business where he is accustomed to trans- 
 act his financial affairs, and where demand may be made, it 
 would be safer and more appropriate to present it there. 
 Certainly it would seem unreasonable to expect, during the 
 business hours of the day, to find any one at a private resi- 
 dence to answer respecting the payment of a negotiable in 
 strument, when the maker or acceptor, if ho have any place 
 of business, would be presumably there; and during such 
 business hours due diligence would not appear to have been 
 exerted in demanding payment at his house. ^" If, however, 
 business hours had closed, a presentment at the dwelling 
 would seem sufficient. It is undoubted that a presentment 
 and demand of payment at the place of business of the 
 maker or acceptor is sufficient." Where it was contended 
 that the demand should have been made at the maker's 
 house, it was held otherwise.^" But if the place of business 
 cannot be found, then demand should be made at the maker's 
 house. ^^ 
 
 § 335. Usual place of business ; rule when it is closed and 
 abandoned. — The place of business must be the " usual place 
 of business" of the party, and not that used for a mere 
 temporary occupation;^'' though if it be really the place 
 where he transacts his financial concerns, it matters not 
 that it is a mere office, or desk room in an oflfice with others, 
 and a demand there in his absence made during business 
 hours will be sufficient.^' If the party has closed and aban- 
 doned his place of business at the time the bill or note 
 matures, but has a place of residence in the city or other 
 place where his business was conducted, which could be 
 ascertained by reasonable inquiry, the presentment for pay- 
 
 12 1 Parsons on Notes and Bills, 423. 
 iSLanussa v. Massicot, 3 Mart. 3G1. 
 i-t Sussex Bank v. Baldwin. 2 Harrison, 487. 
 isjarvis v. Garnett, 39 Mo. 271. 
 
 16 Sussex Bank v. Baldwin. 2 Harrison, 487. 
 
 17 Williams v. Hoogewerff, 25 Md. 128; Bank of Commonwealth v. 
 Mudgett, 44 N. Y. 514.
 
 218 PRESEXTMEXT FOR PAYMEXT. §§ 33G, 337. 
 
 meut should bw made at his residence, and a presentment at 
 the former phicc of business \vill not sufhce.^** 
 
 § 336. When presentment is to party in person, place gen- 
 erally unimportant. — When the presentment is made to the 
 maker or acceptor personally, the place is not important, 
 provided there is an express or implied refusal to pay. Pre- 
 sentment at the barn-yard has been held sufficient, the party 
 '^ making no objection, and intimating no readiness to 
 pay;" ^''* and even in the street presentment would seem to 
 be usually good, unless objected to as improper, or some 
 reason "were civen for the refusal.^'* This view seems to us 
 correct. But it would be more business-like not to make 
 demand at such a place, and there are authorities which hold 
 that the party is not bound to pay any attention to a demand 
 so entirely outside of the custom of merchants."^ In a case 
 in ]\Iaine demand on the street of the maker, he having no 
 place of business, and raising no objection, was held suffi- 
 cient to charge the indorser.^^ 
 
 § 337. Due diligence in seeking maker to make presentment, 
 — Whether or not due diligence to find the maker of a note 
 at the place where it is dated, will be sufficient, has been 
 debated. The place of date is prima facie evidence that it 
 is the place of the maker's residence and place of business; 
 and it is sufficient, we should say, to charge an indorser to 
 have the note in that place at the time of maturity, and to 
 make proper inquiry after the place of the maker's residence 
 or place of business, provided that the holder does not know 
 that his residence is elsewhere. ^^ And if it were proved that 
 the maker resided elsewhere, it would not devolve upon the 
 holder the burden of showing that he had made inquiries as 
 
 18 Granite Bank v. Ayres, 16 Pick. 392. 
 If* Baldwin v. Farnsworth, 1 Fairfax, 414. 
 
 2' 1 Parsons on Notes and Bills, 421; King v. Crowell, 61 Me. 244; 
 Townsend v. Dry Goods Co., 85 Mo. 508. 
 
 21 King V. Holmes, 11 Pa. St. 456. 
 
 22 King V. Crowell, 61 Me. 244. 
 
 2.3 Britton v. Nichols, 104 U. S. 757 ; Bank of Fayetteville v. Lutter- 
 loh, 95 N. C. 499; Salisbury v. Bartleson, ,39 Minn. 366.
 
 §§338,339. MODE OK I'KE.SEXTMKXT. 210 
 
 to his residence."^ While this doctrine is sustained by high 
 authority both in En^-hnid and the United States, and is 
 doubtless correct, there are decisions conlra.^^ 
 
 § 338. When payable at either of several places or banks. — 
 If a bill of exchange be drawn payable at either of two 
 places, and is accepted accordingly, as, for example, if drawn 
 payable at Maidstone or London, the holder has his choice 
 to present it at either jilace for payment; and the like rule 
 applies to a note made payable at either of two places. If 
 the bill or note be not duly paid at the place where it is 
 presented, the holder may protest it and give notice to the 
 drawer and indorsers, who will be bound by its presentment 
 and dishonor at the place of his election; although if pre- 
 sented at the other place it would have been duly paid; for 
 in such cases all the parties agree to pay the l)ill or note upon 
 due presentment at either place.^*^ And sometimes the in- 
 strument is made payable at any or either of the banks of a 
 particular place, in all such places the stipulation as to the 
 place of payment is understood to be for the accommodation 
 of the payee or holder, who is given the right to elect the 
 bank at which the note should be presented in order to 
 charge the indorsers; and if, upon presentment at any or 
 either bank in the place named, payment is refused, the in- 
 dorsers, as well as the maker, arc bound. The maker's 
 promise is to pay the note at any of the banks in the place, 
 and the duty is imposed upon him to look at all the banks 
 for it, or provide funds to pav it at all of them when it is 
 due.^^ 
 
 SECTIOX IV. 
 
 MODE OF PRESEXTMEXT. 
 
 § 339. Must be actually exhibited. — Presentment of the 
 bill or note, and demand of payment, should be made by an 
 actual exhibition of the instniment itself; or at least the de- 
 
 24 Smitli V. Philbrick, 10 Gray, 252. 
 
 -■> Daniel on Nefjotiable Instruments, § 640, and cases cited, 
 -tj Daniel on Negotiable Instruments, § 048: Beeching v. Gowcr, 1 
 Holt. .31.3; Story on Bills, § 3.54. 
 
 27 Maiden Bank v. Baldwin, 13 Grav, 1,54.
 
 220 I'KKSEXTMEXT FOR PAYMENT. § 340. 
 
 mand of payment should be accompanied by some clear indi- 
 cation that the instrument is at hand, ready to be delivered, 
 and such must really be the case.^^ This is requisite in order 
 that the drawee or acceptor may be able to judge (1) of the 
 genuineness of the instrument; (2) of the right of the holder 
 to receive payment; and (3) that he may immediately re- 
 claim possession of it upon paying the amount. If, on de- 
 mand of payment, the exhibition of the paper is not asked 
 for, and the party to whom demand is made declines to pay 
 on other grounds, a more formal presentment by actual 
 exhibition of the paper wnll be considered as waived.^^ 
 Where the note was in bank, a few rods from the maker's 
 house, and the maker was informed by note from the cashier 
 that it was there and requested payment, it was held suffi- 
 cient;^*' and it was likewise so held, where the statement in 
 the protest was that the notary went, with the draft, to the 
 bank and demanded payment.^^ So, if the maker calls on 
 the holder on the day of payment, at his place of business, 
 declares his inability to pay it, and requests him to give 
 notice to the indorser, it is sufficient to charge the indorser, 
 as an exhibition of the paper would have been useless.^^ 
 But it is better in all cases to make an actual exhibition of 
 the paper, in order to avoid all question. It seems that de- 
 livery of written demand to a servant at the house of the 
 promisor is insufficient.^^ The demand of payment should 
 not vary from the tenor of the paper; and if it be payable 
 simply in money, without specifying the kind, a demand for 
 gold coin would be insufficient to charge an indorser.^* 
 
 § 340. Presentment by mail. — Bills of exchange are most 
 frequently drawn on parties at distant places, and it is un- 
 
 28Musson V. Lake, 4 How. 262; Nailor v. Bowie, 3 Md. 251; 
 Crandall v. Schroeppel, 1 Hun, .557 ; Etheridge v. Ladd, 44 Barb. 60. 
 29 Tx)ekwood v. Crawford, 18 Conn. .361 ; King v. Crowell, 61 Me. 244. 
 SOTredick v. Wendell, 1 N. H. 80. 
 
 31 Bank of Vergennes v. Cameron, 7 Barb. 143. 
 
 32 Gilbert v. Dennis, 3 Mete. (Mass.) 495. 
 
 33 Duke of Norfolk v. Howard, 2 Show. 235. 
 
 34 Langenberger v. Kroeger, 48 Cal. 147.
 
 § 341. MODK OF PUKSEXT-MEXT. 221 
 
 <loiiLtedly logal, customary, and proper to forwanl llioiu \)y 
 mail to correspondents or other agents at the place where the 
 drawee is addressed, to be by them presented, in due course. 
 And in such cases if by accident or default in the postal 
 service they are not received in due time to be presented 
 at maturity, the delay occasioned is excused, and the drawer 
 iind indorsers are held liable, provided that, when the delay 
 is over, due diligence is exercised in making the present- 
 ment afterward.^" It has been said that presentment 
 through the post-office may be sufficient.^*^ But such method 
 of presentment of bills seems to be unknown to the law mer- 
 chant, and it might prove a hazardous and fatal experiment 
 to those who relied upon it. Jt has been held that checks 
 may be so presented,^' but the reasons for the permissibility 
 of such mode of presentment do not seem to apply to bills 
 drawn on others than ])ankers, and Prof. Parsons has well 
 observed : " It is not easy to see how a sufficient demand 
 can be made with safety through the post-office." ^* 
 
 Presentment through the mail by a bank acting as collect- 
 ing agent, has been held not sufficient to exonerate it from 
 liability in case of loss resulting from the failure of the 
 drawee, Avho had remitted exchange on Xew York in pay- 
 ment, instead of cash.^^ 
 
 § 341. Leaving- instrument in debtor's hands. — A bill or 
 note, when presented for payment, cannot be left in the 
 debtor's hands as when presented for acceptance; and if it 
 is so left, presentment cannot be considered as made until 
 payment is demanded. And if, in the meantime, the debtor 
 has stopped payment, the holder would suffer to the extent 
 of the difference between the value of the instnmient at 
 
 35 Daniel on Negotiable Instruments, §§ 1068-1070; Pier v. Heinrick- 
 Shoffen, 67 Mo. 163. 
 
 316 Benjamin's Chalmers' Digest, 161. 
 
 87 Daniel on Negotiable Instruments, § 1599. 
 
 38 1 Parsons on Notes and Bills, 371; McGruder v. Bank of Washing- 
 ton, 9 Wheat. 598; Story on Bills, § 325. 
 
 39 Harvey v. Girard Nat. Bank, 119 Pa. St. 212; Drovers' Nat. Bank 
 V. Provision Co., 117 111. 108.
 
 222 PRESENTMEXT FOR PAYM .XT. § 342. 
 
 the time it Avas liaiuled the debtor and the time payment was 
 actually dcmandod.^*^' 
 
 § 342. As to mode of presentment of negotiable paper pay- 
 able at a bank. — When a bill or note is made payable at a 
 bank, it is considered a sufficient presentment of it if it is 
 actually in the bank at maturity, ready to be delivered up to 
 any party who may be entitled to it on payment of the 
 amount due; and if, at the close of business hours, the bill or 
 note remains unpaid, it is considered as dishonored, and no- 
 tice should be inmiediately given to the proper parties."^ 
 Such also is the case when the instrument is payable at a par- 
 ticular place.''" Sometimes a formal presentment of the 
 bill or note, in such cases, at the bank, or upon the maker, 
 is made; and the cases are nnifonn in holding that such a 
 presentment at the bank is sufficient, even when the place 
 is mentioned in the memorandum ;^^ but it is settled that 
 nothing more than the presence of 'the paper there is nec- 
 
 essary ^"^ 
 
 But it has been held by the United States Supreme Court, 
 that though commercial paper be physically in the bank at 
 which it is payable, yet if the bank is ignorant of this by 
 reason of the fact that the letter in which it was sent slipped 
 through a crack in the cashier's desk and disappeared before 
 it had been seen by him, then there would be no present- 
 ment, though the acceptor had no funds there, and did not 
 mean to pay the bill. And such a disappearance carried 
 with it a presumption of negligence in the collecting bank, 
 and threw upon it the burden of proof to rebut it; and that 
 
 40Hayward v. Bank of England, 1 Stra. .550; Tliompson on Bills 
 (Wilson's ed.), 304. 
 
 41Chicopee Bank v. Philadelphia Bank, 8 Wall. 641; People's Bank 
 V. Brooks, 31 Md. 7; Folger v. Chase, 18 Pick. 03. 
 
 42 Hunt V. Maybee, 7 X. Y. 2GG. 
 
 4:iBank of Utica v. Smith, 18 Johns. 230; Woodbridge v. Brigham, 
 
 13 Mass. 550; Saunderson v. .Judge, 2 H. Bl. 500. 
 
 44 Fullerton v. Bank of United States, 1 Pet. G04 ; Merchants' Bank 
 V. Elderkin, 25 N. Y. 178.
 
 §§343,344. Moui: <)!• i'i;i>i:.\TMi:xT. 223 
 
 in the absence of such j)r()<>f the hank wouM 1)C responsible 
 to the hokler for the amount <.l' the bill or note."*^ 
 
 § 343. Customary demand by notice through the mails. — In 
 some of the States it has become customary for banks of a 
 particular ])lace, which are the holders of negotiable paper, 
 to issue a notice to the promisor a few days before maturity, 
 informing him that the paper is in bank, setting forth the 
 date wdien it will become payable, and requesting him to 
 come there and pay it. Such notice constitutes a conven- 
 tional demand, and a neglect to comply with it is such a 
 refusal as amounts to dishonor of the paper. The custom 
 prevails Avhere the paper is payable at the bank giving the 
 notice,^*^ and has been sustained by judicial decision, as well 
 where it is not made so payable, but is placed there for col- 
 lection."*^ In Massachusetts this custom has become so gen- 
 eral and universal that every one w^ho incurs the liability 
 of maker and indorser is presumed to have contracted in 
 reference to it, and knowledge on his part may be pre- 
 sumed.'*'^ Tn respect to the maker of a note or the acceptor 
 of a bill in tennis payable at a particular place, this custom 
 to inform him that his paper is there, and that he is re- 
 quested to meet it, amounts to nothing more than a reminder 
 from creditor to debtor, which in law is a supei-fluous act so 
 far as he is concerned. But in respect to the drawer or 
 indorser, the holder's contract, when the instrument is pay- 
 able generally is that he will ]-)resent the instrument to 
 the acceptor or maker; and the theory upon which the duty 
 in this regard is considered relaxed by custom is that the 
 party secondarily liable has, in effect, waived the formal 
 presentment otherwise required by law, and consented to 
 the substitution of notice through the mails.'*^ 
 
 § 344. Knowledge of conventional method of demand. — 
 Knowledge by the drawer or indorser of the custom has 
 
 45 Chicopee Bank v. Philadelphia Bank, 8 Wall. 641. 
 
 46 Camden v. Doremus, 3 How. ol.'); Lincoln & Kennebec Bank v. 
 Pape, 9 Mass. 15.5. 
 
 47 Jones V. Fales. 4 Mass. 245 ; Whitewell v. .Johnson, 17 Mass. 449. 
 
 48 Grand Bank v. Blanchard, 23 Pick. 505. 
 48 Daniel on Negotiable Instruments, § 660.
 
 224: PRESENTME^-T TOU PAYMENT. § 344:. 
 
 been regarded as essential to its establishment as against 
 him in some cases.^ But the United States Supreme Court 
 say that parties are bound by an established usage of a 
 bank at which the paper is payable "whether they have a 
 personal knowledge of it or not;" ^^ and as the custom must 
 be general, in order to obtain recognition as such, we cannot 
 perceive that knowledge of it enters into the question any 
 more than knowledge of any other rule of law. A custom 
 is not a special personal contract, but a general and con- 
 trolling rule. " The parties are presumed by implication 
 to be governed by the usage of the bank at which they have 
 chosen to make the security itself negotiable." ^^ 
 
 soLeavitt v. Simes, 3 N. H. 14. 
 
 51 Mills V. Bank of United States, 11 Wheat. 431. 
 
 52 Mills V. Bank of United States, 11 Wheat. 431,
 
 CHAPTER XII. 
 
 PROTEST AND NOTICE OF DISHONOR. 
 
 SECTION I. 
 
 PROTEST. 
 
 § 345. Meaning: of term. — The term includes, in a popular 
 sense, all the steps taken to tix the liability of a drawer or 
 indorser, upon the dishonor of connnercial paper to which 
 he is a party. More accurately speaking, it is the solemn 
 declaration on the part of the holder against any loss to be 
 sustained by him by reason of the nonacceptance, or even 
 nonpa^nnent, as the case may be, of the bill in question; 
 and a calling of the notary to ^^dtness that due steps have 
 been taken to prevent it. The word '' protest " signifies to 
 testify before; and the testimony before the notary that 
 proper steps were taken to fix the drawer's liability is the 
 substance, and the certificate of the notary the fonnal evi- 
 dence, to which the term protest is legally applicable.^ 
 
 ^ 346. Protest for nonacceptance. — According to the Eng- 
 lish law, the protest must bo made in tlie case of dishonor 
 by nonacceptance as well as dishonor by nonpa^nnent." And 
 the same nile prevails in the United States,^ altliough it was 
 decided by the Supreme Court of the United States, in an 
 action on a protest for nonpayment of a foreigii bill, that 
 a protest for, or notice of, nonacceptance, need not be 
 sho\\Ti, inasmuch as they were not required by the custom 
 of merchants in tliis country.'* But the English ndc has 
 been deemed the most consistent ^dth commercial policy by 
 the highest authorities, and Storj^ and Kent adopt it as the 
 true one.'* 
 
 1 Daniel on Negotiable Instruments, § 929. 
 
 2 Gale V. Walsh. ,5 T. R. 239; Benjamin's Chalmers' Difjest, 17G. 
 
 3 Mason v. Franklin, 3 Johns. 202; Watson v. Loring, 3 Mass. r>57; 
 Phillips V. :McCurdy, 1 Harr. & J. 1S7; Story on Bills, § 273. 
 
 •taarke v. Russell, 3 Ball. 29.5; Brown v. Barry, 3 Dall. 305. 
 •''•Kent Comm. 95: Story on Bills, § 273. 
 
 15
 
 22G PllOTEST AND NOTICE OF DISHONOR. § 347. 
 
 •§ 347. What instruments must or may be protested. — When 
 a foreign bill of exchange is presented for acceptance or 
 payment, and acceptance or payment is refused, the holder 
 must take what is called a protest, in order to charge the 
 drawer or any indorser. According to the law of most 
 foreign nations, a protest is essential in the case of the dis- 
 honor of any bill;*' but by the custom of merchants in Eng- 
 land," and wherever the law merchant prevails in the United 
 States, the protest is only necessary in the case of foreign 
 bills;** though by statute in most of the States inland bills 
 and promissory notes may be protested in like manner. So 
 indispensable is the protest of a foreign bill in case of its 
 dishonor, that no other evidence will supply the place of it, 
 and no part of the facts requisite to the protest can be 
 proved by extraneous testimony, and it has been said, that 
 it is a part of the constituti»n of a foreign bill.^ But, 
 while the practice is usually followed to protest inland bills 
 and notes, under the permissive statutes, it is not a practice 
 which makes it incumbent to protest them; and the holder 
 may waive the privilege if he choose to do so, and produce 
 other evidence of dishonor.^'^ Such was the convenience 
 of evidence in this form, obviating the necessity of the at- 
 tendance of witnesses, and preserving their testimony where 
 other^\^se it might l)e lost by death or removal, that it be- 
 came common to protest inland bills, and promissory notes 
 as well; and the holder was often disappointed in finding 
 that such protest was not evidence of dishonor.^^ This led 
 to a ver}^ general enactment of statutes authorizing pro- 
 tests in such cases; and giving them the like effect as in 
 cases of foreign bills. 
 
 Following the reasons underlying the necessity and wis- 
 dom of the rule requiring protest of foreign bills of ex- 
 
 6 Thompson on Bills (Wilson's ed.), 307. 
 
 7 0rr V. :\Ia;^innis, 7 East, 351); Gale v. Walsh, 5 T. R. 239. 
 
 8 Burke v. McKay, 2 How. 66; Younj^ v. Bryan, 6 Wheat. 146; Ocean 
 Nat. Bank v. Williams, 102 Mass. 141. 
 
 9 Union Bank v. Hyde, 6 Wheat. 572; Borough v. Perkins, 1 Salk. 121. 
 
 10 Bailey v. Dozicr, 6 IIoav. 23; Wanger v. Tapper, 8 How. 234. 
 
 11 2 Rob. Pr. 121.
 
 § 348. PROTEST. -J-Il 
 
 change, some authorities say tliat foreign promissory notes, 
 — /. e., notes executed in one State or conntiy and payable 
 in anotlicr — must he ])rotested;^^ but there are cases in 
 which tlic o^jpositc view has been taken. '^ 
 
 § 348. By whom the protest should be made, and how au- 
 thenticated. — As to the person by whoni llie protest should 
 be made, it is necessary, as a general rule, that it should 
 bo made by a notary public in person, and by the same no- 
 tary who presented and noted the bill.^* The notary is a 
 ])ublic ofheer, commissioned by the State, and possessing an 
 official seal, and full faith and credit are given to his official 
 acts, in foreign countries as. well as his owti.^" But when 
 no notary can be conveniently found, the protest may be 
 made by any respectable private individual residing in the 
 place where the bill is dishonored.^^ In England, by stat- 
 ute,^" the protest of inland bills by a private person must 
 be authenticated by the sigiiature of the individual making 
 the ])rotest in the presence of two or more credible wit- 
 nesses, but it does not appear to be necessary that there 
 should be witnesses to the protest of a foreign \)\\\ by a pri- 
 vate person. ^^ If, howcvor, the proTcst is made by a notary, 
 the official seal of the notary attached to the certificate of 
 protest is everywhere received as a sufficient prima facie 
 proof of its authenticity. The courts take judicial notice 
 of the seal, and it proves itself by its appearance upon the 
 certificate. But it may be controverted as false, fictitious, or 
 improperly annexed. ^^ But if the protest is made by a 
 
 l2\Villiam>; V. Pulnain, 14 N. H. 540; Ticonic Bank v. Stackpole, 41 
 :Me. -MVl; Kdwards on Bills. 584. 
 l.{ Kirtland v. Wanzer. 2 Ducr. 278. 
 
 14 Ocean Nat. Bank v. \\illianis. 102 Mass. 141; Saoril)or v. Brown, 
 3 :MpLoan, 481; Commercial Bank v. Varnum. 49 X. Y. 269; Commer- 
 cial Bank v. Barksdalo. .30 Mo. 50.3. 
 
 15 l^aniel on Negotiable Instruments. §§ 579, 587. 
 
 16 Burke v. :\IcKay, 2 How. (iO; Read v. Bank of Kentucky. I T. B. 
 Men. 91. 
 
 17 9 & 10 Will. 111. chap. 17. 
 
 18 Brooks Notary. lO:?; Chitty on Bills r*:«.3]. 374, note u. 
 
 19 Pierce v. Indseth. lOG U. S. 549: Nichols v. Webb. S Wheat. 320; 
 Bradley v. Northern Bank, 00 Ala. 258.
 
 228 PROTEST AND NOTICE OF DISHONOR. §§ 349, 350. 
 
 notary, and the certificate is not authenticated by the no- 
 tary's seal, or if it is made by a private person, it does not 
 prove itself, and there mnst be extraneous evidence to show 
 that it was duly made by the person officiating.-'^ In some 
 cases it has been held that a notary's certificate of protest 
 is sufficient M-ithout a seal, the law giving full effect to his 
 protestations and attestations.^^ 
 
 g 349. Place of protest. — It is usually made at the place 
 where the dishonor occurs.^ If the protest be for nonac- 
 ceptance, the place of protest should be the place where 
 the bill is presented for acceptance, and a like rule obtains 
 if the protest be for nonpayment ;^^ but when the bill is 
 drawn upon the drawee in one place, and by its terms 
 made payable in another, there is eminent authority for 
 the statement that the protest for nonacceptancc may be 
 made at either place. ^'^ 
 
 g 350. The presentment and demand of payment ; notary 
 must have personal knowledge of. — The first step taken is 
 the presentment of the instrument to the drawee, or accep- 
 tor, or maker, by the notary, and a demand of payment. 
 By the law merchant, it is absolutely necessary that the no- 
 tary himself should make this formal presentment and 
 demand. And, although the holder may have already pre- 
 sented the bill and demanded acceptance or payment, and 
 been refused, it is still necessary that the presentment and 
 demand, which are to be made the basis of the notary's cer- 
 tificate, should be made by him in person. For otherwise 
 his testimony contained in the protest would be hearsay and 
 secondary, and would lack the very element of certainty 
 which the protest is especially designed to assure. Xot even 
 his clerk, nor, unless authorized 1)y law, his deputy, can 
 
 20 Carter v. T.urley, 9 X. II. 558; Clianoine v. Fowler, .3 Wend. 173. 
 
 21 Bank of Kentueky v. Pursley, 3 T. B. Mon. 240; Iluffaker v. Na- 
 tional Bank, 12 Bush, 293. 
 
 22 Benjamin's Chalmers' Digest, 175; 2 Ames on Bills and Xole«, 450; 
 Edwards on Bills, 580. 
 23 Story on Bills, § 282. 
 24Chitty on Bills [*334], 374.
 
 § 351. I'KOTEST. 220 
 
 perform these fuuctions for the notary, as it is to his official 
 character that the law imputes the solemnity and sanction 
 which arc accorded his certificate.^ 
 
 § 351. Time within which certificate of protest must be pre- 
 pared; skeleton protest — As a general rule, it may be stated 
 that the certificate of protest must be prepared and com- 
 pleted on the day of the fonnal ])resentment and dishonor 
 of the instrument; but the necessity for this may be obvi- 
 ated by noting the dishonor of the instrument on the day 
 of its maturity and after fonnal presentment. By " noting 
 the dishonor " is meant the making by the notary of a 
 minute on the bill, on a ticket attached thereto, or in his 
 l)0()k of registry, of the initials of the notary, the 
 month, the day, the year, the refusal of acceptance 
 or payment, together with his notarial charges. This is 
 the preliminary step toward the protest, which may be 
 afterward written out in full — extended, as the elabora- 
 tion of these minutes is termed — at any time before it 
 is actually needed in court. " Xoting," it was said in an 
 early case, '' is unkno^\^l to the law, as distingiushed from 
 the protest; it is merely a preliminary step to the protest, 
 and has gro^\^l into practice ^\'ithin these few years." ^ But 
 it is now quite well established in England, Scotland, and 
 the United States, that the noting is a kind of " initial pro- 
 test," as Thompson aptly terms it, not self-sufficient as a 
 protest, but sufficient in the meantime, if the certificate of 
 protest is regularly extended afterward."' It must be made 
 on the very day of dishonor by nonacceptance or nonpay- 
 ment, otherwise it cannot be made the basis of the extended 
 protest. For the notary will not bo permitted to trust to his 
 memoiy for the requisite particulars. It is to his contem- 
 poraneous written statement that the law gives credit.^^^ 
 
 2.") Daniel on Nejjotiable Instruments, §§ 579, 587, 938. 
 
 26 Leftly V. Mills. 4 T. R. 170. 
 
 27Chatois V. Boll. 4 Esp. 48; Edwards on Bills, 581: Thompson on 
 Bills, 311. 
 
 28Dennistoun v. Stewart. 17 How. 606; Thompson on Bills, 312; Story 
 on Bills. §§ 278. 283.
 
 230 I'KOTE.ST AND .NOTICE Ol-' DISHOISrOK. §§ 352, 353. 
 
 § 352. What certificate must contain. — The protest, or, 
 more strictly speaking, the notarial certificate thereof, 
 should set forth: (1) The time of presentment; (2) the 
 place of presentment; (3) the fact and manner of present- 
 ment; (4) the demand of payment; (5) the fact of dishonor; 
 (6) the name of the party by whom presentment was made; 
 and (7) the name of the person to whom presentment was 
 made.^^ 
 
 § 353. Time, place, and manner of presentment and demand. 
 — • It is essential that the time of presentment and demand 
 should affirmatively appear upon the face of the certificate, 
 and it has been accordingly held that if the certificate state 
 that the l)ill was '' this day protested," and is dated on a 
 day previous to or after the day of maturity, it is invalid 
 upon its face;"*^" and while the certificate should state that 
 the presentment and demand were made during the usual 
 business hours, it is not absolutely essential, because it will 
 be presumed that the presentment was made at the proper 
 time of the day.^^ 
 
 If the instrument, In" its terms, is payable at a specified 
 place, the certificate is insufiicient unless it state that pre- 
 sentment and demand were made at such place ;^^ but if no 
 place of payment is named the certificate need not state at 
 what place it was presented. 
 
 The presentment of the bill and the demand of payment 
 should be separately stated. The usual expression of the 
 certificate is, that the notary " did exhibit said bill," and it 
 is certain that there must be some expression importing 
 ex vi termini that the bill was presented to the drawee or 
 acceptor."'^ The mere statement that payment was " de- 
 manded " has been held by the United States Supreme Court 
 to bo insufficient in itself, because not necessarily implying 
 
 s^'Danifl on Negotiable Instruments, § 9.50. 
 30 Walmsley v. Acton, 44 Barb. 31 2. 
 
 siBurbank v. Beacli. 1.5 Barb. 326: Skelton v. Dunstan, 1)2 111. 49. 
 .32 People's Bank v. Brooks, 31 Md. 7. 
 
 3.3 Union Bank v. Fowlkes, 2 Sneed, 5.55; Bank of Verpennes v. Cam- 
 eron, 7 Barb. 143.
 
 §§ 354, :355. PKOTEST. 231 
 
 a " prescnimc'iu al.-o." '" Hut thiTc can be no legal demaud 
 without presentment, and the term •' demanded" has been 
 considered sufficient in Louisiana.^^ The mere statement of 
 " presentment " is not in itself sufficient without also a state- 
 ment of demand,^" 
 
 § 354. Name of person to whom presented and fact of dis- 
 honor must be stated. — The name of the person upon whom 
 demand was made should be stated, especially when it was 
 not made at the place of business of the drawer or acceptor. 
 In the latter case, it is sufficient to describe the ])erson as a 
 clerk or person in charge. •*' If a tinn were the drawer or 
 acceptor, it would be fatally defective in not statin<i' the 
 uamc of the person on whoui demand was made, as well as 
 that he was a member of the finn.^* 
 
 If the bill is payable at a bank, nothing- more need be 
 stated than that the notary presented it and demanded ])ay- 
 ment at the bank, and that it was refused, A\'ithout statino- 
 the name of the person or officer of tlie bank to whom it was 
 presented. ^^ 
 
 The dishonor of the bill must be stated, and it is usually 
 expressed in the phrase that the person to whom it was pre- 
 sented " answered that it would not be accepted or paid," 
 or that such person " refused to accept or pay it," or some 
 such language. If it does not, in some terms, inform the 
 party of the dishonor, it is fatally defective. But it is not 
 material what words are used."*^ 
 
 § 355. Protest as evidence. — The original instrument of 
 protest, or a duly authenticated copy, is respected by the 
 
 :i4 Musson v. Lake, 4 How. 262; Knickerbocker Life Ins. Co. \-. Pen- 
 dleton, 115 U. S. 347. 
 
 30 Xott V. Beard, 16 La. 308. 
 
 ■■sfiNave v. Richardson. 36 Mo. 130; Farmers" Bank v. Allen. 18 Md. 
 475. 
 
 37Xelson V. Fotterall, 7 Leigh, 179; Stainback v. Bank of Virginia, 11 
 Gratt. 260. 
 
 3SOtse^'o County Bank v. Warren. 18 Barb. 290. 
 
 39 Ilildebiun v. Turner, How. 69. 
 
 40 Taylor v. Bank of Illinois, 7 T. B. Mon. 576; Arnold v. Kinlock, 50 
 Barb. 44 : Littledale v. Maberry, 43 Me. 264.
 
 232 PROTEST AND NOTICE OF DISHONOR. § 35G. 
 
 courts of a foreign country, and whenever admissible in 
 testimony is regarded as prima facie evidence of all the 
 facts therein stated, so far as they come within the scope 
 of the notaiy's duty in making the presentment and demand 
 and protest."*^ But it is prima facie evidence only, and 
 any statement made in the protest may be rebutted by any 
 competent testiinony to the contrary/" But as, by the law 
 merchant, the protest is only necessar}% or receivable as evi- 
 dence of dishonor, in the case of foreign bills or of indorsed 
 notes, which ai-e of the nature of foreign bills and come 
 within the reason of the law respecting them, the protest 
 of an inland bill or of an inland promissory note is not evi- 
 dence of dishonor in a foreign State, although it may be 
 in the State where the dishonor occurred by statute.^^ And 
 where a State statute makes the protest, Avhen executed by 
 a notary of that State, evidence as to demand and notice, it 
 does not authorize the notary to act beyond its territorial 
 limits, or accord the same effect to his act when beyond 
 them."*^ 
 
 § 356. Evidence only of facts that are and should be stated. 
 — • The admission of the certificate of protest as evidence 
 only makes it evidence of such facts as it should and does 
 distinctly state. ^^ The purpose of the certificate, as it has 
 been seen, is to enable th© plaintiff, by this species of docu- 
 mentary evidence, to prove all of the essential requirements 
 of a formal and legal presentment of the instrument for ac- 
 ceptance or payment, and that due demand was made and 
 that the bill or note was in fact dishonored. It follows, 
 therefore, that the certificate of protest can be taken as evi- 
 dence only as to the essentials stated, and hence the cer- 
 tificate is not evidence of any collateral facts which may 
 
 41Townsley v. Simiprall, 2 Pet. 170; Chase v. Taylor, 4 Harr. & J. 54; 
 Insurance Co. v. Wilson, 29 W. Va. 547. 
 
 42Difkpns V. Real, 10 Pet. 582; Howard Bank v. Carson, 50 Md. 27; 
 Apploffarth v. Abbott. 04 Cal. 450. 
 
 43 TJutchess County Bank v. Ibbottson, 5 Den. 110; Kirtland v. 
 Wanzer, 2 Ducr, 278. 
 
 44 Dutchess County Bank v. Ibbottson, 5 Den. 110. 
 
 45 Daniel on XegotiaViIc Instruments, § 062.
 
 § 357. PROTEST. 233 
 
 be stated in it. Tims, if it state that the reason given by 
 the drawee for nonaceeptance was, tiiat lie had no effects 
 or funds of the drawer, it is no evidence of the want of 
 effects or funds.'*" Nor is it evidence that the drawee ex- 
 pressed his willingness to pay in certain bank bills ;"*' nor of 
 the manner and service of the notice of dishonor, unless 
 by statute such evidence is made admissible.'*'* 
 
 § 357. Presumptions in favor of protest ; evidence to supply 
 omissions. — Hut legal presumptions are made in favor of the 
 protest under pro])er circumstances. Thus, when the cer- 
 tilicate of protest states that demand was made of the clerk 
 of the drawee, found at his otiice or place of business, the 
 drawee himself being absent, it is evidence not only of the 
 fact of demand, but also that the person named was the 
 drawee's clerk, duly authorized to refuse acceptance or pay- 
 ment. ^^ And it would be presumed, if not stated, that the 
 drawee was absent.^*^ So (where it is evidence as to no- 
 tice), if it state that notice was left " at the indorser's desk 
 in the custom house, he being absent, Avith a person in 
 charge," it is prhna facie evidence that sucli was his place 
 of business, and that it was properly left there, it not ap- 
 pearing that better service could have been made.^^ So, 
 if it states demand at his office or place of business, of his 
 bookkeeper, or agent, or clerk,^" it is evidence that such 
 person was the drawee's agent. 
 
 When the protest has been made at the proper time and 
 place, and in the proper manner, but does not upon its face 
 make all the statements necessary to prove due demand and 
 notice, parol evidence is admissible to supply the omission, 
 
 46Dakin v. Graves, 48 N. H. 45; Dumont v. Tope, 7 Blackf. 3G7. 
 4" Maccoun v. Atchafalaya Bank, 13 La. .342. 
 
 4S Walker v. Turner. 2 Gratt. 536; Bank of Vergennes v. Cameron, 
 7 Barb. 144. 
 
 49 Nelson v. Fotterall, 7 Leigh, 170; Stainback v. Bank of Virginia, 11 
 Gratt. 2G0. 
 
 50 Gardner v. Bank of Tennessee, 1 Swan. 420. 
 
 51 Bank of Commonwealth v. ^ludgett, 44 X. Y. 514. 
 
 52 Phillips V. Poindexter. 18 Ala. 570; Diekerson v. Turner, 12 Ir.d. 
 223; Bradley v. Northern Bank. IC Ala. 259.
 
 234 i'KOTEST AND .NOTICE OF DlJiliO^OK. g§ 358, 359. 
 
 provided it be in furtherance of, aud uot inconsistent with 
 or contrary to, the statements that are made in the protest. 
 Thus, where the protest stated a demand of the cashier, but 
 omitted to state that the note was in, or the cashier at the 
 bank, it was held admissible to prove these facts by parol 
 testimony.^^ 
 
 SECTION^ n. 
 
 NOTICE OF DISHONOR. 
 
 § 358. Necessity of notice ; general rule. — When a negoti- 
 able bill or note is dishonored by nonacceptance on present- 
 ment for acceptance, or by nonpayment at its maturity, it 
 is the duty of the holder to give immediate notice of such 
 dishonor to the drawer, if it be a bill, and to the indorser, 
 whether it be a bill or note. The party primarily liable is 
 not entitled to notice, for it was his duty to have provided 
 for payment of the paper; and the fact that he is maker 
 or acceptor for accommodation does not change the rule.^* 
 
 Xoticc is not due to any party to a bill or note not nego- 
 tiable, the rules of the law merchant conceniing notice and 
 protest applying to none but strictly commercial instru- 
 ments.^^ 
 
 It is regarded as entering as a condition in the contract 
 of the drawer and indorser of a bill, and of the indorser of 
 a note, that he shall only be bound in the event that accept- 
 ance or payment is only demanded; and he notified if it is 
 not made. And in default of notice of nonacceptance or 
 nonpayment, the party entitled to notice is at once dis- 
 cliara:ed, unless some excuse exist which exonerates the 
 holder.^*^ 
 
 ^ 359. Failure to notify party entitled to notice discharges 
 debt for which bill was drawn or indorsed. — So absolute is 
 the necessity for notice to an indorser, in order to charge 
 
 r.:: Mafroiin v. Wiilkor, 49 Me. 420; Seneca County Bank v. Neass, 5 
 Den. 329. 
 
 54 Hays V. N. W. Bank, 9 Gratt. 127. 
 
 55 Pitman v. Breckenridge, 3 Gratt. 129. 
 
 56 Rothschild v. Currie, 41 Eng. C. L. 43; Miisson v. Lake, 4 How. 262.
 
 g 3G0. ^•oTICE OF i)i.siio>,'oK. 235 
 
 hini, that if a note has been indorsed to the holder in con- 
 ditional payment of a debt, the failure to give notice to 
 the indorser will mit only discharge the indorser as a party 
 to the note, l>nl ;il~<i ;i debtor upon the original considera- 
 ticni, even though it be secured by a mortgage or deed of 
 trust. The note, then, is made an absolute discharge of his 
 liability, and the indorsee must look solely to prior parties.'"'' 
 And so in res])cct to the drawer of a bill given in conditional 
 payment. ^^ The neglect to give notice to the drawer of a 
 renewed bill not only discharges him from liability to pay 
 that bill, but discharges him from liability to pay the prior 
 bill, to satisfv whicdi it was drawn r'"''"^ and this although it be 
 expressly agreed that the taking of such second bill shall not 
 exonerate any of the parties to the first bill until actual 
 payment.^ 
 
 § 360. Notice may be verbal or written. — The notice need 
 not be in writing; it is sufficient if it be given verbally;"^ but 
 for precision and safety written notice is preferable. Verbal 
 notice must be necessarily confined to those cases in which 
 notice is directly given to the party in person, or is sent by 
 a messenger to his place of business or residence. It seems 
 that a verbal notice is less strictly constmed than a written 
 one, especially when its sufficiency is impliedly admitted by 
 the party's response.-" Thus, where the holder's clerk told 
 the drawer that the bill had been duly presented, and that 
 the acceptor could not pay it, and the drawer replied that 
 he would see the holder about it, this was held to be suffi- 
 cient evidence to Avarrant the jury in finding that the fact 
 of the dishonor of the note was sufficiently communicated 
 to the drawer. ^^ 
 
 57Shipman v. Cook, 1 Green, 2.51; Peacock v. Purcell, 14 C. B. (N. S.) 
 728. 
 
 58 Bridges v. Berry. 3 Taunt. 1.30; Allan v. Eldred, 50 Wis. l.lfi; Smith 
 V. Miller, 43 X. Y. 171. 
 
 59 Bridges V. Berry, 3 Taunt. 130; Chitty on Bills [*433, 444], 488, 500. 
 eoReid V. Coats, Bro. P. C. ; Chitty on Bills [*434], 488. 
 
 61 Boyd's Admr. v. City Sav. Bank, 15 Gratt. .501 -. First Nat. Bank v. 
 Ryerson, 23 Iowa, 508; Stanley v. ilcElrath, 25 Pac. 16. 
 
 02 Phillips V. Gould, 8 C. & P. 355: Byles on Bills [*264], 211, 212. 
 63 Metcalfe V. Richardson, 11 C. B. 1011.
 
 236 PROTEST AND NOTICE OF DISHONOK. §§ 361, 362. 
 
 ^eve knowledge of Jislionor does not constitute notice.''^ 
 jSTotice signities more; but Avhen the fact of dishonor is com- 
 municated bv one entitled to call for payment, it becomes 
 notice, as it is then to be inferred that the intention is to 
 hold the party notified responsible.^^ 
 
 § 361. Form of notice. — ]W) ])articular phrase or fonn is 
 necessary. The object of it is to inform the party to whom 
 it is sent: 1, that the bill or note has been presented; 2, 
 that it has been dishonored by nonacceptance, or nonpay- 
 ment; and, 3, that the holder considers him liable, and looks 
 to him for payment. And in framing the notice, all that 
 is necessary to apprise the party of the dishonor of the in- 
 strument is, to intimate that he is expected to pay it. 
 
 In order that a notice should answer these conditions, and 
 duly intimate dishonor to the drawer or indorser, it should 
 therefore, either expressly or by just and natural implica- 
 tion, comprise the following elements: (1) A sufficient de- 
 scription of the bill or note to ascertain its identity. (2) 
 That it has been duly presented for acceptance or payment 
 to the drawee, acceptor, or maker. (3) That it has been 
 dishonored by nonacceptance or nonpayment. (4) That the 
 holder looks to the party notified for payment.*'^ 
 
 § 362. Description of the bill or note dishonored — The no- 
 tice should describe the bill or note in unmistakable terms; 
 should state where the note is, that the party notified may 
 find it; should state who the holder is, and who gives the 
 notice, or at whose request it is given. Such, at least in 
 theory, are the requisites of a proper notice; and a good 
 business man should never neglect to comply with them. 
 But the courts are not strict in requiring this thorough de- 
 scription of the dishonored instrument; and the require- 
 ments of the law are considered as satisfied by any desciip- 
 
 64 Juniata Bank v. Hale, 16 Serg. & R. 157; Bank of Old Dominion v. 
 McVeigh, 29 Gratt. 559. 
 
 65Caunt V. Thompson. 7 T. B. 400; Miers v. Brown, 11 M. & W. .372. 
 
 <5GBank of Old Dominion v. McVeigh, 29 Gratt. 558; Thompson v. "Wil- 
 liams, 14 Cal. 162; Story on Notes, § 348; Daniel on Negotiable In- 
 struments, § 973.
 
 g ;](j^J. NOTICE OI DISiiO.NUK. 237 
 
 tion which, under all iho circumstances of the case, so Jes- 
 iiiiiates the bill or note as to leave no doubt in the mind of 
 the party, as a reasonable man, what l)ill or note was in- 
 tended.*'^ Story says that " the description of the note 
 should be sufficiently definite to enable the indorser to 
 know to what one in particular the notice applies; for an in- 
 dorser may have indorsed many notes of very different dates, 
 sums, and times of payment, and payable to different per- 
 sons, so that ho may be ig-norant* unless the description in 
 the note is special, to which it properly applies or which it 
 designates." ^* But no misdescription of the amount, or 
 of the date, or of the names of the parties, or of the time 
 the paper fell duo, or other defect w-ill vitiate the notice, 
 unless it misleads the party to whom sout.*'^ 
 
 § 363. Statement as to presentment and dishonor. — It was 
 hold at one time that the presentment and dishonor of the 
 hill or note must appear on the face of the notice "in ex- 
 ]»ress terms or by necessary implication; " but the later and 
 better ruling is that it i^ sufficient if this appear by " rea- 
 sonable intendment." '^ Though, ])r()perly understood, the 
 sense of the two phrases is pretty much the same, for " nec- 
 essary implication means not natural necessity, but so strong 
 a ])robability that an intention contrary to that which is 
 imputed cannot be supposed." '^'^ But it is quite clear that it 
 will not be sufficient merely to state in the notice the fact 
 of nonpayment of the bill or note, without stating that pay- 
 ment w\as demanded of the maker, drawee, or acceptor, as 
 the case may be, or stating some legal excuse for not mak- 
 ing such demand. Tt should state whether or not the paper 
 
 67 Gilbert v. Dennis, .3 Mete. (Mass.) 49."): Shelton v. Braithwaite, 7 
 >r. & W. 4.30: Clicksman v. Early. 47 X. W. 272. 
 
 08 Story on Notes, § 34fl. 
 
 69 Bank of Alexandria v. Swan, 9 Tet. 33,; Mills v. Bank of United 
 States, 11 Wheat. 431: Dennistoim v. Stewart, 17 How. 600; Smith v. 
 
 ^^^1itin£r, 12 :\rass. 6. 
 
 ToHodjjer v. Steavenson, 2 "M. & W. 709: Lewis v. Gompertz. :M & 
 W. 402 : Edwards on Bills, 595. 
 
 71 Wilkinson v. Adams. 1 Ves. & B. 400; Hedijer v. Steavenson. 2 
 M. & W. 799.
 
 238 PROTEST AND AOTICE OF DISHOXOK. §§ 364, 365 
 
 has been presented for payment; and if not, why not, for 
 the reason that the indorser has a right to be informed of 
 the facts on which the liability depends, to the end that 
 he may judge for himself whether or not it is his duty to 
 pay it/" 
 
 S 364. Statement that holder looks to drawer or indorser 
 for payment; meaning of. — An express statement in the no- 
 tice to this effect was, as it might seem, fonnerly held nec- 
 essary;" but the prevailing rnle at the present time is, that 
 the -mere fact of giving notice to the party implies that he 
 is looked to for payment.^* 
 
 On this subject it has been said by the United States Su- 
 preme Court: "A suggestion has been made at the bar, that 
 a letter to the indorser, stating the demand and dishonor 
 of the note, is not sufficient, unless the party sending it also 
 infoi-ms the indorser that he is looked to for payment. But 
 when such notice is sent bv the holder, or bv his order, it 
 necessarily implies such responsibility over. For what other 
 purpose could it be sent ? AVe know of no rule that requires 
 any formal declaration to be made to this effect. It is suffi- 
 cient, if it may be reasonably inferred from the nature of 
 the notice." "^ 
 
 § 365. By whom notice given. — The notice of dishonor 
 should emanate from the holder of the instrument at the 
 time of its dishonor, and should be communicated to all the 
 parties whom ho means to hold liable for its payment. But 
 it is not absolutely necessary that it should come from him, 
 for the holder is entitled to the benefit of notice given in 
 due time by any party to the instrument who would be 
 liable to him if he, the holder, had himself given him notice 
 of dishonor.'^*' Thus if the holder dulv notifies the sixth in- 
 
 72 Page V. Gilbert, 60 Me. 488; Gilbert v. Dennis, .3 :Mete. (Mass.) 495. 
 73Tinflal v. Brown, 1 T. R. 169; Solarte v. Palmer, 7 Bin?. .').30. 
 74Mier8 v. Brown, 11 :\I. & W. 372; Townsend v. Lorain Bank, 2 Ohio 
 St. 345; Townsend v. Dry Goods Co., 8.5 Mo. .508. 
 
 75 Bank of United States v. Carneal, 2 Pet. .')43. 
 
 76 Chapman v. Keene. 3 Ad. & El. 193: Bank of United States v. God- 
 dard, 5 Mason, 366; Stafford v. Yates, 18 Johns. 327.
 
 I 3G6. NOTICE OF DISHONOR. 239 
 
 dorser, and lie the fifth, and he the fourth, and so on to 
 the tirst, the hitter will he liable to ail the parties." Where 
 the holder has duly notified, or exercised due diligence to 
 notify the several and successive indorsers, and an interme- 
 diate indorser who <lid not himself notify his predecessors, 
 takes up the l)ill or note, there is no doubt that the notice 
 sent them by the holder to whom he makes payment inures 
 to his benefit, provided it actually reached them.'''* But it 
 has been observed that it would seem to be still unsettled 
 whether the notice inured to the benefit of the intcnnedi- 
 ate indorser, when the holder's diligence in sending notice 
 did not secure its actual reception."'* It is certain that no- 
 tice from a mere stranger is insufficient,^*' and it is equally 
 well established that a party to the bill who has been dis- 
 charged bv laches, and wlio could not in anv event sue, can- 
 not give notice for his own or another's benefit, he being- 
 then a mere stranger to the paper. **^ 
 
 § 366. Notice by agent. — Xotice given by an agent is the 
 same as if by the holder himself, and it may be either in the 
 agent's name, or in the name of any party entitled to give 
 notice.**^ The notary to whom the bill or note has been 
 given for presentment may, as the agent of th© holder, give 
 notice ;^^ but it is no part of his official duty;^"* and a bank 
 holding a bill or note for collection, or its officers or agents, 
 should, as a matter of duty, give the notice necessary.^^ Any 
 
 " Hilton V. Shepherd, G East, 14: Swayze v. Britton, 17 Kan. 627. 
 
 TSStalloid V. Yates, 18 Jolins. 327. 
 
 "'•* 1 Parsons on Notes and Bills, 027. 
 
 8» Stanton v. Blossom, 14 Mass. 11(5; Juniata Bank v. Hale, 10 Serg. 
 & R. 157; Brailsford v. Williams, 15 :Md. 150. 
 
 81 Harrison v. Ruseoe, 15 M. & W. 2:51 ; Turner v. Leech, 4 B. & Aid. 
 451 ; Thompson on Bills, 358. 
 
 82Woodthorpe v. Laws, 2 M. & W. 109; Harrison v. Buscoe, 15 M. 
 & W. 231 ; Benjamin's Chalmers' Digest, 182. 
 
 83Smedes v. L'tica Bank. 20 Johns. 372; Shed v. Brett, 1 Pick. 401; 
 Fulton V. McCracken, 18 Md. 528. 
 
 84 Harrison v. Robinson, 4 How. 330; Insurance Co. v. Wilson, 20 
 W. Va. 548. 
 
 85 0gden V. Dobbin. 2 Hall. 112; Bank of .Missouri v. \'au-,'haii, .SO 
 Mo. 90.
 
 240 PROTEST AXD NOTICE OF DISHONOR. § 307. 
 
 person indeed, in whose hands the bill lawfully is may give 
 the notice as holder or agent, as the case may be, and if 
 as agent, a verbal authoi-ity from the holder is suliicient.^^ 
 A bank or banker ^\'ith whom a bill or note is deposited to 
 present for acceptance or payment, or any agent to whom 
 it is indorsed for collection, is to be regarded as a distinct 
 holder for the pni-poses of notice, and has the same time to 
 notify the principal, and the princi])al the prior parties, as 
 if such bank or agent were the real o\\aier.^^ 
 
 If the holder be dead, his executor or administrator, if 
 there be one, should give the notice; but if none be ap- 
 pointed at the time of maturity, notice should be sent within 
 a reasonable time after an appointment is made.^* 
 
 § 367. To whom notice should be given; general rule. — 
 Each indorser of a bill or note is entitled to notice, and so 
 also is the drawer of a bill payable to a third party, as 
 bills generally are.^^ The acceptor of a bill and the maker 
 of a note are not entitled to notice, they being the primary 
 debtors, nor are those who, from their irregular execution 
 of the instrument, are adjudged joint makers or sureties, 
 their contract being to pay in default of the principal, at 
 all events.^ Where there are several successive indorsers, 
 the holder may, and ordinarily does, give notice to all, with 
 a view to preserve his recourse upon all. But he is not 
 bound to give notice to all, in order to bind those to whom 
 he does give it. He may, if he please, give notice to 
 anv one or more of the indorsers, who are then made liable 
 to him; and the indorser receiving notice must then notify 
 antecedent indorsers in order to assure himself."^ It is not, 
 therefore, necessary for the notary to take any notice of the 
 
 86 Cowperthwaite v. Sheffield, 1 Sandf. 416; Story on Bills, § 303. 
 
 87 Bank of United States v. Goddard, 5 Mason. 3G6 ; Worden v. 
 Nour.se, 36 Vt. 750; Friend v. Wilkinson, 9 Gratt. 31. 
 
 88 White V. Stoddard, 11 Gray, 38; 1 Parsons on Notes and Bills, 
 444, 559. 
 
 89 .Joseph V. Salomon, 19 Fla. 023; Sweet v. Swift, 65 Mich. 91. 
 sOFiteh V. Citizens' Nat. Bank, 97 Ind. 212; Hofheiraer v. Losen, 24 
 
 Mo. App. 657. 
 
 9iCardwell v. Allen, 33 Gratt. 167; Wood v. Callaghan, Gl Mich. 402,
 
 §§ 3G8, 3C9. xoTiCK ok disho.ncjk. J4i 
 
 residence of the maker of the note, or make any iii(|uiry as 
 to the residence of any of the indorsers except the last. A 
 different rule would obstruct business, and is not required.'**- 
 
 g 368. Notice to agent. — Notice to the agent of the party 
 for the general conduct of his business is the same as if 
 given to the principal in person."^ But notice to the party's 
 attorney or solicitor, unless he is specially authorized to re- 
 ceive it, is insufhcient.^"^ If an agent draw a bill in his own 
 name, notice should be given to him, and if given to his 
 principal it will be insufficient, lie being no party to the 
 paper."-*'' If the paper l)e signed by a duly authorized agent 
 in the principal's name, notice should be given to the prin- 
 cipal, who is the party liable.^*' Whether or not the agent 
 would be regarded as authorized to receive it, is questioned; 
 and it has been decided that authority to indorse is not au- 
 thority of itself to receive notice.""^ Tlio move fact that n 
 party is the " finnncial agent " of his principal does not of 
 itself constitute him an agent to receive notice.^^ An agent 
 constituted before the breaking out of a war which severs 
 him from his princi^ial, with authoi-ity to receive notice of 
 dishonor, may continue to act for that purpose; and notice 
 served upon liim will suffice to charge the indorser.^^ Tf a 
 note be payable by instalments, demand and notice as to 
 the last instalment binds the indorser as to that.^ 
 
 § 369. As to partners and joint indorsers. — If the drawers 
 be a partnership, notice to any one partner is sufficient." 
 
 t»2].a\vson V. Farmers' Bank, 1 Ohio St. 206; Warren v. Oilinaii. 17 
 :Me. :5G0. 
 
 o;; Crosse v. Smith, 1 ^Maiile & S. 545; Lake Shore Nat. Bank v. Cdl- 
 liery Co., 58 X. Y. S. C. GS. 
 
 94 Louisiana State Bank v. Ellery, IG Mart. 87; Crosse v. Smith, 1 
 Maule & S. 545. 
 
 95 Grosvenor v. Stone, 8 Pick. 79. 
 
 96 Clay V. Oakley, 17 Mart. 137. 
 
 97 Valk V. Gaillard, 4 Strob. 99; Wilcox v. Routh, 9 Smedes & M. 47G. 
 
 98 Xew York, etc., Co. v. Selma Sav. Bank, 51 Ala. 305. 
 
 99 Hubbard v. Matthews, 54 N. Y. 50. 
 1 Eastman v. Turman. 24 Cal. 383. 
 
 2Go\van v. .Jackson, 20 .lohns. 17G: People's Bank v. Keeth, 2G Mil. 
 521 ; St. Louis Bank v. Altheimer, 91 Mo. 190. 
 
 16
 
 242 VKOTEST AND NOTICE OF DISHONOR. § 370. 
 
 And it matters not that the firm was dissolved by war, and 
 that one of the partners was separated from the other by 
 a hostile line.^ If an indorser be a member of the finn, the 
 notice to the firm is sutficient.'* The general rule, that no- 
 tice to any partner is notice to the firm, is snbject to this 
 exception: that where one member resides at a distance, 
 and another at the place of protest, notice must be given to 
 the latter. At least, it has been so held;'^ but if the draw- 
 ers or indorse rs are joint, but not partners, notice must be 
 given to each of them, and notice to one only would not 
 even bind him.*' 
 
 ^ 370. Notice to indorsers for collection, and to accommoda- 
 tion and fixed drawers and indorsers. — The rule requiring 
 notice to the indorsers of bills and notes extends to all in- 
 dorsers, whether they are indorsers for value or mere agents 
 for collection. A banking-house, or other agent, merely 
 passing title to the bill or note by indorsement for purposes 
 of collection, stands on the same footing as any other in- 
 dorser in respect to notice."^ " In regard to notice, each, 
 branch of a bank is considered a separate establishment." ^ 
 But where the indorsement upon the bill or note was 
 made before its maturity, and after the bill or note had 
 been transferred with it upon it, and had been returned to 
 the indorser; and he, after paying it, and after the liability 
 of all parties had been fixed, and reissued it ^^-ith their in- 
 dorsements upon it, the general rule requiring demand of 
 the maker, and notice to the indorser, where the indorse- 
 ment was made after maturity, in order to charge the in- 
 dorser, would not apply. Tor in such case the demand had 
 
 •'5 Hubbard v. Matthews, 54 N. Y. 50. 
 
 4 Rhett V. Poe, 2 How. 457. 
 
 5 Hume V. Watt, 5 Kan. 34. 
 
 CBank of United States v. Bierne, 1 Gratt. 234; Union Bank v. Willis, 
 8 Mete. (Mass.) 512; Bealls v. Pock, 12 Barb. 245. 
 
 TSeaton v. Scovill, 18 Kan. 435; Lynn Nat. Bank v. Smith, 132 M'ass. 
 227; Butler v. Duval, 4 Yerg. 265. 
 
 8 Clode V. Bayley, 12 M. & W. 51.
 
 § 371. NOTICE OF DISnONOR. 243 
 
 been made, the notice given, and liis liability determined be- 
 fore lie reissued the instrument." 
 
 An accommodation drawer or indorser is as much entitled 
 to notice as if the drawing or indorsing was done for value ;^'^ 
 but if tlie drawer or indorser be himself the accommodated, 
 instead of the acconmiodating party, he is under obligation 
 to take up the bill or note, has no remedy on doing so 
 against any other party, and consequently is without legal 
 possibility of injury, and is not entitled to notice. ^^ 
 
 § 371. If drawer or indorser be dead or bankrupt. — If tlio 
 party entitled to notice be dead at the time the bill or note 
 becomes payable, and this is known to the hohler, notice 
 should be sent to his executor or administrator, if there be 
 any, and it can be ascertained by reasonable inquiry wdio 
 or where he is; and under such circumstances notice ad- 
 dressed to the deceased by name would be insufficient.^" 
 Kotice addressed to the '' legal representative," in a case 
 in which the death of the indorser was recent, and no per- 
 sonal representative had as yet qualified, has been deemed 
 sufticieni ;'•' but it has been held that if addressed to "the 
 estate," it would not, that term applying as well to the heirs- 
 at-law as to the executor or administrator.^"* And where 
 a personal representative has qualified, and is known, or 
 could be ascertained by due diligence, it would not be suffi- 
 cient to address notice through the mail to " the adminis- 
 trator," " executor," or " personal representative," by official 
 designation only, as it might lead to delay. The address 
 
 9 Daniel on Negotiable Instruments, § 997; St. John v. Roberts, 31 
 X. Y. 441. 
 
 10 Turner v. Samson, 2 Q. B. Div. 23; Tliillman v. Gueble, 32 La. Ann. 
 260; Braley v. Buchanan, 21 Kan. 555. 
 
 11 Daniel on Negotiable Instruments, §§ 995/i, 1085. 
 
 12 Oriental Bank v. Blake, 22 Pick. 206; Cayuga County Bank v. 
 Bennett, 5 Hill, 236. 
 
 13 Boyd's Admr. v. City Sav. Bank, 15 Gratt. 501; Pillow v. Harde- 
 man, 3 Huniphr. 538. 
 
 1^ (/'ayuga County Bank v. Bennett. 5 Hill, 23G; Massachusetts Bank 
 V. Oliver, 10 Cusli. 557.
 
 244 TROTEST AXl) XOTICE OF DISHONOR. § 372. 
 
 should be to such party by iiaiiie.^"' Notice to one of sev- 
 eral executors or administrators is sufficient.^*^ 
 
 If there be no personal representative, notice sent to the 
 family residence of the deceased will be sufficient ;^^ and it is 
 likewise sufficient if notice be addressed to the deceased, 
 Avhen, without negligence, the holder is not aware of his 
 dcath.^^ 
 
 If the party be bankrupt, it is best to give notice to him, 
 and to his assignee also. If there be as yet no assignee ap- 
 pointed, notice to him is sufficient ;^^ and perhaps it might 
 be sufficient even if one had been appointed.^*^ If given to 
 the assignee alone, it would probably be sufficient.^ 
 
 If the bankrupt has absconded, notice should be given his 
 assignee, if any there be; and if there be none, to any one 
 representing his estate.^" 
 
 § 372. How notice must be served when parties in same place. 
 ■ — If the notice is to be given to a party to whom it is not nec- 
 essary or allowable* to transmit it by mail, it should be sent 
 to or given at his place of domicile or place of business, and 
 delivery of notice at either will be sufficient,^^ even when 
 they are in different towns.^* When the party keeps a count- 
 ing-room or other business place, and has a private residence 
 also, it is usual to send notice to the place of business rather 
 than to the dwelling, and if notice is so sent to his place 
 of business during hours when he or some of his peo- 
 ple might be reasonably expected there, it is sufficient; 
 
 1' Smalley v. Wright, 40 N. J. L. 471. 
 
 le Bealls v. Peck, 12 Barb. 24.5; Lewis v. Bakewell, 6 La. Ann. 359. 
 l7Gooclnow V. Warren, 122 Mass. 82; Merchants' Bank v. Birch, 17 
 Johns. 25. 
 
 18 Barnes v. Reynolds, 4 How. (Miss.) 114; Maspero v. Pedesclanx, 22 
 La. Ann. 227. 
 
 19 ^r parte Moline, 19 Ves. 2i6. 
 
 20 1 Parsons on Notes and Bills, 50O. 
 
 21 Callahan v. Kentucky Bank, 82 Ky. 231. 
 
 22 Rhode V. Proctor, 4 B. & C. 517. 
 
 23 Williams v. 15ank of United States, 2 Pet. 96; Nevins v. Bank of 
 Lansingburjj;, 10 Mich. 547; Ireland v. Kip, 10 Johns. 491. 
 
 24 Bank of Geneva v. Hewlett, 4 Wend. 328; Donner v. Remer, 21 
 Wend. 10.
 
 § 373. NOTICE OK DlSJlOiNOK. 245 
 
 and if no one bo there in the usual hours, and in tlie ordi- 
 nary course of business, it is not necessary to leave a written 
 notice, or to send to tlie house where he lives, or to make 
 farther search for him, or incjuines about him, it being- 
 considered that he has dispensed with notice,^ Notice left 
 with a clerk, or person in charge, at the party's place of 
 business, in his absence, or at his ])lace of business, without 
 proof as to the person with whom it was left, is sufficient,^* 
 and proof tliat such person was not the party's agent has 
 been held irrelevant, notice being left at the right jdace.^^ 
 Hence, leaving it with his private secretary at his public 
 office is sufficient.^* If service be sought on the party at 
 his dwelling, it is sufficient to leave notice with his \vife, or 
 with any other person on his premises.^ 
 
 g 373. What is meant by expression " same place." — Ac- 
 cording to one class of cases, all persons are to be regarded 
 as of the same place who receive their mails through the 
 same post-office; and although the party entitled to notice 
 may in fact have his residence several miles distant in th«'- 
 country, those cases do not admit the post-office in the city 
 or town where he gets his mail matter, and where the holder 
 is to be used as a means of communicating notice. They 
 base the decision upon the doctrine that the mail is to be 
 used as a means of transmission only, and not as a place 
 of deposit.^" The courts of Tennessee, New York, >Iassa- 
 ehusetts, Louisiana, Mississippi, Virginia, and Nebraska sus- 
 tain this view. 
 
 25 (Jolilsmith V. Hlano, 1 Maiile & S. rtrA; State Bank v. Hcnnoii. If. 
 Mart. 226. 
 
 2G:\ronantile Bank v. INrfCarthy, 7 Mo. App. 318; Commpicial Bank 
 V. Ciovp. \'i La. 113; Meclianics" Banking Assn. v. Place, 4 Duer, 212. 
 
 27 .Jacobs V. Town. 2 La. Ann. !)G4. 
 
 28Merz V. Kaiser, 20 La. Ann. 377. 
 
 29BIakely v. Grant, G :Mass. 386; Fisher v. Evans, 5 Binn. r)42; CVom- 
 well V. Hynsnn, 2 Ksp. 511. 
 
 :!OSholburne Falls Nat. Bank v. Townsley, 102 Mass. 177; Barker v. 
 I [all. Mart. & Y. 183; Ireland v. Kip, 10 Johns. 490; Forbes v. Omaha 
 Nat. Bank, 10 Nebr. 338; Louisiana State Bank v. Rowell. Mart. .lOfi; 
 Patrick v. Beazley, (i How. (Miss.) 609; Brown v. Bank of Abinjrdon 
 (Va.), 7 S. E. 357.
 
 2-iG TROTEST AKD A^OTICE OV DISHONOK. § 374. 
 
 According to another class, if the party has no reg-ular 
 place of business in the city or town where the holder re- 
 sides or the instrument is payable, and resides some distance 
 in the country, but receives his mails in the city or town, 
 the mere fact that he w^ould get the letter out of the same 
 office it was put in, instead of a distant one, would not 
 vitiate the method of communication, every reason of con- 
 venience and certainty which apply in one case applying 
 with equal force in the other. To hold otherwise would 
 require the holder to give personal notice to an indorser 
 who did not reside in the same place as himself, or to send 
 it by mail to a post-office wdiere the indorser did not usually 
 receive his letters. 
 
 The Supreme Court of the United States has adopted this 
 view in preference to the more exacting view of the authori- 
 ties referred to; and has held that where the plaintiff bank 
 at w^hich the note was payable was located in Georgetow^n, 
 and the indorser, when the note fell due, resided two or 
 three miles distant in the country, having removed after 
 it was made from Washington city, but received his letters 
 through the Georgetown post-office, notice deposited in the 
 Georgeto^^m post-office, addressed to him at that place, w^as 
 sufficient. "^^ 
 
 § 374. Exceptions to the rule. — To the rule that wdien the 
 holder and the drawer or indorser live in the same place 
 service of the notice of dishonor must be personally made, 
 are the following exceptions: (1) If the party addressed 
 actually receives the notice in due season, or it can he prop- 
 erly inferred by the jury from the facts of the case that 
 the notice was received, the mere manner of its transmis- 
 sion is wholly immaterial, whether transmitted by mail, 
 telegraph, or otherwise. ^^ The distinction between the dif- 
 ferent modes of giving notice is this: that where the holder 
 
 31 Bank of Columbia v. Lawrence, 1 Pet. 578 ; Bank of United States 
 V. Norwood, 1 Harr. & J. 423; Cist v. Lybrand, 3 Ohio, 307; Jones v. 
 Lewis, 8 Watts & S. 14. 
 
 32Hyslop V. .Tones. 3 Mclean, 69; Dicken v. Hall, 87 Pa. St. 379; First 
 Nat. Bank v. Wood, 51 Vt. 471.
 
 g ;j70. .NuTicK OF m.siioNOK. 247 
 
 and indorser reside in different places, the former, if he 
 deposits the notice in the post-otiice in tine season, has no 
 fnrther burden (.n liim as to the actual receipt of it hy the 
 latter; but where both parties live in the same town, the 
 sender of the notice is bound to show that it was actually 
 received bv the indorser in due season."''^ (2) AVliere letter 
 carriers are employed in the postal service to deliver letters 
 at the houses or places of business of parties, who usually 
 receive their letters through them. In such cases, if the 
 notice be depositctl in the post-office early enoufi-h in the 
 day to go by the letter-carrier, on the same day, to the 
 party entitled to notice, it will be deemed sufficient. •''"* (3) 
 When the party entitled to notice has recently died, and 
 no personal representative has been appointed. ^^ (4) Where 
 there are several distinct \dllages or post-offices in a to\\Ti, 
 between which there is a regular intercourse bv mail, it 
 may be employed for the conveyance of notice, notAnth stand- 
 ing the fact that the parties reside in the same general 
 municipality.^^ 
 
 § 375. How notice must be served when parties in different 
 places. — When the parties reside in different places, or the 
 party entitled to notice resides at a place other than the par- 
 ticular place at which the bill or note is payable, it will, in 
 general, be sufficient for the holder to put notice of dishonor 
 in the post-office, addressed to the party entitled thereto, 
 ^^'lthin the proper time. This done, his duty is discharged, 
 and it is not necessary that the notice should be received — 
 the holder not being responsible for any miscarriage of the 
 mail.^^ But the notice must be properly addressed to the 
 party at a distance entitled to receive it; and if it be directed 
 to " Darcy " as indorser, instead of '' Darey," the correct 
 
 33 Cabot Bank v. Warner, 10 Allen, 522. 
 
 34 Shoemaker v. Mechanics' Bank, 59 Pa. St. 83; Walters v. Brown, 15 
 Md. 292. 
 
 35 Boyd's Admr. v. City Sav. Bank, 15 Gratt. 501. 
 
 30 Bell V. Hajrcrstown Bank, 7 Gill, 21(1; Shaylor v. Mix. 4 Allen, 351 ; 
 Gist y. Lybrand. 3 Ohio. 307. 
 
 37Bussanl v. Levering, Wlieat. 102; Shelburne Falls Nat. Bank v. 
 To\msley, 102 Mass. 177.
 
 248 PROTEST AXD NOTICE OF DISHONOR. § 3TG. 
 
 name, it is negligence which discharges him.^* The notice 
 should be directed to the post-office at, or nearest to, the 
 party's place of residence, unless he is accustomed to re- 
 ceive his letters at another post-office, in which case it should 
 be directed thereto.^ If he live at one place and has his 
 place of business at another, notice may be sent to either;'**^ 
 and the place where the party actually resorts to for his 
 letters is always the appropriate one, when known, for no- 
 tice to be addressed to, whether or not the party lives there 
 or has there his place of business.*' If the place be that 
 of his actual residence at the time, it need not be his 
 domicile.*^ 
 
 § 376. Address. — The indorser has a right to direct to 
 what postal address, or to what place, notice shall be sent, 
 and it ^vill always suffice to pursue his direction although 
 he may have a place of residence or business elsewhere.*^ 
 Sometimes the place to which he desires notice to be sent 
 is designated by memorandum on the instrument, as, for 
 example, by writing the words " 214 E. 18th Street," or 
 by adding his address to his signature, as, for instance, 
 ''"^Memphis, Tenn.," or " Walnut Bend, Arkansas," or " 13 
 Chambers Street, N'ew York," or " W. Moors, Manchester," 
 or " T. M. Barron, London," and he thereby impliedly 
 directs notice to be sent to the place designated.*"* It is 
 not sufficient to direct notice .<renerally to a parish, county, 
 or township within which there are a number of post- 
 as Darey V. .Tones, 1.3 Vroom, 28. 
 
 39 Bank of Columbia v. Lawrence, 1 Pet. .582; National Bank v. Cade, 
 73 Mich. 449; Northwestern Coal Co. v. Bowman, C9 Iowa, 103. 
 
 if^'Bank of United States v. Carneal, 2 Pet. 549; Reid v. Payne, 16 
 .Johns. 218. 
 
 41 Farmers' Bank v. Gunnell, 26 Gratt. 137; Lindenberger v. Beall, 6 
 Wheat. 104: Munn v. Baldwin, G Mass. 316. 
 
 42 Young V. Durgin, 1.5 Gray, 264. 
 
 4'{Bell V. Hagerstown Bank, 7 Gill, 216; Dicken v. Hall, 87 Pa. St. 
 .379; Tyson v. Oliver, 43 Ala. 455. 
 
 44'Bartlett v. Robinson, 39 N. Y. 187; Carter v. Union Bank. 7 
 Humphr. .548; Peters v. Hobbs, 25 Ark. 07; Morris v. Husson, 4 Sandf. 
 93; Mann v. Moors, Ryan & M. 149; Bnrmester v. Barron, 17 Q. B. 828.
 
 § 376. XOTICK OF DISIIONOIJ. 249 
 
 offices ;■*•"' lull it has been held that it was sufficient to direct 
 notice to the party at tlio shire town of the county, al- 
 though there was a post-office nearer to him which he was in 
 the lialiit of using.'**' Where there are two |)ost-officc's in 
 the town where the party resides, notice may be directed to 
 the town generally, unless the holder knows, or should 
 know, that he receives his letters at one of them, in which 
 case notice should be directed there. *^ If the party live 
 in one place and have his place of business at another, the 
 holder of a bill or note protested at a third place should 
 send notice to the place at which he usually receives his 
 letters ;^^ but if the holder does not know that he usually 
 receives at the place where he is engaged in business, it 
 will be sufficient to send it to the place where ho livens."*'' 
 In the case of parties residing temporarily in a certain place 
 — members of Congress or of a State Legislature residiug 
 at their respective capitals, while the bodies to which they 
 belong are in session, for instance — it is sufficient and 
 proper that notice should be sent to them at such place, or 
 left there at their place of residence-/'" 1)ut after the atljonrn- 
 ment of the session the rule would no longer apply, and 
 notice should be sent to the party's permanent i)lace of 
 residence.'^^ And while Congress is in session it will not 
 be sufficient to deposit notice for the member in the post- 
 office of the Senate or House of Kepresentatives, as it should 
 be served personally by a party in the same place at his 
 residence, or where he might personally be.^" 
 
 45 Beeiu'l V. Tournillon, li Kob. (La.) 500. 
 
 40 Weakly v. Bell, 9 Watts, 273; Story on Bills, § 297. 
 
 47 Burlingame v. Foster, 128 Mass. 125; Saco Nat. Bank v. Sanborn. 
 63 Me. 340. 
 
 48 Bank of Geneva v. Hewlett. 4 Wend. 328; Reed v. Payne. 10 John-*. 
 218. 
 
 49 Seneca County Bank v. Neasa, 2 X. Y. 442. 
 
 50 Chouteau v. Webster, Mete. (Mass.) 1: Graham v. Sangston. 1 Md. 
 .59; Man- v. Johnson, 9 Yerg. 1. 
 
 51 Bayley's Admr. v. Chubb, 10 Cratt. 284. 
 
 52 Hill V. Norvell. 3 McLean, 583.
 
 250 PKOTE>>T AND NOTICE OF DISHONOR. § 377. 
 
 § 377. Address, continued; several post-offices, large cities, 
 etc. — Where there are two or three post-offices at which 
 the indorser is in the habit of receiving his letters, notice 
 may be sent to cither ;^^ and where he lives at eqni-distance 
 from two post-offices, notice addressed to one will suffice, 
 althongh he was accustomed to receive his letters at the 
 other. "^ AVhere the party lives in the United States, it is 
 especially important in sending notices by mail to put the 
 full address, town and State, as there are many cases in 
 which the same name is applicable to towns and cities in 
 different States. An omission to name the State, where 
 there is more than one place bearing the name of the town, 
 would be fatal if the notice were not duly received at the 
 right place.^^ 
 
 Tt has been held in England not sufficient to address the 
 notice to a person at a large town, as, for instance, to " W. 
 Haynes, Bristol," without specifying in what part of it he 
 resides, because there might be in so large a town many 
 persons to whom so general an address might apply, the 
 surname alone being given without any special designation 
 that might identify him.^^ But unless the name were very 
 common — John Smith, for instance — an address to a large 
 city, giving the full christian name as well as the surname, 
 would doubtless be regarded as sufficient. And in Massa- 
 chusetts, where notice was addressed to " Mrs. Susan Col- 
 lins, Boston," it was held sufficient to charge her as indorser, 
 it not appearing that there was any other person of the 
 same name.^^ The soundness of the doctrine stated in the 
 latter case has been doubted by some courts — the latter 
 holding that such an address would be prima facie insuffi- 
 cient, even though the town to which it should be sent was 
 not a large one — the principle being that numerous per- 
 
 53 Bank of the United States v. Carneal, 2 Pet. 543; Slielburne Falls 
 Nat. Bank v. Townsley, 102 Mass. 177. 
 
 54 Rand V. Reynolds, 2 Gratt. 171; Follain v. Dupre, 11 Rob. (La.) 
 454. 
 
 55 Beekwitli v. Smith, 22 Me. 125. 
 
 50 Walter v. Haynes, Ryan & M. 149. 
 
 57 True V. Collins, 3 Allen, 440; Morse v. Chamberlain, 144 Mass. 408.
 
 §§ 378, 370. NoTicK oi i;iMio-\ui:. 251 
 
 sons with the same surname may be, aiul frequently are, 
 found In ilu- same town, if one has a fixed residence, the 
 law presumes that it continues, and notice sent t«. the old 
 address will he sufficient, unless the removal wan under cir- 
 cumstances of peculiar notoriety. 
 
 § 378. Time within which notice may or must be ^ven. — 
 Referring to the time of the day of the dishonor at which 
 the holder may give notice, it is well settled that as soon 
 as the demand is made, and the dishonor has occurred, the 
 holder need not wait until the close of business hours to 
 send notice.^'** Mr. C'hitty says: " It seems clear that notice 
 of nonpayment may be given on the last day of grace, when- 
 ever, after due presentment and demand, the drawee makes 
 an unqualified refusal to pay at all." ™ 13ut it is clear that 
 the holder is not obliged to give notice immediately on the 
 very day of the dishonor, although he has the option so to 
 do.''" The settled rule is that the holder has until the ex- 
 piration of the following day to give notice; and he is not 
 confined within the business hours of the day to give the 
 notice at the party's dwelling.*^^ lie may give it there at 
 any time before the hours of rest; l)nt if he gives it at the 
 place of business, it must be done during the hours of busi- 
 ness.^^ 
 
 § 379. When the parties reside in different places. — If the 
 holder and the party or parties sought to be bound live in 
 different places, and there is mail communication between 
 them, the rule laid down by the United States Supreme 
 Court is, that the notice should be deposited in the post 
 in time to be sent bv the mail of the dav after dishonor, 
 provided such mail is not closed before early and convenient 
 
 58 Bank of Alexandria v. Swan, 9 Pet. 33; Lenox v. Roberts, 2 Wheat. 
 373; Price v. Young, 1 McCord, 339. 
 
 SOChitty on Bills [*482]. 544. 
 
 ooDarbishire v. Parker. G East, 8: Tindall v. Brown, 1 T. R. 168: 
 Phelps V. Stocking, 21 Nebr. 444. 
 
 C'l Jameson v. Swinton, 2 Taunt. 224; Bayley on Bills, 176. 
 
 62 Parker v. Gordon, 7 East, 385; Adams v. Wright. 14 Wis. 408; 
 Cavuga County Bank v. Hunt. 2 Hill. 035.
 
 252 PROTEST AXD NOTICE OF DISHONOR. § 380. 
 
 business hours of that day; in which case it must be sent 
 by the next mail thereafter.''^ 
 
 In other words, the notice must be sent by the first mail 
 which leaves after the day of dishonor is past, and does not 
 close before early and convenient business hours of the day 
 succeeding- the day of dishonor; the design of the laAV being 
 to afford the holder an opportunity to mail the notice on 
 the day succeeding that of dishonor. 
 
 This rule is sanctioned by numerous and eminent au- 
 thorities, either expressly or by implication, and, it seems 
 to us, adopts the only principle which may be safely fol- 
 lowed in all cases.'^ 
 
 What hour of the next day after dishonor may be con- 
 sidered as reasonably early and convenient within the mean- 
 ing of this rule must depend upon the habits of the busi- 
 ness community in each place, and no precise hour can be 
 arbitrarily named. If the mail closes before early business 
 hours of the day after dishonor, whether it be during the 
 night ])efore, or at three, four, five, or six o'clock a. m. 
 thereof, the notice need not, under the nde, be sent 
 thereby.*'^ Seven o'clock seems debatable,*'^ at least the hour 
 is not clearly A\athin early business hours, unless at some 
 particular localities, and sunrise is certainly too soon.^'^^ 
 
 § 380. Each holder has a day to ^ve notice to his prede- 
 cessor on the paper — The party receiving the notice may de- 
 sire to communicate it to parties antecedent to him, and 
 others before him like^rise to transmit it to those ante- 
 cedent to them. Tn such cases the general rule also is, that 
 
 fi'i United States v. Barker, 12 Wheat. 559; Fullerton v. Bank of 
 the United States, 1 Pet. 005. 
 
 64 Farmers' Bank v. Diivall, 7 (iill & J. 7.S ; Burgess v. Vreeland, 4 
 N. J. 71; Chi.k v. Billsbuiy, 24 Me. 458; Eagle Bank v. Chapin, .3 Pick. 
 180. 
 
 fiSGeill V. Jeremy, 1 Moody & M. 61; Mitchell v. Cross, 2 R. I. 437; 
 Wemple v. Dangerfield, 2 Smedes & M. 445; West v. Brown, 6 Ohio St. 
 542; Chick \. Pillsbury, 24 Me. 458. 
 
 '5''' Stephenson v. Dickson, 24 Pa. St. 148; Commercial Bank x. King, 
 3 Rob. (La.) 243. 
 
 fi'Deminds v. Kirkman, 1 Smedes & M. 644.
 
 § 381. NOTICI-: ov DisiiuNoK. 253 
 
 each successive party who receives notice of dishonor is 
 entitled to a full day to transmit it to any antecedent party 
 who is chargeable over to him upon payment of the bill or 
 note.*'^ So that, if a ]nirty receives notice on one day, he is 
 not bound to forward it to a prior indorser until the next 
 day, and not then if the nuiil leaves before early business 
 hours. A different rule would subject every party to the 
 inconvenience of c,iving an account of all of his other en- 
 gagements, in order to prove that he could not reasonably 
 be expected to send notice by the same day's post which 
 brought it.*^® 
 
 Fpon receiving notice of dishonor, the indorser should — 
 if there be prior parties whom he wishes to hold liable — • 
 immediately notify not only the one immediately antecedent 
 to him, but all of them; for otherwise, by the negligence 
 of his previous indorser, or of some one of the successive 
 indorsers, he may lose recourse against some or all of them 
 but the one notified by him.'^'^ 
 
 § 381. Transmission of notice over seas. — In the case of a 
 foreign bill protested in one of the United States, and the 
 party entitled to notice resides in some other nationality 
 bevond seas, it is sufficient to send notice by the first regu- 
 lar ship; and it is no objection that if sent by a chance 
 ship it would reach him sooner."^ It should be sent by the 
 ship going to the port at which the party resides, or to 
 some neighboring or convenient port according to the usual 
 course of transportation of letters of business, if a reason- 
 able time before its departure is left for writing and for- 
 warding the notice."^ Other^\^se, it vnW be too late, unless 
 the delay be excused by circumstances.'^^ 
 
 68 Jameson v. Swirton, 2 Taunt. 224: Lawson v. Farmers' Bank, 1 
 Ohio St. 200: Seaton v. Scovill. 18 Kan. 435. 
 
 69 Bray v. Hadwen. 5 :Maule & S. 68. 
 
 70 Daniel on Neorotiable Instruments, § 1044. 
 
 71 iluilman v. D'Emiino. 2 II. Bl. 56.5; Darbishire v. Parker, 6 East. 3; 
 Bylcs on Bills [•272], 421. 
 
 72 Story on Bills, § 2Sfi: 1 Parsons on Notes and Bills, 485, note. 
 73 Lenox v. Leverett, 10 Mass. 1.
 
 CHAPTER XIII. 
 
 CIRCUnSTANCES OF A GENERAL OR SPECIAL NATURE 
 WHICH EXCUSE WANT OF PRESENTMENT, PROTEST, 
 OR NOTICE OF DISHONOR. 
 
 SECTION I. 
 
 CIRCUMSTANCES OF A GENEEAL NATURE WHICH EXCUSE WANT 
 OF PRESENTMENT, PROTEST, OR NOTICE OF DISHONOR. 
 
 § 382. Classification — The circumstances of a general 
 nature which excuse the holder when there has been a failure 
 on his part to make due presentment of the bill or note 
 to the drawee, acceptor, or maker, or to convey due notice 
 of dishonor to the drawer or indorser, may be classified as 
 follows : 
 
 (1) The breaking out of a war between the country of 
 the holder and that of the party to whom presentment 
 should be made or notice given. 
 
 (2) Public and positive prohibitions of commercial inter- 
 course between the countries of the holder and that of 
 the party to whom presentment should be made or notice 
 given. 
 
 (3) The occupation of the country where the parties live, 
 or Avhore the l)ill or note is payable, by a public enemy, or 
 by military forces, which obstructs or suspends commercial 
 intercourse. 
 
 (4) Political disturbances amounting to a virtual inter- 
 ruption and obstruction of the ordinary negotiations of trade. 
 
 (5) The prevalence of a malignant epidemic disease, which 
 suspends the ordinary operations of business. 
 
 (C)) Overwhelming calamity, or unavoidable accident, 
 which obstructs the usual channels of communication. 
 
 These circumstances are of a character not affecting the 
 inrlividual peculiai'ly, but having such a general influence 
 upon the country or the community as to impede and pre- 
 
 [254]
 
 §§ 383, 384. cIR^r^rsTAXCI•:s or a oeneual nature. 255 
 
 vent the ordinary pursuits of business, or obstruct the 
 methods of communication, and they are recofpiized, ahnost, 
 if not quite, universally, as exonerating those who come 
 under their operation from the performance of the obliga- 
 tions in respect to negotiable instruments with which they 
 interfere. 
 
 § 383. When impediment ceases, duty to make demand or 
 give notice revives. — riiese excuses — war, military or politi- 
 cal disturbance, interdiction of commerce, prevalence of dis- 
 ease, overwhelming accidents, et cetera — do not justify a 
 total dispensation of demand and notice, but only excuse 
 the delay which these circumstances may occasion. As soon 
 as the impediment ceases, the duty revives; and if demand 
 and notice be not speedily made, the holder is in default, 
 and drawers and indorsers are discharged.^ Thus, where 
 the holder of a bill in Xew York delayed, for several months 
 after restoration of commercial intercourse between Xew 
 York and 'New Orleans (the former being in the Ignited 
 States, and the latter in the Confederate States during the 
 war of secession), to present the bill to the acceptor in Xew 
 Orleans for payment, it was held that the drawer was dis- 
 charged.^ Tn ^Maryland, it was said by Stewart, J.: " There 
 must be the earliest possible presentment when impediment 
 ceased." ^ 
 
 ^ 384. War, public interdiction of commerce, military dis- 
 turbances, etc. — A declaration of war between the country 
 where the holder is domiciled and that where the party 
 to wdiom presentment should be made or notice given is 
 domiciled, or the breaking out of hostilities between such 
 countries, operates as an interdiction of all commercial inter- 
 course; and all communication between the subjects of the 
 belligerents, or parties on opposite sides of the belligerent 
 line, is prohibited. This is a general principle of the law 
 of nations, recognized and applied to all kinds of transac- 
 
 1 Housp V. Adams, 48 Pa. St. 2CG; Farmers' Bank v. Gunnell, 2G Gratt, 
 132: James v. Wade. 21 La. Ann. 548. 
 
 2 Durden v. Smith, 44 Miss. 552. 
 SXqrris v. Despard. 38 Md. 491.
 
 256 EXCUSES FOR XOiS'PKESENTME^'T, ETC. § 385. 
 
 tions; and it constitutes a clear and admitted justification 
 of the omission to make due presentment of the bill or note 
 or to give notice, during the continuance of hostilities or 
 the suspension and prohibition of intercourse.^ Illustrative 
 of the proposition stated, interesting cases have arisen grow- 
 ing out of the war between the States, some authorities ad- 
 hering to the view that as commercial intercourse between 
 the United States and the secession States was not inter- 
 dicted until August 16, 1861, by proclamation of President 
 Lincoln, contracts between persons in the Union and the 
 seceded States were not until that time illegal;^ others hold- 
 ing that the test is the existence or nonexistence of an actual 
 state of war, and that no express prohibition is necessary to 
 determine that fact.®- 
 
 The interdiction of intercourse between the countries of 
 the holder and of the party to whom presentment should be 
 made would excuse the holder for nonpresentment and notice 
 as effectually as a declaration or open state of war.^ It like- 
 wise follows that where the occupation of the countr}^ by 
 the public enemy is of such a character as to sever the parties 
 from each other by a hostile line, the same principle applies 
 as if they Avere in fact domiciled in different countries at 
 war with each other.® 
 
 ? 385. Political disturbances, epidemics, overwhelming 
 ccilamities, etc. — Wlien political disturbances virtually inter- 
 rupt and obstruct the ordinary negotiations of trade, they 
 constitute a sufficient excuse for want of presentment or 
 notice, upon the same principle that controls in cases of 
 military operations or interdictions of commerce.® 
 
 4 Harden v. P.oyc-e, .59 Barb. 427; House v. Adams, 48 Pa. St. 2GI; 
 Norris v. Despard, .38 Md. 491. 
 
 •■5 Leathers v. Connectic-ut Ins. Co., 2 Bush, 296; Union Nat. Bank v. 
 Marr's Admr.. Bush, 61,5. 
 
 BBilgerry v. Brancli, 19 Oratt. .39.3; McVeigh v. Bank of Old Dominion, 
 26 Gratt. 78.5. See Griswold v. Waddington, 19 .Tohns. 438. 
 
 7 Story on Notes, §§ 2.57, 26.3; 1 Parsons on Notes and Bills, 461. 
 
 sPolk'v. Spinks. .5 Coldw. 431; Blair & Hoge v. Wilson, 28 Gratt. r<2; 
 Tardy v. Boyd, 26 Gratt. 6.32. 
 
 9 Story on Notes, § 261; Blair & Hoge v. Wilson, 28 Gratt. 172.
 
 § 386. CIRCUMSTANCES OF A SPECIAL NATURE. 257 
 
 The prevalence uf a malignant, contagious, or infectious 
 disease, such as the cholera, yellow fever, the plague, or 
 small-pox, which has become so extensive as to suspend all 
 commercial business and intercourse, or to render it very 
 hazardous to enter into the infected district, is recognized 
 l)y the text-writers as a sufficient excuse for not doing any 
 act which would require an entry into 3uch district.^" And 
 everv consideration <»f publif jiolicy and of humanity must 
 sanction this rule. 
 
 The existence of an overwhelming calamity or inevitable 
 accident, which suddenly intervene, without any default ou 
 the holder's part, and which render it impossible or imprac- 
 ticable to make due presentment or to give due notice, will 
 excuse the holder for his failure in regard to presentment 
 and notice. Among the circumstances of this class may 
 be enumerated freshets which carry away bridges and de- 
 stroy the means of communication; violent snow storms 
 which render the roads impassable; tornadoes and earth- 
 fiuakes which paralyze all affairs for the time being, or ren- 
 der intercourse impracticable.^^ 
 
 SECTTOX TT. 
 
 CIRCUMSTANCES OF A SPECIAL NATURE WHICH EITHER EXCUSE 
 WANT OF, OR SHOW ABSENCE OF A RIGHT TO REQUIRE, PRE- 
 SENTMENT, PROTEST, OR NOTICE OF DISHONOR. 
 
 § 386. Classification Besides the circumstances of a gen- 
 eral nature which excuse delay or absence of presentment, 
 protest, or notice, there are some of a special nature which 
 have the like effect. These special circumstances may be 
 classified as follows: I. Circumstances sho\ring an original 
 absence of right to require these steps to be taken. IT. 
 Circumstances arising from special acts of waiver. ITI. 
 Circumstances which show an inability on the part of the 
 
 10 1 Parsons on Notes and Bills, 4G0, 331: Edwaids on Bills. 492: 
 Story on Bills. § 30S. 
 
 11 Windham Bank v. Norton, 22 .Conn. 213: Hilton v. Shepherd, 6 
 East, 16; Chitty on Bills [*451], 509; Stoiy on Bills, §§ 283, 286, 308, 
 327, 365. 
 
 17
 
 258 EXCUSES FOR NONPRESENTMENT, ETC. § 387. 
 
 holder to make duo presentment or protest, or give notice. 
 IV. Special circumstances arising from tlie conduct of the 
 party. V. Special ^vaivers by promises to pay and part pay- 
 ments after maturity. These circimastances, thus classified, 
 will be now separately considered. 
 
 § 387. Circumstances which show absence of right to require. 
 — When the drawer has dra\\Ti the bill without the right 
 to do so, or without any reasonable ground to expect that 
 the drawee would honor it, the omission of the holder to 
 make a due presentment of it for acceptance or payment 
 (no acceptance intervening), or to give the drawer due notice 
 of its dishonor by the drawee, mil be excused.^" This doc- 
 trine rests upon the ground that the drawer has conmiitted 
 fraud or folly in undertaking that the drawee would honor 
 his bill, w^hen he had no right or reasonable ground to ex- 
 pect it; and that he can suffer no loss or injury from the 
 failure of the holder to make a presentment to the draw^ee, 
 which would naturally be fruitless, or to give him, the 
 drawer, notice of a dishonor which he must have known by 
 anticipation. And if the drawer has no funds in the drawee's 
 hands A^ath which to meet the bill, and the drawee has not 
 in any Avay or to any extent obligated himself to accept it, 
 the draAver has no right to expect or require formal present- 
 ment of the bill for acceptance.^^ And if the bill has been 
 accepted for the mere accommodation of the drawer, and he 
 has undertaken to supply funds to meet it, a failure to pre- 
 sent it to the acceptor will be excused as against the drawer, 
 who could not suffer save from his oaati laches. ^^ 
 
 If the drawer A\athdraws the funds which he had in the 
 drawee's hands when he drew the bill, or intercepts funds 
 Avhich he had provided to meet the bill; or if he privately 
 directs the drawer not to honor it, or otherwise prevents 
 the due acceptance or payment of his draft, he commits a 
 
 laChitty on Bills [*436], 490; Story on Bills, §§ 280, 375. 
 
 13 Beckerdike v. Bollnian, 1 T. R. 405; Donncll v. Savings Bank, 80 Mo. 
 172; C'ompton v. Blair, 46 Mich. 1.. 
 
 14 French v. Bank of Columbia, 4 Cranch, 141 ; Torrey v. Foss, 40 Me. 
 74; Ross v. Bedell, 5 Duer, 462.
 
 § 388. CIRCUMSTANCES OF A SPECIAL NATUEE. 250 
 
 fraud ii[)on tlio lioldcr <if tlic l»il], and forfeits liis right to 
 require demand and notice. ^^ 
 
 But the bona fide expectation of the drawer based upon 
 his rehilions with the drawee, and the provision he has niacU', 
 or intends to make, and does make, are the circumstances to 
 be regarded. If he has no funds in the drawee's hands when 
 he draws, and yet provides them before presentment, he 
 should have notice.^" If the drawer has anv arrangement 
 by which, at the time the bill is presented, he has a right 
 to expect it to be honored (/. e., running open account with 
 drawee, with insufficient balance to his credit), we should 
 say he should have demand and notice,^^ for it would be 
 presumed that such arrangement was contemplated when 
 he drew. 
 
 §388. Waiver; general principles. — When presentment of 
 the bill or note at maturity has been dispensed with by prior 
 agreement between the parties, or, in other words, has been 
 waived l)y the party entitled to require it, the holder is ex- 
 cused for his failure to make it. It would be a fraud upon 
 the holder to permit him to suffer l)y acting ui)(>u the as- 
 surance of the party to whom he looks as security upon the 
 paper; and as |)rompt presentment is a requirement solely 
 for the benefit of the drawer and indorser, they are them- 
 selves the sole judges to determine whether or not they will 
 enforce it. The waiver may be either verbally or in writing; 
 it may be expressed in tot idem verbis, or inferred from the 
 Avords or acts of the party; and it matters not what particu- 
 lar language may be used, so that it conveys the idea that 
 the presentment at maturity is dispensed with. The like 
 observations apply to the protest and notice. Where the 
 indorser of a check wrote over his name, " waiving demand 
 and notice," it was held that lie was not entitled to re- 
 
 15 Dickens v. Beal, 10 Pet. r)72: Rhett v. Toe, 2 How. 457; Valk v. 
 Simmons, 4 Mason, 113; SutclilTe v. McDowell, 2 Nott & McC. 251. 
 
 16 Robins v. Gibson, 3 Campb. 334; Hammond v. Dufresne, 3 Campb. 
 145; Orear v. :McDonakl. 9 Gill, 350. ' 
 
 iTThackray v. Blackett. 3 Campb. 164; Legge v. Thorpe, 12 East, 171;, 
 1 Parsons on Notes and Bills, 548.
 
 260 EXCUSES FOR NONPRESENTMEKT, ETC. § 389. 
 
 quire any demand of the maker, or notice to himself of non- 
 pajanent, as conditions precedent to his liability. Such 
 words have the effect of dispensing with the necessity for 
 those formalities.^^ 
 
 § 389. Character and effect of waiver. — The waiver may 
 be express or implied. It may result, therefore, that the 
 waiver may be either direct and positive, or may arise from 
 implication and usage, or from any understanding between 
 the parties which is of a character to satisfy the mind that 
 a waiver is intended;^'' but there is authority to the effect 
 that such waivers as we are now treating of should receive a 
 strict construction. And it has been said that to show a 
 waiver of demand and notice there must be clear and un- 
 equivocal evidence, and that equivocal circumstances or 
 ag-reements will not suflice.^° And it is well settled that a 
 promise to pay after maturity, or an acknowledgment of 
 continued liability, vdth knowledge that the usual steps of 
 demand, protest, and notice were not duly taken, constitutes 
 an implied waiver^ and the liability of the drawer or in- 
 dorser is absolutely fixed thereby; and part payment after 
 maturity by the drawer or indorser is presumptive evidence 
 that the party was duly charged by demand and notice. 
 
 The waiver may be either written or verbal, and it is con- 
 ceded on all sides that a verbal waiver is as effectual as a 
 written one; and the weight of authority sustains the propo- 
 sition that a parol promise to pay the note absolutely, made 
 by the indorser at the time he indorses it, or a promise to 
 pay it if the maker does not, or a verbal agreement between 
 the ])arties that payment should not be demanded imtil 
 after maturity, is admissible to prove a Avaiver of demand 
 and notice. Such evidence is not offered for the purpose 
 of varying the written contract of indorsement, which is 
 
 IS Daniel on Negotiable Instruments, § 1090; Emery v. Hobsen, 62 
 Me. 578; Woodman v. Thurston, 8 Cush. 157. 
 
 19 Fuller V. McDonald, 8 Greenl. 213; 1 Parsons on Notes and Bills, 
 594. 
 
 20 Bird V. Le Blanc, 6 La. Ann. 470; Gregory v. Allen, Mart. & Y. 74; 
 Story on Bills, § 371.
 
 § 3U0. CIRCUMSTANCES OF A SPECIAL NATURE. 261 
 
 simply to pay tho note after exercise of duo diligence against 
 tlio maker, but to show that the parties have between them- 
 selves settled the amount of diligence to be required.^'* It 
 has been held ditierently," but the doctrine of the text 
 seems to us more consistent with the principles upon which 
 waivers are sustained. 
 
 It may be, if written, either upon the instnuiient itself, 
 or upon a separate paper, written prior to, contemporane- 
 ously with, or subsequent to the indorsement.^' And the 
 terms of the waiver nuiy be either narrow or broad — either 
 to include all the steps usually necessary to fix the liability 
 of the indorser, or any one or more of them ; and while tho 
 tendency of the courts is to construe a waiver as including 
 all of the steps necessary to fix liability, yet a waiver is not 
 to be construed to extend beyond the fair and reasonable 
 import of its terais. Therefore, a waiver of notice, which 
 is a separate and distinct step from the presentment, is not 
 regarded as waiving the presentment or demand upon the 
 drawee or maker. Hie drawer or indorser may have had 
 confidence that the drawee, acceptor, or maker would honor 
 tho bill or note upon its presentment; or the holder may 
 have insisted on not incurring the risk of diligence required 
 in giving prompt notice.^"* 
 
 § 390. Circumstances which show inability on part of holder 
 to make due presentment or protest, or g^ve notice; when no 
 one in existence upon whom to make demand. — AVhere there 
 is no person in existence upon whom demand can be made, 
 or none who is legally liable, the presentment is excused, 
 for the reason that it is either an impossibility or that it 
 Avould be a fraud upon the holder to require it. Thus where 
 
 21 Sigerson v. Mathews, 20 How. 496; Yeajrer v. Falwell, 13 Wall. 12; 
 E,os.s V. Hurd. 71 X. Y. 14; Armstrnnfr v. Chadwick. 127 Mass. lo6; Dre 
 V. Scott, 35 Ohio St. 194; Annville Nat. Bank v. Kettering, lOG Ta. St. 
 531 ; Boyd v. Cleveland, 4 Pick. 525. 
 
 22Beeler v. Vrost, 70 :Mo. ISO; Barry v. Morse, 3 N. H. 132. 
 
 23 Daniel on Xegotiable Instruments, §§ 10926. 1093: Dnvall v. Farm- 
 ers' Bank, 7 Gill & J. 44; Sponeer v. Harvey. 17 Wend. 489. 
 
 24 Daniel on Xepotiable Instruments. § 109G; Backus v. Shepherd, 11 
 Wend. 629; Voorhees v. Atlee, 29 Iowa, 49.
 
 2G2 EXCUSES FOR NONPRESENTMENT, ETC. § 391. 
 
 the maker has died before maturity, and there is no per- 
 sonal re^jresentative of whom payment could be demanded, 
 it cannot of course be made; but it would be otherwise if 
 a personal representative had been appointed.^^ And so in 
 all cases, where there is an actual party bound as promisor, 
 but no one then existing who represents him, the delay in 
 making demand is excused. But it is no excuse for want of 
 notice to the drawer or indorser.^^ 
 
 §391. When note is void, and indorser knows it. — Where 
 the note is void, as between the maker and payee, on account 
 of an illegal consideration, the indorser may be held with- 
 out any proof of demand or notice; and the general prin- 
 ciple is, that whenever the principal party is not bound, the 
 indorser is bound mthout demand or notice.^ The payee, 
 when he indorses the note, warrants, by the very act of in- 
 dorsement, that the maker is legally liable to pay it, know- 
 ing, as he necessarily must, that such is not the case. The 
 holder, in the belief of its truth, might look only to the 
 maker, and fail to take the usual steps to charge the in- 
 dorser; and if, when he became aware that the maker was 
 not legally bound, he could not recover against the indorser, 
 the latter would be protected by his own fraud, and the 
 holder suffer by the confidence placed in him. Thus, in 
 Massachusetts, where a note was void for usury between 
 maker and payee, and the holder failed in suit against the 
 maker on that account, it was held that he could hold the 
 indorser without any proof of demand or notice.^* Knowl- 
 edge of the infirmity rendering the instrument void, on the 
 part of the indorser, is considered by high authorities es- 
 sential to charge them without demand or notice — the 
 transaction amountine; in such case to a fraud. The de- 
 cisions on this subject, however, are not uniform.^ 
 
 2r. Chitty on TMlls [*43G, 437] : 1 Parsons on Notes and Bills, 444, 445. 
 20 Price v. Younj?, 1 McCord, 339. 
 
 27Bay]ey on P.ills, 205; 1 Parsons on Notes and Bills, 444, 445; Per- 
 kins V. White, Ohio S. C, January, 1881. 
 28Copp V. McDufrall. Mass. 1. 
 29 Daniel on Negotiable Instruments, §§ 1113a, ]U2h.
 
 § 392. CIKCUMSTANCES OF A SPKCIAL NATURE. 2G3 
 
 The principles herein announced with reference to in- 
 dorsers are equally ai)plicable to drawers of bills of ex- 
 change. 
 
 § 392. Impracticability of finding party — The want of 
 due presentment, or due notice, will be excused when the 
 holder, after exercising due diligence, cannot find the party 
 to whom presentment should be made or notice given, or 
 ascertain his place of residence or business. When this 
 excuse is relied upon, it becomes often a question of nicety 
 to determine whether or not the steps taken by the holder 
 to fiiid the party to whom presentment should be made or 
 notice given, or to ascertain his place of residence or busi- 
 ness, amounted to the due diligence which the law exacts, 
 and it is therefore important to define in what such diligence 
 consists.^" The burden of proving due diligence will be 
 upon him who is seeking to avail himself of that excuse.^^ 
 Due diligence in making presentment for payment, and in 
 communicating notice, consists, as a general rule, in mak- 
 ing inquiries of such accessible persons, as from their con- 
 nection with the transaction or place, or parties, are likely 
 to be informed and in acting in accordance with the in- 
 formation derived from them.^" The holder is not bound 
 to inquire further than a reasonable and prudent man should, 
 and every possible exertion is not exacted of him. In the 
 language of the Supreme Court of the United States, " It is 
 enough to send the notice to the place where the informa- 
 tion received reasonably requires him to send it. If the 
 place it reaches is the wrong one, it is not his (the holder's) 
 fault." ^^ It has been held that due diligence would neces- 
 sitate an inquiry by the holder of the indorser or other 
 party to the instrument, to ascertain the whereabouts of 
 the acceptor or maker.^'* 
 
 30 Story on Bills. § 351. 
 
 31 :Martin v. Grabinsky. 38 Mo. App. 359. 
 
 32 Lambert v. Ghisclin, 9 How. 452; Chapman v. Lipscombe, 1 Johns. 
 294. 
 
 33 Harris v. Robinson. 4 How. 33(5. 
 
 34\Yheeler v. Field. INIctc. (Mass.) 290; Orafton Bank v. Cox, 13 
 Gray, 505.
 
 264: EXCUSES FOR ^O-M'KESENTMENT, ETC. § 393. 
 
 §393. When place of business, or payment, closed; party- 
 absent from home, etc. — If the doors of the business office of 
 the acceptor or maker are closed, and there be no one there 
 to answer the demand after repeated calls, it has been held 
 by high authority that the bill or note may be protested 
 without making further inquiries; for he is bound to have 
 a suitable person there to answer inquiries and pay his bills 
 and notes, if there demanded.^^ Or if the holder, on the 
 day of maturity, finds the bank or other place of payment 
 closed, he is not bound to make any further demand to 
 charge either drawer or indorser.^*' If the paper is payable 
 at a certain bank that has ceased to exist, or at the counting- 
 room of a firm which has dissolved before its maturity, it 
 will certainly be sufficient to make presentment to the bank 
 which has succeeded the former institution, if such there 
 be, or at the counting-room of the succeeding firm, if such 
 there be.^^ 
 
 If the party to be notified is traveling, or is absent from 
 home for any reason, and his present address is known to 
 the holder, or if his absence from home is known, and the 
 holder has any means of learning his address, or of ascer- 
 taining whom he has left behind to attend to his business, 
 it would probably be his duty to send notice accordingly. 
 But if a party leaves home without taking the usual and 
 proper precautions to facilitate sending business communi- 
 cations to him, undoubtedly this is his fault, and he can re- 
 lieve himself from no responsibility by such fault, and will 
 bo held to all parties as if duly notified, provided due dili- 
 gence be used.'® 
 
 Inability to find the maker or acceptor does not excuse 
 want of notice to drawer or indorser; but inability to find 
 
 35Sulzbacher v. Bank of .Charleston, 80 Tenn. 201; Baumgarden v. 
 Reeves, 35 Pa. St. 250; 1 Parsons on Notes and Bills, 457. 
 
 3<!irine V. Allcly, 4 B. & Ad. 624; Central Bank v. Allen, 16 Me. 41; 
 Derg V. Abbott, 83 Pa. St. loS; Faulkner v. Faulkner, 73 Mo. 330. 
 
 3T Central Bank v. Allen, 16 Me. 41; Ptoberts v. Mason, 1 Ala. 373; 
 Sanderson v. Oakey, 14 La. 373. 
 
 38 Daniel on Negotiable Instruments, § 1122; 1 Parsons on Notes and 
 Bills, 493.
 
 §§ 394, 395. CIRCUMSTA^•CES of a special nature. 2G5 
 
 the drawer or indors^er, or ascertain liis whereabouts, after 
 exercising due diligi'iico, does excuse want of notice, 
 because it is then impossible."*''' But the holder must con- 
 tinue his inquiries from day to day, and give notice as soon 
 as ho does ascertain the party's whereabouts — the excuse 
 being coextensive only with the necessary delay; and the 
 im])e<liniont being only temporary, the duty revives with its 
 cessation. ^"^ 
 
 § 394. When instrument acquired too late to make de- 
 mand or give notice. — Where the payee, or subsequent in- 
 dorsee, does not transfer and indorse the bill or note until 
 so near its maturity that it is then impracticable on account 
 of the distance from, or inaccessibility to, the place where 
 the maker or acceptor has his place of business or residence, 
 or where the bill or note is payable, the payee, or other in- 
 dorser so transferring it, will be presumed to have waived 
 the taking of these steps which they must have known were 
 impossible. This excuse, however, will only avail as be- 
 tween the immediate parties who have transferred and re- 
 ceived the instrument at so late a ])orio(l; for as to the pre- 
 vious parties who transferred it long enough before maturity 
 to leave adequate time for its due presentment, they have 
 a right to insist on the strict performance of their obliga- 
 tions by those who are subsequent holders.^^ 
 
 § 395. Illness or death of holder. — When sudden illness or 
 death of, or accident to, the holder or his agent prevents 
 the presentment of the bill or note in due season, or the 
 communication of notice, the delay is excused, provided that 
 presentment is made and notice given as promptly after- 
 ward as the circumstances reasonaldy permit.'*^ This doc- 
 trine rests upon the same principle as that which excuse- 
 -want of punctuality when overwhelming calamities or acci- 
 
 ^ 1 Parsons on Notes and TMlls, ')21. 
 
 40 Daniel on Nejrotiable Instruments, § 1120. 
 
 41 Daniel on Negotiable Instruments, § 1124; 1 Parsons on Notes and 
 Pills, 4r)0; Story on Bills, § .320. 
 
 43 White V. Stoddard. 11 Gray. 258: Avmar v. Beers. 7 Cow. 7(K5; 
 Hilton V. Shepherd, 6 East, 16; Story on Bills, § 308.
 
 20G EXCUSES FOB ^'oxPKESE^'TME^"T, ETC. §§ 396, 307. 
 
 dents of a general nature prevent. The sudden illness or 
 death of his agent is on the same footing with that of the 
 holder himself,^^ If the excuse be illness, it must be of 
 such a character as to prevent due presentment and notice 
 by the exercise of due diligence.^* 
 
 § 396. Special circumstances arising from the conduct of 
 the party; when party has received funds with which to pay 
 instrument. — The receiving by the drawer or indorser of 
 money from the acceptor, maker, or other party for whose 
 benefit the bill or note was made, for the avowed purpose 
 of taking up the bill or note at its maturity, dispenses as 
 to such drawer or indorser with the necessity of a present- 
 ment to the acceptor or maker, for the obvious reason that 
 the indorser becomes himself the person who should meet 
 it. And so, recei^dng any other property, with the agree- 
 ment that he shall apply its proceeds to paying the bill or 
 note at its maturity, has the same effect.'*^ The indorser 
 in such cases has no remedy over against any one. His 
 arrangement -with his principal substitutes him in that 
 principal's place; and it would be a fraud for him to throw 
 back upon him the burden which he had assumed when pro- 
 vided ^vith the means to bear it.^*^ 
 
 In harmony with the principle just stated, it is well set- 
 tled that the receiving of security or indemnity by the in- 
 dorser from the maker or other party for whose benefit 
 the bill or note Avas executed will bind the indorser without 
 demand and notice. But in order to thus hold the indorser, 
 the security received must be full, or comprise all the 
 maker's estate.*^ 
 
 § 397. When maker or acceptor has absconded or removed 
 his domicile. — Wlien the maker or acceptor of the instrument 
 has actually absconded, and especially when he is notoriously 
 
 43Dugp:an V. King, Rice, 239; Pothicr de Change, note 144; Chitty 
 on T'.i'ls (131h Am. cd.), .500, note a; Story on Bills, § ,309. 
 
 44 Turner v. Tx-adi, Hilary Term, 1818; Chitty on Bills [*452], 509; 
 1 Parsons on Notes and Bills, 532. 
 
 4.5 Ray V. Smith, 17 Wall. 418; Wright v. Andrews, 70 Me. 86; Bond 
 V. Farnnam, 5 Mass. 170. 
 
 46 Daniel on Negotiable Instruments, § 1128. 
 
 4" Daniel on Negotiable Instruments, §§ 1129, 1130.
 
 § 397. CIRCUMSTANCES OF A SIMXIAL XATUUE. 207 
 
 insolvent, inquiries are unnecessary. Presentment to liim 
 personally is of course impossible, and presentment at his 
 last place of residence or business is altogether unneces- 
 sary. The mere fact of absconding is all that it is neces- 
 sary for the holder to show. This doctrine is well set- 
 tled in England, and by the current of American author- 
 ities.*® Even when he had absconded to another place 
 in the same State or country, the excuse for nonpresentment 
 would be sufficient, unless the holder knew where he was, 
 in which case he should seek him.*^ But the absconding 
 of the maker or acceptor furnishes no sufficient excuse 
 for want of notice to the drawer or indorser.^" AVhen the 
 drawer or indorser has himself absconded, notice should be 
 left at his last place of abode or with the person represent- 
 ing- his estate. ^^ If between the time a note is made or a 
 bill accepted and its maturity the maker or acceptor removes 
 from the place at which he resided and transacted business 
 to another State or country, no obligation is imposed upon 
 the holder to go out of his oa\ti State in order to make a 
 demand upon him personally, or at his new place of resi- 
 dence or business. It will be sufficient under such circum- 
 stances to make a demand at the payor's last place of resi- 
 dence or business, and when that has been done due diligence 
 requires no more.^^ But when the removal is to another 
 locality mthiu the same State or country, it is the duty of 
 the holder to seek and demand payment of the promisor 
 at his new place of residence or business.^^ 
 
 •iSBayley on Bills, 196; Chitty on Bills [*367], 412; Lehman v. Jones, 
 1 Watts & S. 126; Bruce v. Lytle, 13 Barb. 163; Gillespie v. Hannahan, 
 4 :McCord, 503. 
 
 40 Rcid V. Morrison. 2 Watts &. S. 401 ; Duncan v. McCullou-,'!!, 4 Serg. 
 & R. 480. 
 
 50 May V. Coffin, 4 Mass. 341. 
 
 61 Ex parte Rohde, Mont. & M. 430; 1 Parsons on Notes and Bills, 528. 
 
 "52McGruder v. Bank of Washington, 9 Wheat. 598; Adams v. Leland, 
 30 N. Y. 309; Central Bank v. Allen, 16 Me. 41. 
 
 53 Anderson v. Drake, 14 Johns. 114; Louisiana Ins. Co. v. Sham- 
 bursh, 7 Mart. (N. S.) 260.
 
 BOOK V. 
 
 ACTIONS AND DEFENSES. 
 
 CHAPTER XIY. 
 
 ACTIONS. 
 
 SECTION L 
 
 WHO MAY SUE. 
 
 § 398. Holder with legal title may sue. — Any holder of a 
 bill or note who can trace a clear legal title to it, is entitled 
 to sue upon it in his o\\ti name, whether he possesses the 
 beneficial interest in its contents or not.^ If the note be 
 payable to A. or B., it may be sued npon by them jointly 
 or by either one of them.^ If there be a special indorse- 
 ment, or assignment to a particular person, he is the proper 
 person to sue ; and if he is in possession he may sue although 
 his name be indorsed on the paper, after the special indorse- 
 ment or assignment. For in such case his indorsement will 
 bo presumed to be a mere memorandum, or evidence that 
 he had negotiated the paper and then taken it up.^ 
 
 Agents, receivers, assignees, trustees, or personal repre- 
 sentatives, may sue on a note or bill payable to bearer, or 
 indorsed in blank.* And the donee causa mortis of a note 
 payable to the donor's order may use the name of his per- 
 sonal representative, even against his protest.'' But a mere 
 
 1 Caldwell v. Lawrence, 84 Til. 161; Harpending v. Daniel, 80 Ky. 45G. 
 aWestgate v. Healy, 4 R. I. 524. 
 
 3 Humphreyville v. Culver, 73 111. 485. 
 
 4 Law V. Pamell, 7 C. 13. (N. S.) 282; Bowman v. Wood, 15 Mass. 5.34; 
 Haxtim V. Bishop. ,3 Wend. 13; Daniel on Negotiable Instruments, § 264; 
 2 Parsons on Notes and Bills, 446. 
 
 5 Grover v. Grover, 24 Pick. 261 ; Sessions v. Jlosely, 4 Gush. 87. 
 
 [268]
 
 ^ 399. WHO MAY SUE. 2H9 
 
 depositary of such a note cannot maintain suit.*"' If the 
 paper be indorsed specially to a particular j)er.son, none Init 
 such person or his representative can sue.^ A party for 
 accommodation who i)ays the bill may sue prior parties, but 
 not subsequent ones. If an acceptor or maker for accom- 
 modation pays the bill he cannot sue drawer or indorser 
 upon the bill, because, according to its terms, he is liable to 
 them. But lie may sue the accommodation party for money 
 paid at his request." 
 
 ij 399. Partnerships; joint parties. — If a bill or note be 
 made payable to, or indorsed specially to a firm, all the 
 partners must join in the- suit;" and if so payable or indorsed 
 to A. cV: Co., A. cannot recover unless he shows that he 
 alone composed the nominal firm.^^ If, in fact, he alone 
 composes the firm, the. title to the i)aper is in him, and no 
 indorsement is necessary to enable liim to maintain the suit.^^ 
 If one of the copartners of a firm should die, suit should 
 be brought by the surHvor or survivors ;^^ but if the paper 
 be indorsed in blank to a finn, either copartner may fill it 
 up in his own name and sue, even though one of the co- 
 partners be dead,^^ and if indorsed to one member of the 
 firm, it may be filled up and suit brought on it in the firm 
 name.^'* 
 
 A copartner cannot sue a firm of which he is a member, 
 upon a bill or note payable by it to himself, because he 
 would be in fact suing himself ;^^ but if a firm make its bill 
 or note payable to the order of a copartner, and the latter 
 
 G Shenvood v. Roys, 14 Pick. 172. 
 
 ■<■ Daniel on Negotiable Instruments, §§ 692, llSlCf. 
 
 8 Stark V. Alford, 49 Tex. 260. 
 
 » Guidon v. Robson, 2 Campb. 302. 
 
 lORobb V. 13ailey, 13 La. Ann. 457. 
 
 n Smith V. Ilanie, 74 Ga. 327. 
 
 12 Parsons on Partnership, 447. 
 
 iSLovell V. Evertson, 11 Johns. 52; Weaver v. Bromley, 65 ^lieh. 213. 
 
 l^Huteliinson v. Crane, 100 111. 272. 
 
 lf> Parsons on Partnership, 510, note.
 
 270 ACTIONS. § 400. 
 
 indorse it, the indorsee may sue.^*"' But if a note indorsed 
 by two of three payees to a third payee and a stranger be 
 subsequently indorsed by the third payee, the indorsee may 
 sue in his own name.^^ 
 
 Joint parties not partners must all unite in the action, 
 if living. On the death of one of them, the remedies for 
 collection survive to those living, Avho may lawfully receive 
 payment, and sue at law or in equity, as may be appropriate, 
 ■w-ithout uniting the personal representative of the deceased 
 joint party.^* It has been held that one of two joint owners 
 cannot maintain an action thereon in his own name, though 
 the note be payable to bearer and be in his possession.^^ 
 
 S 400. Married women. — On a bill or note aiven to a single 
 woman, who afterward marries, the husband must join her 
 in the action."*^ If she dies, the right of action is in her 
 personal representative, not in the husband. ^^ If the hus- 
 band dies, the right of action is in her, and not in the hus- 
 band's personal representative."^ So the right of action 
 survives to the wife, upon a note payable to husband and 
 wife, Avhen the husband dies, and does not pass to his repre- 
 sentative.^^ 
 
 On a bill or note made payable to a married woman 
 after marriage the husband may sue alone as payable to 
 him, or he may join in an action mtb his wife.^"* If pay- 
 able to the husband, or to his wife, in the alternative, he 
 should sue.^ 
 
 Tlie Avife cannot sue her husband on a note made by him 
 to her after marriage; nor on a joint and several note made 
 
 10 Thayer v. Buflfum, 11 Mete. (Mass.) 398; Davis v. Briggs, 39 Me. 
 304. 
 
 17 Goddard v. Lyman, 14 Pick. 268. 
 
 18 Lannay v. Wilson, 30 Md. 536 ; Allen v. Tate, 58 Miss. 586. 
 
 19 McNamee v. Carpenter, 56 Iowa, 276. 
 
 20 Sherrington v. Yates, 12 M. & W. 855. 
 
 21 Hart V. Stevens, & Q. B. 637. 
 
 22 stanwood v. Stanwood, 17 Mass. 57; Dean v. Richmond, 5 Pick. 461. 
 
 23 May V. Boisseau, 12 T^eigh, 512; Draper v. Jackson, 16 Mass. 480. 
 
 24 Burroughs v. Moss, 10 B. & C. 558; Philliskirk v. Pluckwell, 2 
 Maule & S. 393. 
 
 as Young V. Ward, 21 111. 223.
 
 §§401,402. WHO MAY i^UE. 271 
 
 to her by him and others;^" but in this rase if ho dies she 
 may sue the others/^ 
 
 It should be observed, however, that the rights of married 
 women, not only ^^^th reference to the acquisition of prop- 
 erty and her contractual powers, but with reference to her 
 right to sue, have been materially altered by remedial legis- 
 lation in the different States. 
 
 § 401. Cause of action indivisible. — It is a general prin- 
 ciple of law that a party cannot divide an entire demand 
 or cause of action, and maintain several suits for its re- 
 covery; and a recovery for part of an entire demand ^\'ill 
 bar an action for the remainder, if due at the time that the 
 first action was brought. What constitutes an entire or 
 sincle demand is often difficult to detennine. When a note 
 payable at a future day carries interest payable annually 
 or send-annually, the holder may, before its maturity, re- 
 cover the interest as it matures without barring an action 
 as to the principal or unaccrued interest."^ If the interest 
 be due by a coupon or other separate security, it can be 
 sued for as an independent cause of action.^** Whether 
 when the principle of a note, and its interest (not payable 
 by separate security), are both mature, separate actions may 
 be maintained, for each is controverted, some cases holding 
 that they are maintainable :^° others, the opposite.^* The 
 better opinion sustains the right to the separate actions. 
 
 §402. Agents. — Upon the theory that the party entitled 
 to sue is the one in whom the instrument shows the legal 
 title to exist, it has been held that, when the bill or note 
 is payable to a certain person by name, but describing him 
 as agent of another person also named — as, for instance, 
 "A. B., agent for C. D." — the suit must be brought in the 
 
 26 Sweat V. Hall, 8 Vt. 187 : Richards v. Richards, 2 B. & Ad. 447. 
 
 27 Richards v. Richards, 2 B. & Ad. 447. 
 
 28 Walker v. Kimble, 22 111. 537; Goodman v. Goodman, 65 111. 407. 
 
 29 Daniel on Negotiable Instruments, § 1500 et seq. 
 
 sOAndover Sav. Bank v. Adams, 1 Allen, 28; Sparhawk v. Willis, 6 
 Gray, 163. 
 
 31 Howe V. Bradley, 19 Me. 31 ; Parsons on Contracts, Vol. II. p. 036.
 
 272 ACTIONS. § 403. 
 
 name of the agent, and cannot be brought in the name of 
 the principal;^" and that a fortiori must the suit be so 
 brought when the instrument is simply payable to "A. B., 
 agent," no principal being named.^^ But in either case, the 
 better doctrine, as it seems to us, is that either the agent 
 or the principal might sue. If suit were brought by the 
 agent, the possession conforming to the express indication of 
 the paper would clearly sustain the action. If suit were 
 brought by the principal whose name is expressed in the 
 instiiiment, possession by him would be evidence that he had 
 received from his agent the instrument of which he was en- 
 titled to the beneficial interest; and there could be no good 
 reason why it should be necessary for the principal to con- 
 tinue to use his agent's name, when it is clear from the face 
 of the paper that if so used it would be as the representa- 
 tive of his o^vn.^* And where the principal is undisclosed 
 on the face of the paper, he might also sue in his own name ; 
 but in such case mere possession of the paper would not 
 be sufficient evidence that he was the principal intended, 
 and it would be necessary for him to supply that element 
 in his title to recover by parol proof.^^ In the case of in- 
 struments payable to bank cashiers it might be different. 
 Delivery of a note to an agent without indorsement would 
 not authorize him to sue.^^ The same principles apply to 
 agents of coi^porations, public and private. 
 
 § 403. When payable to bearer. — The law is now too well 
 settled to admit of longer controversy that an action on a 
 bill or note payable to bearer, or indorsed in blank, may be 
 maintained in the name of the nominal holder who is not 
 the owner by the owner's consent; and that possession by 
 such nominal holder is 'prima facie sufficient evidence of 
 his right to sue, and cannot be rebutted by proof that he 
 has no beneficial interest, or by anything else but proof of 
 
 32 Cocke V. Dickens, 4 Yerg. 29 ; Shepherd v. Evans, 9 Ind. 2G0. 
 
 33 Alston V. Hartman, 2 Ala. 099; Ilorah v. Lonjr, 4 Dev. & Bat. 274. 
 
 34 Fail-child v. Adams. IG Pick. 383; Johnson v. Catlin, 27 Vt. 87. 
 
 35 Rutland, etc., E. Co. v. Cole, 24 Vt. 38. 
 
 36 Nichols V. Gross, 20 Ohio St. 425.
 
 g 404. W1I<> MAV SLK. 273 
 
 mala fides.^"^ If it were shown that the pLaintifF, upon suing: 
 upon a note payable to hearer or indorsed in Uank, has no 
 interest in it, and in addition that he is suing against the 
 will of the party beneticially interested, he could not re- 
 cover, as liis conduct would he in bad faith. •'^'^ It matters 
 not that such nominal holder will receive the amount as 
 trustee, agent, or pledgee.^'-* The suit by him holding the 
 paper shows his title to recover; and it cannot matter to 
 the defendant who discharges the debt that the plaintiff is 
 accountable over to a third party. Evidence, however, that 
 the plaintiff has no interest in the instrument vnll be com- 
 petent when foundation has been laid for its introduction 
 by offer to prove offset, or other defense, available against 
 a third person who is its true owner."*"* And if the indorse- 
 ment be expressed " for collection," it has been held that 
 the indorsee is not such a holder as may sue.^^ But in 
 England it has been held that if the plaintiff has neither an 
 interest in the instrument or right of possession at the time 
 suit is brought, he cannot maintain the suit ;^ and this view 
 has been upheld in ISTew York under the provision of the 
 code of that State which requires the real party in interest 
 to sue.^^ 
 
 It should be noted, however, that an indorsement in blank 
 by the payee will not affect his right to sue upon a note pay- 
 able to his order wdiile it remains in his hands."" 
 
 § 404. Rights of holder under a blank indorsement. — The 
 holder of a note blank as to the payee may fill it up with 
 his ovm name and sue upon it."*^ If payable to a fictitious 
 
 :i7Demuth v. Cutler, 50 Me. 300; Rubelinan v. McNichol, 13 Mo. App. 
 .584. 
 
 38 Tonne v. Wasson, 128 Mass. 517. 
 
 39 Nicolay v. Fritschle, 40 Mo. G7; King v. Fleece, 7 Heisk. G7; Bow- 
 man V. Wood, 15 Mass. 534. 
 
 40 Logan v. Cassell, 88 Pa. St. 200. 
 
 41 Rock County Nat. Bank v. llollister, 21 Minn. 385. 
 
 42 Enimett v. Tattenham, 8 Kxch. 884. 
 
 43 Hays V. Hathorn. 74 N. Y. 48(5. 
 
 44 Kerriok v. Stevens, 58 Mich. 297. 
 
 45 Ciutchloy V. narcnce, 2 Manic & S. 90. 
 
 18
 
 274 ACTIONS. § 405. 
 
 person, it may be sued on as payable to bearer,'*'' The holder 
 of such a paper, iu transferring it, should not use the fic- 
 titious name, but pass it by deliveiy only, or by indorse- 
 ment,'*^ and even after the trial, where judgment has gone 
 for the plaintiff under the impression that the indorsement 
 had been filled up, the correction being made nunc pro tunc.'^^ 
 
 But the filling up of the blank indorsement is formal 
 merely, and it is not necessary that it should be filled up at 
 all, for the mere act of suing upon it by the holder evi- 
 dences his intention to treat the indorser as a transferrer 
 and indorser to himself.^^ And if the plaintiff omit to 
 state in his declaration all the indorsements after the first 
 indorsement in blank, he may strike out the intervening 
 indorsements, and aver that the first blank indorser indorsed 
 immediately to himself.'^^ 
 
 § 405. When indorsement is in full. — If the bill or note be 
 not payable to bearer or indorsed in blank, or indorsed 
 specially to himself, the holder cannot (unless authorized 
 by statute) sue in liis own name, for although he may pos- 
 sess the entire beneficial interest, the legal title is still out- 
 standing in his transferrer, and he must use his name 
 in order to maintain the suit.^^ By leaving the instrmnent 
 unindorsed, the transferrer necessitates and authorizes the 
 use of his name to the recoveiy of the amount; and he 
 cannot object to its use, or release the action when insti- 
 tuted.^^ If the transferrer indorses the paper, then his 
 name cannot be used save by his own consent; for then 
 the legal title and right to sue is vested in his indorsee.^^ 
 
 46 2 Parsons on Notes and Bills, 448. 
 
 47 Maniort v. Roberts, 4 E. D. Smith, 83. 
 48Whittier v. Hayden, 9 Allen, 408. 
 
 49Ree3 V. Conococheagne Bank, 5 Rand. 329; Poorman v. Mills, 35 
 Cal. 118. 
 
 50 Rand V. Dovey, 83 Pa. St. 281; Merz v. Kaiser, 20 La. Ann. 379; 
 Byles on Bills [*149], 268. 
 
 51 Allen V. Newbury, 8 Iowa, 65 ; Robinson v. Wilkinson, 38 Mich. 
 301 ; Marsh v. Hayford, 80 Me. 97. 
 
 52Paese v. Hirst, 10 B. & C. 123; Amherst Academy v. Cowles, ft 
 Pick. 427; Royce v. Nye, .')2 Vt. 372. 
 
 53 Bowie V. Duval, 1 Gill & J. 175; Mosher v. Allen, IG Mass. 451.
 
 §§ 400, 407. WHO may hk sukd, 275 
 
 But if suit is commenced ^vitllo^t his consent, he may sub- 
 sequently assent to it.''* 
 
 § 406. Possession prima facie evidence of ownership. — Pos- 
 session is in itself prima facie evidence of the right of the 
 party to sue and receive the money when he holds under 
 a legal title, and also that the title, although not expressly, 
 is actually vested in him. And therefore in order to de- 
 feat his suit, it must be shown that he is a ?nala fide holder. ^'^ 
 As said in a Maryland case by Chambers, J.: "A bill pay- 
 able to bearer, or a l>ill payable to order and indorsed in 
 blank, will pass by delivery, and bare possession is prima 
 facie evidence of title; and for that reason possession of 
 such a bill would entitle the holder to sue." '"'*' And pos- 
 session of the note or bill is prima facie evidence that the 
 same was indorsed by the person by whom it purjDorts to 
 be indorsed ;^^ and production at the trial is prima facie 
 evidence that it remains unpaid. But possession of the in- 
 strument is not always necessary in order to institute a suit. 
 If the holder has indorsed a note in blank and pledged it 
 as collateral security, he may negotiate it to a third person, 
 while still pledged, and such person may sue as indorsee 
 while it is still in pledge, and maintain an action by dis- 
 charging the lien and producing the note at the trial. ^* 
 
 SECTION II. 
 
 WHO -MAY BE SUED. 
 
 § 407. General principles. — xVs a general rule, the holder 
 may sue all the prior })arties on the bill or note, but not 
 any subsequent ]iarty. Thus a payee may sue the acceptor 
 or maker. An indorsee may sue the acceptor or maker, 
 and all prior indorsers. At common law the holder might 
 commence and prosecute several actions against each of the 
 
 54rToldcr V. Foss, 43 Me. 364. 
 
 csWhooler v. Johnson, 97 Mass. 39; Wilson Sewing Machine Co. v. 
 Spears, 50 Mich. 534; Union Nat. Bank v. Barber, 56 Iowa, 562. 
 WJWhiteford v. Burckniyer. 1 (;i!l, 127. 
 f>7 Bank v. Italian. 37 Minn. 404. 
 58 Fisher v. Bradford, 7 Grcenl. 28.
 
 276 ACTIONS. §g 408, 409. 
 
 prior parties at the same time; and an action instituted 
 against one woidd not preclude any other remedy against 
 the others. ^^ But satisfaction by any one would discharge 
 all to the plaintiff from liability as to principal sum.*^ 
 Where a party was liable in the two characters of joint 
 drawer and of acceptor, he might be sued jointly ^^dth the 
 other drawers and separately as acceptor."^ 
 
 But by statute in many of the States an action may be 
 maintained and judgment given jointly against all the par- 
 ties to a negotiable instrument, whether drawers, indorsers, 
 or acceptors, or against any one, or any intermediate num- 
 ber of them. 
 
 § 408. When indorser can sue acceptor or maker. — The in- 
 dorser of a bill or note cannot sue the acceptor or maker 
 until he has paid or satisfied it. But as soon as he does 
 this he may sue the acceptor or maker.*^^ And if one in- 
 dorser sues a prior party, it is not necessary for him to 
 show that he had received notice, provided it was duly re- 
 ceived by such prior party.^^ Where there are a number 
 of indorsers, any one may sue, by arrangement between 
 them, all indorsements subsequent to his being stricken out.^ 
 
 § 409. When drawer can sue acceptor and vice versa. — 
 " The drawer," says Mr. Chitty, " may maintain an action 
 on the bill against the acceptor, in case of a refusal to pay 
 a bill already accepted, but not on a refusal to accept, in 
 which latter case the action must be special on the contract 
 to accept." ^^ Certainly the drawer may sue the acceptor 
 if he has had to pay the bill, or may leave it in the hands 
 of the indorsee to sue for his benefit;^*' but it has been held 
 
 59 Chitty on Bills [*538, 539], 610, 611; Williams v. Jones, 79 Ala. 110. 
 GO Ex parte Wildman. 2 Ve.s. Pr. 115; Farwell v. Hilliard, 3 N. H. 318. 
 €1 Wise V. Prowse, 9 Price, 393. 
 
 62Hoyt V. Wilkinson, 10 Pick. 31; McDonald v. Ma^nider, 3 Pet. 470. 
 €.3 Ellsworth V. Brewer, 11 Pick. 316. 
 
 64 Walwyn v. St. Quintin, 1 Bos. & P. 652. 
 
 65 Chitty on Bills [*537], 608. 
 
 6CIx>uvicre v. Laubray, 10 i\Tod. 36; Thurman v. Van Brunt, 19 Barb. 
 410; Williams v. James, 15 Ad. & El. (N. S.) 69.
 
 § 410. WllKN KIGIIT OK ACTION ACCRUES. 277 
 
 that be cauuot recover without evidence that he has j)ai<l 
 the bill.*^"' 
 
 AVhero the acceptance is for the drawer's accommoda- 
 tion, and the acceptor pays the bill, he cannot sue the 
 drawer upon the bill, for it imports no liability to him, but 
 he nuiy sue for money paid at his recpiest.*''^ But an acceptor 
 for honor of the drawer or indorser may sue such drawer or 
 indorser upon the bill itself.*'^ 
 
 SECTION III. 
 
 WHEN RIOUT OF ACTION ACCRUES. 
 
 § 410. Can suit be instituted on day of maturity? — While 
 the courts arc at war with each otlier on this subject, it 
 may be confidently and fairly announced that the better 
 view is that after demand and refusal on the last day of 
 grace, action may be commenced aiiainst the maker. ^*^ But 
 in the ease of non-negotiable contracts to be performed 
 upon a certain day, they are really solvable Avithiu that 
 day; and as the promisor has the whole of the day for their 
 performance, suit cannot be commenced until that day has 
 passed.'^^ But when the maker of a note, or the drawer or 
 acceptor of a bill, makes it payable on a day certain, his 
 contract is to pay it on demand on any part of that day, 
 if made %dthin reasonable hours.^" The protest must be 
 made on that day, which presupposes a default already 
 made; and whether it be the last day of grace, or the day 
 of maturity, when there is no grace, it is clear, upon prin- 
 
 fiT Thompson v. Flower, 1 Mart. N. S. (La.) ."^Ol ; 2 Parsons on Notes 
 ami Bills, 453. 
 
 68 Bell V. Xonvood, 7 La. 9.5; Stark v. Alford, 49 Tex. 260. 
 
 69 2 Parsons on Notes and Bills, 45!). 
 
 TO'Daniol on Notrotiable Tnstnmionts, § 1-207: 2 Parsons on Notos and 
 Bills, 4(il, 4fi2: Staples v. Franklin Bank, 1 Mete. (Mass.) 43; Leftly v. 
 Mills. 4 T. B. 170. 
 
 71 Webb V. Fairnianer, 3 :NL & W. 473 ; Coleman v. Ewing, 4 Humphr. 
 241. 
 
 72 Leftly V. :Mills, 4 T. R. 170; Greeley v. Thurston, 4 Grcenl. 479; 
 Chitty on Bills [MSI], 544.
 
 278 ACTioxs. §§ 411, 412. 
 
 ciple, that as soon as iDajment is refused, the action may 
 be commenced. The Wew announced in the text is clearly 
 stated by the Supreme Court of Massachusetts (Chief Jus- 
 tice Shaw delivering the opinion): " The rule in regard to 
 notes like the one in question is, that the note is payable 
 at any time, on actual demand, on the last day of grace; 
 and if such actual presentment and demand is so made, and 
 payment is not made, tlie maker is in default, and notice of 
 dishonor may forthwith be given to the indorser. But if 
 no presentment or demand is made by the holder upon the 
 maker, the latter is not in default until the end of the busi- 
 ness dav." '^^ 
 
 §411. Due-bills. — A due-bill, which is regarded in many 
 States as a promissory note, is payable immediately, and 
 upon principle there is no doubt, we think, that in such 
 States action may be brought immediately on the very day 
 of its date. The due-bill is predicated upon, and evi- 
 dences the fact that the debt is then due — not to be due 
 on that day (which in ordinary contracts means the same 
 as within that day), nor to be due in business hours of that 
 day if demanded, as is the case with respect to negotiable 
 paper which has a period of time to mature. It is true 
 that the due-bill could not be sued upon during that frac- 
 tional part of the day preceding its making; but it does not 
 follow that during the remainder of the day it is not mature 
 for suit. For its very language and nature purport that 
 it is instantly due; and as a breach of contract occurs by 
 failure to pay it instantly, the creditor may sue instantly, 
 indulgence for any time being mere matter of his discre- 
 tion and pleasure. This view is sustained by well-considered 
 authorities,'^* though not without dissent. 
 
 § 412. Action lies against indorser as soon as notice is put 
 
 in train of transmission In respect to the indorser, it has 
 
 been held in a number of cases that suit against him can- 
 not be commenced until time has elapsed for notice to be 
 
 . 73 Pierce v. Gate, 12 Ciish. 190. 
 
 '74Cammer v. TIarripon, 2 Mc>Cord, 240; Dews v. Eastham, 2 Yerg. 
 403; Hill v. Henry, 17 Ohio, f); Daniel on Negotiable Instruments, § 1211.
 
 § 413. WHEN lilGlIT OF ACTION ACCRUES. 279 
 
 actually received by him, upon the theory' that the holder's 
 title is not complete until the indorser is actually notified 
 that he is looked to for payment, or at least that time for 
 him to receive such notice has transpired."^ But this is a 
 misconception, as we tliink, of the law of notice. The 
 holder must exercise due dilii:;cnce to give the indorser no- 
 tice. That duty is fulfilled when he puts it in train to reach 
 him, by sending it to his business or dwelling-house, or 
 depositing it in the post-office, as the case may be. And for 
 him to be delayed until time for its actual reception had 
 gone by would subject him to the hazards, vexations, and 
 uncertainties of various circumstances which do not legi- 
 timately enter into the consideration of the indorser's 
 liability.''^ 
 
 But in suits commenced on the last day of grace against 
 an indorser, the plaintiff must prove that before the wrir 
 was sued out notice was deposited in the post-office, when he 
 lives in a different place, or sent to his residence or place of 
 business when he lives in the same.'' If the notice precedes 
 the suit ever so short a time, it suffices ;'^^ but if it does not, 
 it seems the irregularity cannot be cured by the sending 
 and reception of notice afterward. ^^ 
 
 § 413. Action upon dishonor for nonacceptance. — When a 
 bill is dishonored for nonacceptance, right of action accrues 
 at once against the drawer, and also against the indorsers 
 as soon as the protest is made and notice ])ut in train to 
 reach the party, without waiting for the maturity of the 
 bill.^" And if a note be payable in respect to principal or 
 interest, in instalments, action will lie for each instalment 
 as it falls due.**^ 
 
 "•> Smith V. Bank of Washington. 5 Serg. & R. 318; Wiggle v. Thomas- 
 son, 11 Smedes & M. 452; McFarland v. Pico, 8 Cal. 020. 
 
 76Shedd V. Brett, 1 Pick. 401; Dennie v. Walker, 7 X. H. 201. 
 Ti Manchester Bank v. Fellows, 8 Post. 302. 
 
 78 X. E. Bank v. Lewis, 2 Pick. 125. 
 
 79 X. K. Bank v. Lewis, 2 Pick. 113: Stanton v. Blossom, 14 Mass. 116. 
 
 80 Robinson v. Ames, 20 Johns. 14G; Lenox v. Cook, S ^lass. 400; 
 Ballingalls v. Gloster, 3 East, 481. 
 
 81 Tucker v. Randall, 2 Mass. 283; Cooley v. Rose, 3 Mass. 221.
 
 2S0 ACTIONS. §§ 414, 415. 
 
 SECTION IV. 
 
 WHEX RIGHT OF ACTION EXPIRES. 
 
 § 414. Origin of Statute of Limitations. — At common law, 
 when once a right of action accrued, it was immortah But 
 the disadvantages of permitting remedies to be sought at 
 remote periods from the time the transactions occurred, 
 and the desirability of having settlements while evidence 
 Avas readily obtainable, led at an early date to the adoption 
 of statutes fixing a limitation to actions. As early as 1270 
 an act was passed relating to limitation of actions concern- 
 ing real estate ; but personal property, and especially choses 
 in action, were at that time of so little consequence that 
 no limitation of personal actions was prescribed until 1623. 
 In this modern period, choses in action constitute a vast por- 
 tion of the property of the country, and the time at which 
 the right to reduce them into possession expires is a matter 
 of prime importance. It is to be observed, in the first place^ 
 that statutes of limitation do not destroy the debt, but only 
 bar the remedy. Therefore they must be specially pleaded, 
 and cannot be given in evidence under a general issue.^^ 
 And as they do not enter into the essence of the contract, 
 they must he regulated entirely by the laws of the country 
 where suit is brought,*^ 
 
 § 415. When Statute of Limitations begins to run. — The 
 statute of limitations begins to nm from the very day the 
 right of action accrues. Thus upon a bill or note payable 
 at so many days from the date, it begins to run from the 
 day of payment, and not from the day of date, but the 
 day of maturity is excluded in the computation of time. 
 If payable at sight, the statute runs from sight. If so 
 many days after sight, or after certain events, then from 
 the time named after sight, or after the events have hap- 
 pened.** If the instrument be payable on demand, the 
 
 82 Chappie V. Diirston, 1 C. & J. 1. 
 
 8^ Daniel on Negotiable Instruments, § 884. 
 
 84Byles on Bills [*331], 499.
 
 § 415. WIIKN iiKiJlT OK ACTION EXl'lUES. 281 
 
 statute begins to run immediately as payment might be 
 immediately demanded, or suit brought without any pre- 
 vious demand.**^ "On denumd nftor date" is the same as 
 on demand.^" But if payable at a certain time after demand, 
 or after notice, an actual demand must be made, or notice 
 given, in order to fix the period of maturity when the stat- 
 ute commences." When right of action on the instrument 
 secured ex})ircs, all claim to enforce the security which is 
 a mere incident of the principal obligation, expires with it.^ 
 The indorsement of an overdue note is a new contract, and 
 the statute begins to run in favor of the indorser from the 
 date of the indorsement.^^ 
 
 85 Mills V. Davis, 113 N. Y. 243; Mobile Sav. Bank v. McDonnell, 83 
 Ala. 597. 
 
 86Fenno v. Gay, 140 :Mass. US; Crim v. Starkweather, 88 N. Y. 339. 
 
 87 Little V. Blunt, 9 Pick. 488; Massie v. Byrd, 87 Ala. G81; Clayton 
 V. Gosling, 5 B. & C. 3G0. 
 
 88 City of Fort Scott v. Schulenberg, 22 Kan. 658. 
 
 89 Graham v. Roliertson, 79 Ga. 72. For more elaborate discussion of 
 the Statute of Limitations, see post, §§ 481, 482.
 
 CHAPTER XY. 
 
 DEFENSES. 
 
 § 416. Classification. — The defenses that may be inter- 
 posed to an action upon a negotiable contract may be 
 grouped or arranged into five classes: (1) That the defend- 
 ant did not make the instrument ; (2) that the contract sued 
 upon is in law nonenf orceable ; (3) that the plaintiff is not 
 entitled to sue thereon; (4) that the obligation created has 
 been discharged; (5) that the action upon the instrument 
 is barred by the statute of limitations. 
 
 § 417. Classification elaborated. — Under the first head, to 
 wit, the defendant did not make the instrument, will be 
 discussed and disposed of: (a) Forgery; (&) material al- 
 terations. Under the second, to wit, that the contract sued 
 upon is in law nonenf orceable : (a) Incapacity of the 
 party; (h) want, failure, or illegality of consideration; (c) 
 that the paper was obtained by fraud; (d) that it was ob- 
 tained by duress. Under the third, to wit, that the plaintiff 
 is not entitled to sue: That the legal title to the instrument 
 is not vested in the plaintiff. Under the fourth, to wit, that 
 the obligation created has been discharged: (a) By pay- 
 ment; (b) by bankruptcy, or assignment under insolvent 
 laws; (c) by accord and satisfaction; (d) by release; (e) by- 
 covenant not to sue ; (/) by substitution of another obligation ; 
 (g) by set-off; (h) under what circumstances a surety or 
 guarantor is discharged when the principal is not. Under 
 the fifth, that the action upon the instrument is barred by 
 the statute of limitations. 
 
 It will be seen that manv of the defenses enumerated in 
 this classification have been elaborately treated and disposed 
 of in other portions of this volume, and they are mentioned 
 here for the sole purpose of enabling the student to prop- 
 erly appreciate the place they occupy in a treatise on the 
 subject of defense. 
 
 [382]
 
 g§ 418, 41U. i>j:;iE.\L»AM' mu aut maki; iNJsTiaMKNT. 2bl» 
 
 SEOTIOX T. 
 
 THE DEFENDANT DID NOT MAKE THE INSTRUMENT. 
 
 § 418. Forgery. — Forgery is the counterfeit making or 
 altering of any writing with the intent to defraud. The 
 most usual species of forgery is fraudulently writing the 
 name of an existing person; but where one is in possession 
 of a paper containing a genuine signature, and fraudulently 
 fills it up so as to make it appear to be signed as maker, or 
 indorser, or other party to a bill or note, it is as much a for- 
 gery as if the signature itself had been forged.^ So where 
 one has authority to fill up a bill or note in blank, with a 
 particular sum, and he fraudidently inserts a larger sum, 
 it is as much a foruerv as if he had acted without anv au- 
 thority at all." 
 
 § 419. Illustrations of forgery. — Passing a note signed by 
 one person in his own name, as the note of another person 
 of the same name, if done with intent to defraud, is a for- 
 gery;^ and so appending to one's own name a false addition 
 of description, as by residence or occupation, of another 
 person of the same name; or indorsing a note by another 
 person of the same name Anth the real payee, or special 
 indorser.* So, one who, with intcMit fraudulently to utter 
 a promissory note as the note of a person other than the 
 signer, procures to it the signature of an innocent party, 
 who does not thereby intend to bind himself, is guilty of 
 forgery.'* But where a person falsely represents himself to 
 be the indorser of a bill, but writes nothing falsely himself, 
 if there be a real person who did indorse the bill in his own 
 proper name, the offense va]\ not be forgery, but obtaining 
 
 1 Rex V. Hales, 17 St. Trials. IGl : Powell v. Commonwealth. IT Gratt. 
 822. 
 
 2Repina v. Wilson, 17 L. J. M. C. R2: Eex v. Hart. 7 Car. & P. 0.52. 
 
 3 Rex V. Parke, 2 Leach Cr. L. 614. 
 
 4 Rex V. Webb, Russ & R. C. C. 72: Rex v. Rogers, 8 Car. & P. G20; 
 Mead v. Young, 4 T. R. 28. 
 
 5 Commonwealth v. Foster, li4 Mass. 311.
 
 1^64 DEFKXSEs. §§420, 4:il. 
 
 goods or money upon false pretences.^ And so as to any 
 otlier genuine signature, though it be passed for another; 
 yet if there be nothing upon the bill or note to apply it to 
 that person, it is not a forgery.''^ 
 
 The signature of a fictitious name or firm, if made with 
 intent to defraud, constitutes forgery. Thus uttering a 
 forged order for the payment of money, signed " Et. 
 Venest," there being no such person in existence, is a for- 
 gery. So indorsing a bill in the fictitious name of '' John 
 Williams." « 
 
 § 420. Alteration is forgery. — The alteration of a com- 
 pleted instrument, by a material change in its terms, with 
 intent to defraud, is as plain a forgery as the making of it 
 altogether; for it fraudulently assumes to bind the parties 
 to a contract to which their consent is wanting.** Thus, 
 where a clerk broke the seal of a letter, and altered a check 
 which it contained to a larger amount, it was deemed a for- 
 gery ;^*^ and so any fraudulent material change in the terms 
 of the paper, w^hether in amount, place of payment, or time 
 of payment. ^^ The making of the bill or note must be 
 counterfeit and false in order to amount to a forgery, and 
 if real, though fraudulently procured, it will be a fraud, 
 but not a forgery. Thus, where a person writes a note for 
 a certain sum, and procures another to sign it as maker, 
 under the false representation that it is for a smaller sum, 
 it is not a forgery. ^^ 
 
 § 421. Intent to defraud, and " uttering," essential. — An 
 intent to defraud is essential to constitute forgery, and al- 
 though a bill or note will not be binding upon those whom 
 
 CHevey's Case, 1 T^ach, 229; Chitty on Bills [*780]. 
 TChitty on Bills [*782]. 
 
 8 Commomvealth v. Chandler, Thatcher Crim. Cas. 187; Chitty on 
 Bills [*7S21; Lockett's Case, 1 Leach, 94; Taft's Case, 1 Leach, 172. 
 
 9 Wheelock v. Freeman, 13 Pick. 1G5. 
 
 10 Belknap v. National Bank, 100 Mass. 379. 
 
 11 Rex V. Post, Buss. & R. 101; Rex v. Treble, 2 Taunt. 328; Rex v. 
 Atkinson, 7 Car. & P. CGO. 
 
 12 Commonwealth v. ^ankey, 22 Pa. St. 390; People v. Getchell, ft 
 Mich. 496.
 
 § 422. JJEi'■K^• DA-NT inL' -NOT -MAKK I.NSTULMKNT 285 
 
 it purports to hi ml if their names have been signed to it, 
 or it has been altered without authority, the party who ha^ 
 ignorantly or innocently executed or altei-ed it under a 
 supposed authority, will not be deemed guilty of a forgery.^^ 
 Kor will the mere imitation of another's writing, the as- 
 sumption of a name, or the alteration of a written instru- 
 ment, where no person can be injured thereby, amount to 
 forgery." 
 
 The delivery of a bill or note, or other written contract, 
 is necessary to its validity; and so the "uttering," which 
 is the tenn used to describe the delivery by a forger or 
 counterfeiter to some person of the forged instrument, is 
 necessary in order to complete the crime of forgery. Giving 
 the bill or note to a confederate to utter is an uttering 
 thereof.^'' 
 
 § 422. Adopting of forged signature. — If one's signature io 
 forged, it is, as a general rule, a mere nullity as to him. 
 It is legally accurate to say that he did not make the in- 
 strument. But if the person whose signature has been 
 forged pronounces it genuine, or the instrument valid, the 
 question arises whether or not such declaration renders him 
 liable as if he were a party to a genuine instrument; and 
 a variety of circumstances affect its just solution. 
 
 In the first place, when third parties buy the paper on Lis 
 assurances or representations of the genuineness of his 
 signature, or of the validity of the instrument, or are in- 
 duced to act upon such assurances or representations, and 
 would suffer loss if he were permitted to set up forgery as a 
 defense, it is quite clear upon principles of estoppel that 
 such defense cannot be made.^" 
 
 In the second place, if no princi])le of estoppel applies, 
 and if through mistake a party states that a signature is 
 genuine, and afterward he discovers his error, and speedily 
 
 13 Roscoe's Cr. Ev. .505. 
 i4Chitty on Bills [*78.'j]. 
 IS Rex V. Palmer, Russ. & R. C. C. 72. 
 
 10 Workman v. Wright, 33 Ohio St. 405; Woodruff v. IMonroe, 33 Md. 
 158; Beeman v. Dmk, 11 M. & W. 2.-)!.
 
 286 DEFENSES. §§ 423, 424. 
 
 corrects it, and before the holder has changed his rcLation 
 to the paper, or anyone has dealt A\dth it upon the faith of 
 his admission, forgery can be successfully pleaded." 
 
 In the third place, it may be stated that where the party, 
 knowing his signature to be a forgery, deliberately and 
 understandingly adopts it as his own, he would be bound, 
 because ratification thus made is equivalent to a previous 
 authority, provided, however, that an innocent third party 
 has been induced to act upon the faith of the adoption in 
 such a way as to suffer loss by its repudiation. This is 
 based upon the familiar principles of estoppel. But whether 
 such deliberate adoption of a forgery, wdthout the conse- 
 quent loss to a third party, acting on the faith thereof, 
 would be binding is a mooted question, both in England and 
 America. ^^ 
 
 § 423. When one party is estopped to deny the genuineness 
 of another's signature. — The relation of one party to a nego- 
 tiable instrument is often such that he cannot deny the 
 genuineness of another's signature, for, having treated it 
 himself as genuine, it w^ould be a fraud to permit him to 
 assert the contrary. 'Having issued or transferred the in- 
 strument as genuine in all respects, he would not only be 
 bound by his guaranty that it is genuine, but it would be 
 unjust to and fraudulent upon others to permit him to 
 deny it; and proof of his having so issued or used it would 
 be sufficient to entitle the holder to recover against him.^® 
 
 § 424. The position of drawer, indorser, drawee, acceptor, 
 and transferrer in this respect. — The position of the drawer 
 of a bill before acceptance, in his relation to other parties, 
 is ordinarily that of the maker of a note. If he issues the 
 bill, as is generally the case, without any other name upon 
 it but his own, he cannot be made responsible for the sub- 
 sequent forgery of an indorsement or acceptance; and if 
 
 17 Daniel on Negotiable Instruments, § 1352; Woodruff v. Monroe, 33 
 Md. 158. 
 
 18 Daniel on Nef,'otiable Instruments, §§ 1352ff, 1352?>, and cases cited. 
 lOHortsman v. ITcnshaw, 11 TTow. 177; Meacher v. Fort, 3 Hill (S. C.) 
 
 227; AUeman v. Wheeler, 101 Ind. 144.
 
 § 424. DEFENDANT i>H) AOT MAKE INSTRUMENT. 287 
 
 the name of the payee to whose order the bill is payable, 
 or of a special indorsee, be forged, no recovery can be had 
 against him.^' IJJut if the drawer puts the lill in circula- 
 tion with the name of the payee imhjrsed upon it, he will 
 be understood, by so doing, as athrmiug that tlie indorsement 
 is in the handwriting of the payee, or written by his au- 
 thority.^^ In respect to the drawee or acceptor of a bill, 
 it is obvious that his relation to the instnmient is very 
 diil'erent from that of the parties who issued it. lie should 
 know his own correspondent's handwriting; and therefore 
 the doctrine is laid down by numerous authorities that if 
 he accepts the bill, or pays it, he cannot afterwartl, on dis- 
 covering that the signature of the drawer was a forgery, 
 revoke the acceptance, or recover back the amount paid 
 under mistake from the holder to whom he paid it.^^ 
 
 In respect to the indorser of a negotial)le instrument 
 upon which the name of the drawer, maker, acceptor, or 
 of a prior indorser is forged, he, by indorsing it, warrants 
 that he has clear legal title thereto, and that- the. instrument 
 is the genuine article it purports to be, and he is, there- 
 fore, bound by his indorsement to all parties subsequent 
 to him, even though the paper has been discounted for a 
 prior party."^ lie is like the drawer of a bill who issues it 
 with such names upon it. But if all the names of parties 
 antecedent to his own are genuine, he is then like the drawer 
 of a bill who issues' it without any names upon it; and if 
 he pays it to anyone holding under a forged indorsement 
 subsequent to his own, he may recover back the amount."* 
 If the instrument be transferred by delivery simply, the 
 act of transfer by delivery of a negotiable instrument falls 
 under the general rule of law, that in every sale of personal 
 
 20 Daniel on Nefrotiable Instruments, §§ 735, 1356. 13G1. 
 
 21 Ilortsman v. llenshaw, 11 How. 177; Mcacher v. Fort, 3 Hill (S. C), 
 227. 
 
 22 Rylea on Bills [*324], 401 ; 2 Parsons on Notes and Bills, 590, 591 ; 
 >tory on Bills, § 411. 
 
 2.'5 MacGregor v. Rhodes, G i:i. .^ lU. 2(>fi; 8tory on Notes, § 380; Star 
 Ins. Co. V. I^ank, GO N. II. 445; State T.aiik v. IVaring, 16 Pick. 533. 
 2-t Daniel on Negotiable Instruments, §§ 1225, 1355, 1357.
 
 2S8 DEFENSES. §§ 425, 426. 
 
 property the vendor impliedly warrants that the article is 
 in fact what it is described and purports to be, and that the 
 vendor has a good title or right to transfer it.^^ Therefore, 
 if the signature of the indorser be forged, the bank dis- 
 counting the bill or note offered for discount with such in- 
 dorsement upon it may recover back the amount from the 
 party from whom it received it.^** 
 
 § 425. Acceptance no admission of indorser's signature. — 
 But the drawee who accepts or pays a bill is never regarded 
 as thereby admitting the genuineness of the signature of an 
 indorser; for although it is true that every indorser is in 
 respect to his liability the same as a new drawer to the bill, 
 yet the acceptor cannot be presumed to have any such 
 knowledge of this signature as he has of the drawer's, and 
 therefore he is not presumed to admit it.^^ If the drawee or 
 acceptor of a bill were to pay it, and it turned out that the 
 indorsement of the payee or a special indorsee were forged, 
 the result would be that he could not charge the amount in 
 account against the drawer, and that the payment would be 
 invalid; but as his act implies no admission of the genuine- 
 ness of the indorser's signature, he could recover back the 
 amount from the holder to whom he paid it.^^ 
 
 ^ 426. When money paid on forged instrument can, and 
 when it cannot, be recovered. — It is a general principle of 
 law that money paid under a mistake of fact may be re- 
 covered back.^ And accordingly, where one pays money 
 on forged paper by discounting or cashing it, he can always 
 recover it back, provided he has not himself contributed 
 n-aterially to the mistake by his own fault or negligence, 
 
 2o Daniel on Negotiable Instruments, §§ 731, 1358; Smith v. McNair, 
 19 Kan. 330. 
 
 26 Burgess v. Northern Bank of Kentucky, 4 Bush, fiOO ; Cabot Bank 
 r. Morton, 4 Gray, 157. 
 
 27 White V. Continental Nat. Bank, 64 N. Y. 320; Story on Bills, 
 §§ 2C2, 412; Edwards on Bills, 190, 290, 400. 
 
 28 United States v. National Park Bank, 59 Hun, 495 ; Canal Bank v. 
 Bank of Albany, 1 Hill (N. Y.), 287: Smith v. Chester, 1 T. K. 654. 
 
 29 Louisiana v. Wood. 102 U. S. 298; Moses v. McTerlar, 2 Burr, 1005; 
 Carpenter v. Northboro Nat. Bank, 123 Mass. 09.
 
 § 427. DEFENDANT DID NOT MAKE INSTRUMENT. 289 
 
 and pro\aJed that by an immediate or sufficiently early 
 notice he enables the party to whom he has paid it to in- 
 demnify himself as far as possible.^*^ And now the doctrine 
 ia favored that even negligence in making the mistake is 
 no bar to recovery, unless it results in loss or damage.^^ 
 But it is undoubtedly necessary that the maker, acceptor, 
 or other party who demands restitution of money paid 
 under a forged indorsement, or under a forged signature 
 of the drawer of a bill, should make the demand without 
 unreasonable delay ;^- but the mere space of time is not 
 important, provided it be clearly shown that the holder will 
 be put to no more liability, trouble, or expense by a 
 restoration then than if it had been called for on the day 
 of payment. ^^ 
 
 Yet there may be circumstances under which the acceptor, 
 who has paid a bill under a forged indorsement, could not 
 recover the amount from the holder. Thus, if the forged 
 indorsement were u])on the bill at the time when the bill 
 was issued by the drawer, the drawer or acceptor papng 
 it could not maintain an action to recover the amount from 
 the holder, for the reason vv-hy such actions are generally 
 allowed would not apply. The holder could himself recover 
 from the drawer, as the latter could not deny the genuine- 
 ness of signatures which he had liiinself sent into the world. 
 For the like reason the drawer or acceptor could charge the 
 amount in account against the drawer.^'* 
 
 §427. Material alteration; general rule. — Any change in 
 the terms of a written contract which varies its original 
 legal effect and operation, whether in respect to the obli- 
 gation it imports, or to its force as matter of evidence, when 
 
 30 Frank v. Lazier, 91 X. Y. 115; Lovinger v. First Nat. Bank, 81 
 Ind. 358. 
 
 31 United States v. National Park Bank, G Fed. 852; Fraker v. Little, 
 24 Kan. 599; Young v. Lehman, G3 Ala. 523. 
 
 32 United States v. Clinton Nat. Bank, 28 Fed. 357. 
 
 33Koontz V. Central Nat. Bank, 51 Mo. 275; 2 Parsons on Notes and 
 Bills. 598; ^^^lite V. Continental Nat. Bank. 64 N. Y. 31G. 
 34 Daniel on Negotiable instruments, § 13G6. 
 
 19
 
 290 DEFENSES. § 428. 
 
 made by any party to the contract, is an alteration thereof, 
 unless all the other parties to the contract gave their ex- 
 press or implied consent to such change. And the effect 
 of such alteration is to nullify and destroy the altered in- 
 strument as a legal obligation, whether made with fraudu- 
 lent intent or not."^ If the alteration be material, and made 
 with a fraudulent intent, it is forgery ; and if innocently 
 made, and yet material, it vitiates the instrument, although 
 it falls short of being forgery.^" 
 
 § 428. In what material alteration consists. — In order to 
 constitute an alteration material, it must have the legal 
 effect of changing the legal status or relationship of the 
 parties to the instrument. This is true, without regard 
 to the question whether it injures or benefits either the 
 debtor or creditor. Hence, a material alteration may consist 
 in changing its date, or the time or place of payment, 
 or the amount of principal or interest to be paid, or 
 the medium or currency in which payment is to be made, 
 or the number or the relations of the parties, or the 
 character and effect, of the instrument as matter of obliga- 
 tion or evidence.'^^ And the alteration may be effected by 
 adding to the instrument some new provision, or by sub- 
 stituting one provision for another, or by obliterating or 
 subtracting from it some provision incorporated in it. 
 As has been indicated, it will be no answer to a plea of 
 alteration that its operation is favorable to the parties af- 
 fected by it, whether in lessening or increasing the amount 
 to be paid, or in enlarging or abbreviating the time of pay- 
 ment, or otherwise. Xo man has a right to vary another's 
 obligations at his discretion, whether for his good or 
 ill. It ceases, when thus varied, to be that other's act, and 
 it is sufficient for him to say: " This is not my contract." ^^ 
 
 sSMersman v. Werges, 112 U. S. 141; Angle v. Insurance Co., 92 U. S. 
 330 ; Heath v. Blake, 28 N. C. 406. 
 
 36 Daniel on Negotiable Instruments, § 1373. 
 
 3T Daniel on Negotiable Instruments, § 1375; Drexler v. Smith, 30 
 Fed. 757. 
 
 38 Weir V. Walmsley, 110 Ind. 24G; Warden v. Ryan, 37 Mo. App. 
 466; Wager v. Brooks, 37 Minn. 392.
 
 § 429. DEFENDANT DID NOT MAKE INSTUUMENT, 291 
 
 Even a decrease of the amount destroys the identity, and eon- 
 fuses the traces of his obligation, and every reason of policy 
 and principle forbid that the laws should tolerate tampering 
 with the rights and engagements of others. 
 
 § 429. Changing date of instrument and time of payment. — 
 Any change in the date imparts a new legal effect and ojjcra- 
 tion to it, and is a material alteration, which avoids it as 
 against prior parties and sureties even in the hands of a 
 bona fide holder without notice.^^ The time the instrument 
 beranie a subsisting contract, and the time when the con- 
 tract is to be performed in many cases, and a thousand cir- 
 cumstances may arise which may add consequence to the 
 question when the instrument was issued. It matters not 
 that the time of payment by relation to the date, may bo 
 prolonged, for sufHce it to say it was not the time agreed 
 on. Thus, in a case before the United States Supreme 
 Court, where the maker of the note, drawn payable ono 
 year from date, changed " September 11 " to " October 11 " 
 before delivery, without consent of his surety, it was held 
 that the note was avoided as to him."*^ 
 
 The alteration may be in the year, or the mouth, or tho 
 day of the month, or in all three.'*^ 
 
 Even where a note was altered in date to one day pre- 
 vious, and the effect as to its time of maturity remained 
 unchanged, because of the circumstance that originally it 
 would have fallen due, as its face imported, on Sunday, and 
 therefore would have been legally due on Saturday, and by 
 the change of date it fell due on Saturday, so that in point 
 of fact Saturday in either case was its day of payment, it 
 was held that it was avoided by the alteration,^" And the 
 decision seems clearly right. And accordingly, an insertion 
 of a date in a blank left for that purpose in a note intrusted 
 
 so^Master v. Miller, 4 T. R. 320; Crawford v. West Side Bank, 100 
 N. Y. .50; Britton v. Dierker, 40 :Mo. .")92. 
 
 40 Wood %^teole, Wall. SO. 
 
 41 Thorup^P on Bills, 111; Jacob v. Hart. 2 Stark. 4."); Outhwaite v. 
 Luntley, 4 Kimpb. 170; Walton v. Hastings, 4 Campb. 223. 
 
 42 Stevens v. C.rahani, 7 Serg. & R. 505.
 
 292 DEFENSES. § 430. 
 
 to the maker by the indorser, has been hekl not an altera- 
 tion, as an authority to fill the blank will be implied from 
 the relations of the parties.'*^ 
 
 A change in the time of payment is obviously of the 
 same nature as a change in the date, identical in principle 
 and effect; and whether such change delays, accelerates, or 
 preserves in legal effect the time specified or implied for 
 payment, it constitutes a material alteration."*^ 
 
 § 430. Chan^ng place of payment. — When the instruriient 
 has been drawn payable at a particular place, the oblitera- 
 tion of such place, so as to make it payable generally, con- 
 stitutes a material alteration as against all the parties not 
 consenting;'*^ and likewise where no place is designated, it 
 is a material alteration to insert one.^*' And a fortiori it 
 is a material alteration to obliterate one place and insert 
 another; as, for instance, to erase an acceptance payable at 
 " Bloxham & Co.'s," and insert the name of " Esdaile & 
 Co." in lieu."*" Where the drawer of a bill, after acceptance 
 and without acceptor's consent, wrote after the acceptance 
 " payable at Mr. B.'s, Chiswell street," it was held a material 
 alteration and the acceptor discharged ;^^ though in England 
 it was formerly held othemvise.^'"* So, striking out " in 
 London," and thus making the bill payable generally. So, 
 adding to a note '' payable at the Bank of Smyrna." ^^ Even 
 a bona fide holder cannot recover upon an acceptance so 
 altered, nor upon a note so altered against parties prior to 
 the one making the alteration.^^ Changing the place of 
 
 « Mitehcll V. Culver, 7 Cow. 33G. 
 
 44Iiathe V. Taylor, 15 East, 412; Miller v. Gilleland, 19 Pa. St. 119. 
 45 McCurbin v. Turnbull, Thompson on Bills, 1 12. 
 
 4CXazro V. Fuller, 24 Wend. 374; Townsend v. Star Wagon Co., 10 
 Kebr. 01.''); Whitesides v. Northern Bank, 10 Bush, m\. 
 
 47 Tidinarsh v. CJrover, 1 Maule & S. 735; Bank of Ohio Valley v. Lock- 
 wood, 13 W. Va. 392. 
 
 48 Cowie V. Halsall, 4 B. & Aid. 197. 
 49Trapp V. Spearman, 3 Esp. 57. 
 
 &0 Burchfield v. Moore, 25 Eng. L. & Eq. 123; Sudler v. Collins, 2 
 Houst. 538; Bullard v. Insurance "Co., 81 Ind. 239. 
 
 51 Nazro v. Fuller, 24 Wend. 374 ; Sudler v. Collins, 2 Houst. 538.
 
 § 431. DEFENDANT DID NOT MAKE INSTUUMENT. 293 
 
 date would change the rights of the parties, and hence is an 
 altera tion.^^ 
 
 The effect of statutes in England and in the United States 
 which provide that acceptances of bills drawTi payabh; 
 at a banking-house or other particular place shall be 
 deemed general acceptances do not vary the principles aj>- 
 plicablo to alteration, because, though the acceptance bo 
 general, the insertion of a particular place induces the holder 
 to present tlio bill there, instead of to the acceptor himself.^^ 
 
 §431. Change in amount of principal or interest. — Any 
 change in the amount of the principal for which the instru- 
 ment is executed is a material alteration, whether it be 
 increased or lessened; as where, for instance, the amount U 
 chaTiged from $500 to $400, for it is a palpable variance of 
 the instrument's legal eiiect in its most vital part.**^ Indeed, 
 an alteration to a larger amount is a forgery; and so also of 
 a smaller amount, if with fraudulent intent. 
 
 It has been hold that where the principal altered a note 
 so that its amount was lessened, and then delivered it to 
 the payee, the surety was not discharged.^'' Certainly the 
 identity of the contract was destroyed, and it is ditKcult to 
 reconcile this case with the principles and authorities al- 
 ready stated. Doubtless, the idea that it was a release, and 
 therefore a benefit to the surety, pro tanto, had a weighty 
 influence with the court; but the law denominates any 
 change in the legal eiiect of a contract an alteration, and 
 its policy is to tolerate no tampering with written instru- 
 ments. 
 
 Any addition of words making the bill or note bear in- 
 terest when it originally did not, or changing the time when 
 interest should run, or varying the percentage of interest, 
 
 52Mahai\ve Bank v. Douglass, 31 Conn. 170. 
 
 63 Daniel on Is'egotiable Instruments, § 1379. 
 
 *4 Bank of Commerce v. Union Bank, 3 N. Y. 230 ; Batchelder v. 
 White, 80 Va. 103; Stevens v. Graham, 7 Serg. & K. 505; Hewins v. 
 Cargill, 67 Mc. 554. 
 
 esOffle V. Crahani, 2 Pa. 132.
 
 294 DEFENSES. § 432. 
 
 is of the same character as if it changed the principal.'^^ 
 If the rate of interest be left blank, authority is not implied 
 to the holder to till in an amount greater than the legal 
 rate, and he would effect a material alteration in doing so.^*^ 
 But he may insert the legal rate.^^ AVhere the words 
 " with la-\vful interest " were written on the comer of the 
 note ; where " with interest from date " were incorporated 
 in it; and where " with interest " were written by the maker 
 after it had been indorsed, but before delivery to the payee, 
 it was alike held to be material, and to avoid the note as 
 against nonconsenting parties ;^^ where "with interest pay- 
 able semi-annually " were inserted before delivery to payee, 
 and where they were inserted afterward, the surety was 
 discharged;^*' and where " Avith interest" was added, but 
 without fraudulent intent, and " interest to be paid an- 
 nually." ^^ So adding, " eight per cent, interest; " or '' bear- 
 ing ten per cent, interest from maturity;" or " with half 
 legal interest until maturity;" and so where " after ma- 
 turity " was added to interest clause ; and so where the like 
 words in the interest clause were erased.^^ A change of 
 percentage is of like effect. Thus, where " nine per cent." 
 was added to the words of a note " on demand and interest;" 
 and where twelve per cent, was changed to ten.^^ 
 
 § 432. Change in medium of payment. — A change of the 
 kind of currency, as by the addition of the words " in specie " 
 to a bond after the sum; or the word "gold" after the 
 term " dollars " in a note; or of the denomination, as " from 
 
 C6 Harsh v. Klepper, 28 Ohio St. 200; Woodworth v. Anderson, 63 
 Iowa, 503; Davis v. Henry, 13 Nebr. 500. 
 
 5" Hoopes V. Collingwood, 10 Colo. 107. 
 
 58 First Nat. Bank v. Carson, 60 Mich. 437. 
 
 C9 Warrington v. Early, 2 El. & BI. 763; Brown v. Jones, 3 Port. (Ala.) 
 420; Waterman v. Vose, 43 Me. 504. 
 
 eoNeff V. Horner, 03 Pa. St. 327; Dewey v. Peed, 40 Barb. IG. 
 
 «iFay V. Smith, 1 Allen, 477; Boalt v. Brown, 13 Ohio N. S. 364. 
 
 62 Hart V. Clouser, 30 Ind. 210; Lee v. Starbird, 55 Me. 491; Lamar 
 T. Brown, 56 Ala. 157; Coburn v. Webb, 56 Ind. 96; Dietz v. Harder, 
 72 Ind. 208. 
 
 63 Ivory V. Michael, 33 Miss. 398; Whitmer v. Frye, 10 Mo. 348.
 
 .§ 
 
 5 4^''^ 
 
 oo. 
 
 DEFENDANT DID NOT MAKE INSTRUMENT. 
 
 29; 
 
 pounds into dollars; from sterling pounds into current 
 pounds/' even tlioug-li it coidd do no possible injury, would 
 avoid the instrument,''"* and there might be cases in which 
 positive or possible injury would result. And so the erasurf 
 of such words would equally amount to alteration.'^^ In a 
 recent case before the United States Supreme Court, the 
 words in an order which made it i)ayable " in drafts to the 
 order of H. G. A." were erased with a pen, and " in current 
 funds" inserted in their stead; and the i)aper was hehl 
 avoided thereby/"' So, if the instrument be payable in 
 goods, on the same principle, if the style or character of the / 
 goods were changed, it would be vitiated. It was so held 
 where a note was payable " in merchantable meat stock," 
 and the word ''young" was interpolated after merchant- 
 able;''' so, adding ''good hard" before 'Svood," or writing 
 *' good " before " merchantable wool." ^ 
 
 § 433. Change as to parties. — ^biy alteration in the per- 
 sonality, number, or relations of the parties is, as a general 
 rule, a material alteration. Thus, where C, member of the 
 firm of C. & Co., obtained an accommodation indorsement 
 to his individual note, and then added " k Co." to his 
 signature, thus making it his firm's note, it w^as held a ma- 
 terial alteration.*'" When there are several makers or co- 
 sureties, the addition of another maker or cosurety consti- 
 tutes a material alteration; for the addition of another 
 maker destroys the integrity of the original contract; and 
 the addition of another cosurety changes the right of the 
 sureties in respect to the proportion of contribution for 
 which each is liable to the others.'" And the erasure of the 
 
 64 Darwin v. Kippey, G3 N. C. 318; Bogarth v. Biecdlovc, 39 Tex. 5G1; 
 Stevens v. Graham, 7 Serg. & R. 505. 
 
 05 Church V. Ho'Aard, 16 Hun, 5. 
 
 «6 Angle V. N. W., etc., Ins. Co., 92 U. S. 330. 
 
 6T Mailcnihilo v. Follett, 1 N. H. 95. 
 
 csSchwalm v. ]M(lntyre, 17 Wis. 232. 
 
 6»HaHkell v. Champion, 30 Miss. 13G. 
 
 70 Hamilton v. Hooper, 46 Iowa, 516; Houek v. Graham, 106 Ind. 195; 
 McVean v. Scott, 46 Barb. 379; Sullivan v. Rudisill, 63 Iowa, 15S; 
 Monson v. Drakeley, 40 Conn. 552.
 
 296 DEFENSES. § 434. 
 
 name of one of two drawers or makers, or payees, who have 
 indorsed the paper, or of one of several cosureties, or the 
 name of the payee and inserting another, is likewise a ma- 
 terial alteration.'^^ So the substitution of one drawer or 
 drawee, or maker or comaker for another, is of like effect.'^ 
 Whether or not the addition of another name to that of the 
 maker (when there is but one) is a material alteration, which 
 discharges him, is a question upon which the authorities are 
 divided. Applying sound principle to the controversy, it 
 would seem that the alteration should be regarded as im- 
 material. The addition does not vary the original maker's 
 liabilities in any respect. There could be no motive of fraud 
 upon him or others to induce the addition. And while it 
 would come Avithin the letter of those declarations of courts 
 that maintain anything which affects the integrity of the 
 instrument to be a material alteration, it does not seem to 
 come Avithin their spirit.'^^ 
 
 § 434. Change affecting the character of the obligation. — A 
 change in the character or effect of the instrument, wdiether 
 in respect to its obligation or to its weight in evidence, is a 
 material alteration. Thus, the addition of a seal to the 
 signature of the maker of a note converts it into a bond, 
 against w^hich no plea of want of consideration can be made^ 
 and thus invests his contract with attributes which he 
 declined to impart to it.'^* Consequently the note is avoided. 
 So a bond is avoided by detaching the seal.'^^ 
 
 So when a seal is added to the name of one of several 
 comakers of a note, all are discharged, because the holder 
 could not have the same recourse against the three which 
 he held before; one would be estopped from denying a 
 
 71 Mason v. Bradley, 11 M. & W. 590; Cumberland Bank v. Hall, 1 
 Hals. 215; McCramer v. Thompson, 21 Iowa, 244; Robinson v. Berry- 
 man, 22 Mo. App. 510; Horn v. Bank, 32 Kan. 521. 
 
 72 Davis V. Coleman, 7 Ired. 424; State v. Polk, 7 Blackf. 27. 
 
 73 Daniel on Ncf^otiable Instruments, §§ 1388, 1389, and cases cited. 
 
 74 United States v. Linn, 1 How. 104; Marshall v. Gougler, 10 Serg. & 
 R. 164. 
 
 75Piercy v. Piercy, 5 W. Va. 199.
 
 §§ 435, 43G. DEFENDANT DID NOT MAKE INSTRUMENT. 
 
 297 
 
 want of consideration which might inure to the benefit of 
 all, and new relations and obligations would be created. 
 
 The interlining of the words " jointly and severally," or 
 " severally," or " or either of us " in a note joint and not 
 several, would be a material alteration, as they would en- 
 graft upon the joint a several obligation.'*^ liut where a 
 joint note has the eifect to bind the parties jointly and 
 severally, the insertion of those words would be immaterial, 
 because merely expressing what was already implied." 
 
 And the changing of a note from " I promise " to " Wc 
 promise " is material, because it changes a joint and several 
 note into one joint only."^ Adding the word " collector " 
 by the payee to his name has been held in Xew Jersey a 
 material alteration."® 
 
 The addition of the name of a witness to an instrument 
 required by law to be witnessed is a material altcrati(jn, but 
 if the instnnnent need not be witnessed or if it already has 
 on it the number of witnesses required by law, the altera- 
 tion is immaterial. 
 
 § 435. Change in consideration. — It has been held that if 
 a bill be expressed generally " for value received," and 
 words are added describing such consideration as "for the 
 good-will and lease in trade " of a certain person, or " for a 
 certain tract of land," it is materially altered and avoided.^*^* 
 The reasons assigned are, first, that it makes the note a 
 confession in evidence of a fact which might otherwise re- 
 quire extraneous proof; and, second, that it puts the holder 
 upon inquiry whether that consideration passed. ^^ 
 
 § 436. Change in words of negotiability. — The addition of 
 the negotiable words, " or order," or " bearer," is not an 
 
 76Perring v. Hone, 2 Car. & P. 401 ; Draper v. Wood, 112 Mass. 315. 
 
 77 Gordon v. Sutherland, Thompson on Bills, 113; Miller v. Reed. 27 
 Pa. et. 244. 
 
 78 Humphreys v. Guillow, 13 X. II. 38.5; Ilemmemvay v. Stone, 7 
 Mass. 58. 
 
 70 York V. Jones, 43 N. J. L. 332. 
 
 eOKnill V. Williams, 10 East, 413; Low v. Arfrrove, 30 Ga. 120. 
 812 Parsons on Notes and Bills, 562; Daniel on Negotiable Instru- 
 ments, § 1394.
 
 298 L>EFE2sSES. § 437. 
 
 alteration ^vhen tliey were intended to have been inserted, 
 and were accidentlv left out.^^ But where the effect of such 
 addition is to impart negotiability to an instrument not de- 
 signed to be negotiable, it is a most material alteration in 
 the nature of the contract, and the bill or note is thereby 
 avoided.^^ So the interlineation of " or bearer " in a nego- 
 tiable note, payable to a certain person or order, is an al- 
 teration of it, because it materially changes the manner of 
 its negotiability.^^ 
 
 § 437. Immaterial alterations — 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 addi- 
 tion of words which the law would imply, or by striking 
 out words of no legal significance.^^ Thus, writing out the 
 name of the bank after the name of the signature " cashier," 
 which was intended to bind the bank, is merely expressing 
 more clearly the legal effect of the signature, and is not an 
 alteration.^^ So the insertion of a dollar mark before the 
 numerals expressing the amount in dollars; or insertion of 
 the word " annually " after the interest clause in a note 
 payable on or before a certain time; or changing the mar- 
 ginal figures so as to conform them to the written amount; 
 or the addition in full of the christian names of the drawers 
 whose surnames had been affixed before the acceptance; the 
 interlineation of the surname of the payee, after delivery; 
 the running of a pen through the words " Providence Steam- 
 Pipe Co.," which was one name under which a firm did 
 business, and writing over it their style in the copartners' 
 names, were likewise adjudged immaterial.^'^ So also where 
 
 S2 Kershaw v. Cox, .3 Esp. 246; Byrom v. Thompson, 11 Ad. & El. 31. 
 
 83 Bruce v. Wcstcott, 3 Barb. 274 ; Johnson v. Bank of tlie United 
 States, 2 B. Mon. 310. 
 
 84 Booth V. Powers, 56 N. H. 30; Union Nat. Bank v. Roberts, 45 
 Wis. 373. 
 
 8r>Tutt V. Thornton, 57 Tex. 35; Fuller v. Green, 64 Wis. 104. 
 
 86 Bank of Genesee v. Patchin Bank, 13 N. Y. 309; Folger v. Cliase, 
 18 Pick. 63. 
 
 87 Houghton V. Francis, 29 111. 244; Leonard v. Phillips, 39 Mich. 182; 
 Smith V. Smith, 1 R. I. 398; Blair v. Bank of Tennessee, 11 Humphr. 84; 
 Manchet v. Cason, 1 Brev. 307 ; Arnold v. Jones, 2 R. I. 345.
 
 §§ 438, 439. DEFENDANT DID NOT MAKE INSTRUMENT. 299 
 
 a bill was addressed t.. ;i linn l.y the style of "A. B. <fc Co.," 
 and on being accepted by them in the name of "A. As 13.," 
 and the address was changed to conform to the acceptance, 
 there being no question as to the identical firm intended, 
 and the acceptors being liable either way.**^ It may be gen- 
 erally stated that no change in the phraseology of the in- 
 strument is material when it does not essentially change its 
 legal effect.^'-* 
 
 § 438. Change authorized. — It is quite obvious that where 
 all the parties to a bill or note expressly agree to a change 
 in any of its terms they cannot complain of such change 
 as an alteration.**" They have as much right to change as 
 to make a contract. And where all do not consent, those 
 consenting are bound, while the rest are discharged.''^ 
 
 Consent may be given before the change is made, or it 
 may be given afterward by ratification.'-*- It may be ex^n-ess, 
 or it may be implied from custom, or from the acts of the 
 parties."'*^ Where one indorses for accommodation of the 
 maker, a note in which the place of payment is left blank, 
 authority to the maker to fill the blank will be presumed, 
 that being indispensable to the negotiability of the instru- 
 ment, and the use of it for the purpose intended.^* 
 
 § 439. Eights of bona fide holder of altered instrument. — 
 As a general ride, the material alteration of an instrument 
 will vitiate it, even in the hands of a bona fide holder with- 
 out notice. But when the drawer of the bill or the maker 
 of the note has himself, by careless execution of the instru- 
 ment, left room for any alteration to be made, either by 
 insertion or erasure, without defacing it, or exciting the 
 
 SSFarquhar v. Southey, Moodj' & ]\r. 14. 
 89 Holland v. Hatch, 15 Ohio St. 464. 
 OoWardlow v. List, 41 Ohio St. 414. 
 
 01 Grimstead v. l?iiggs, 4 Iowa, 559; Bank of Ohio Valley v. Lock- 
 wood, 13 W. Va. 392. 
 
 02 National State Bank v. Rising, 4 Hun, 793; Cannon v. Grigsby. 
 110 III. 151. 
 
 »:' Woodworth v. liank of America, 19 Johns. 391; Clute v. Small, 17 
 Wend. 238. 
 WWessell V. Glenn, 108 Pa. St. 105.
 
 300 DEFENSES. § 440. 
 
 suspicious, of a careful mau, lie Avill be liable upon it to any 
 buna fide holder without notice when the opportunity which 
 he has afforded has been embraced, and the instrument filled 
 up with a larger amount or different terms than those which 
 it bore at the time he signed it.^^ The true principle ap- 
 plicable to such cases is that the party who puts his paper 
 in circulation, invites the public to receive it of any one 
 having it in possession with apparent title, and he is es- 
 topped to urge an actual defect in that which, through his 
 act, ostensibly has none.'^'^ " It is the duty of the maker of 
 the note to guard not only himself, but the public, against 
 frauds and alterations by refusing to sign negotiable paper 
 made on such a form as to admit of fraudulent practices 
 upon them with ease, and \vithout ready detection." '•*' The 
 inspection of the paper itself furnishes the only criterion by 
 wdiich a stranger to whom it is offered can test its character, 
 and when the inspection reveals nothing to arouse the sus- 
 picions of a prudent man, he will not be permitted to suffer 
 when there has been an actual alteration, to which the payor 
 by his negligence contributed.'^'* 
 
 If the alteration were made without any fault on the 
 part of the maker, drawer, or acceptor, neither will then be 
 bound, although the alteration were so skilfully made as to 
 escape notice upon careful observation. Thus, where a 
 banker's check had been dexterously altered by a chemical 
 process, the original sum being expunged, and a larger in- 
 serted, the banker was not allowed to recover of the drawer 
 more than the sum for which the draft actually called when 
 he drew it.^ 
 
 § 440. Effect of material alteration fraudulently made. — 
 When a party to a bill or note fraudulently alters its legal 
 
 95 Garrard v. Haddan, 67 Pa. St. 82; Johnstoh Harvester Co. v. Mc- 
 Lean, 57 Wis. 258; Lowden v. National Bank, 38 Kan. 533. 
 
 96 Van Duzer v. Howe, 21 N. Y. 538. 
 
 97 Zimmerman v. Rote, 75 Pa. St. 188; Brown v. Reed, 79 Pa. St. 370. 
 
 98 Daniel on Negotiable Instruments, § 1405; Blakey v. Johnson, 13 
 Bush, 204. 
 
 90 Hall V. Fuller, 5 B. & C. 750.
 
 ^ -l-tl. DEFliNOAXT IHU .NOT MAKK IXSTULM KNT. .'iOl 
 
 offoct, he not only destroys the instrnment hy thus destroy- 
 iii-;' its leg-al identity, but he also extinguishes the debt for 
 which it was given. And it cannot afterward be made the 
 basis of, or evidence for, a recovery in any form of action 
 whatever;^ though, of course, it might be admissilde to de- 
 feat a claim on the ground of fraud, or convict a party of 
 a crime." It is necessary that the law should impose this 
 forfeiture of the debt itself upon one who fraudulently tam- 
 I)ers ^\dth the instrument which evidences or secures it; and 
 it is done upon the principle that " no man should be per- 
 mitted to take the chance of gain by the commission of 
 a fraud, without running the risk of loss in the case of 
 detection." ^ 
 
 §441. Effect of material alteration innocently made. — If 
 the alteration is material, and was made innocently, the in- 
 strument, notwithstanding, is vitiated, and no suit thereon 
 can be maintained."* But the holder may sue upon the orig- 
 inal cause of action f but he could not sue any party 
 whose remedy, after making payment, would be impaired 
 by the alteration.*' In a Xew York case the law applicable 
 to the situation stated has been thus expressed: "If the 
 alteration was made without fraudulent intention the payee 
 may resort to the original indebtedness, if that was inde- 
 pendent of the note, and has not been discharged by the 
 execution of it, and pursues the maker upon that. But to 
 have such resort, he must be able to produce and surrender 
 the note," ' There is a class of cases, however, that an- 
 nounces the rule to be that the instrument is ipso facfo 
 
 1 Wliccloek V. Freeman, 13 Pick. 165; Booth v. Powers, 50 N. Y. 31; 
 Wallace v. Harmstad, 44 Pa. St. 492. 
 
 iiChitty on Bills [*191], 210. 
 
 •■5 Newell V. :Mayberry, 8 Leigh, 254; Vogle v. Ripper, 34 111. 107. 
 
 4 Angle V. N. W., etc., Ins. Co., 92 U. S. 342; Harsh v. Klcppcr, 20 
 Ohio St. 200; Booth v. Powers, 50 N. Y. 31; Moore v. Hutchinson, 09 
 Mo. 429. 
 
 B Atkinson v. Hawden, 2 Ad. & El. 109; Owen v. Hall, 70 Md. 100; 
 Sloman v. Cox, 1 Cronip., M. & R. 471. 
 
 OAlderson v. Langdale, 3 B. & Aid. 6G0. 
 
 7 Booth V. Powers, 56 N. Y. 31.
 
 302 DEFENSES. §§ 442, 443. 
 
 avoided, and the original consideration forfeited, regardless 
 of the intention ^vith which the alteration was made.* 
 
 ^ 442. Effect of immaterial change with fraudulent intent. — 
 It is said by some of the authorities, and by Greenleaf in 
 his treatise on Evidence, that if the alteration be fraudu- 
 lently made by the party claiming under the instrument, it 
 does not seem important whether it be in a material or an 
 immaterial part; for in either case, he has brought himself 
 under the operation of the rule established for the preven- 
 tion of fraud; and having fraudulently destroyed the iden- 
 tity of the instrument, he must take the peril of all the 
 consequences.'^ There are cases that support the conclusion 
 just announced, but it seems to be at variance with cor- 
 rect principle. If the change destroys the identity of the 
 instrument, it is material; but it has been well said, " an 
 immaterial alteration may be treated as no alteration; " and 
 accordinalv held that if the act itself is immaterial and can 
 work no injury, it is irrelevant to inquire into the motives 
 with w^hieh it was committed. Intent not manifested in a 
 material respect is nugatory, and this we conceive to be the 
 true doctrine.^" 
 
 § 443. Burden of proof of alteration. — The question as to 
 the burden of proof in respect to alterations is generally 
 affected by all the surrounding circumstances; and one fact 
 or another shifts it to and fro, the jury being left to weigh 
 the testimony and determine the issue with all the lights 
 that can be thrown upon it.^^ Very slight circumstances 
 may operate to shift the burden of proof, and it has been 
 well said by Ilorton, C J., in Kansas, that '' it is impossible 
 to fix a cast-iron rule to control in all cases." ^" The au- 
 
 SBigelow V. Stephens, 35 Vt. 525; Martendale v. Follett, 1 N. H. 99; 
 Savings Bank v. Shaffer, 9 Nebr. 1. 
 
 9 Greenleaf on Evidence, vol. I, p. 568. 
 
 10 Daniel on Negotiable InstrumentSj § 1416; Moge v. Herndon, 30 
 Miss. 120. 
 
 liAdmrs. of Beaman v. Paissell, 20 Vt. 210; Bailey v. Taylor, 11 
 Conn. 531; Kountz v. Kennedy, 03 Pa. St. 190. 
 12 Neil v. Case, 25 Kan. 510.
 
 § 444. CONTKACT SUED UPON ^■OXE^•FOUCKAULE. 303 
 
 tliorities are every way upon the proposition, and from the 
 resulting confusion the most that can bo generally said is 
 that each case must rest largely upon its own peculiar sur- 
 roundings. Chief Justice llorton, in the Kansas case re- 
 ferred to, stated the conflict of the cases on this subject 
 as folloAvs: "This is a vexed question, and the books are 
 full of diverse decisions. Four different niles are gener- 
 ally stated. (1) That an alteration on the face of the writ- 
 ing raises no presumption either way, but the question is 
 for the jury. (:2) That it raises a presumption against the 
 writing, and requires, therefore, some explanation to render 
 it admissible, (o) That it raises such a presumption when 
 it is suspicious, otherwise not. (4) That it is presumed, in 
 the absence of explanation, to have been made before de- 
 livery, and therefore requires no explanation in the first 
 instance. * * * Generally tlie instrument should be 
 given in evidence, and in a jury case should go to the jury 
 upon ordinary proof of its execution, leaving the parties 
 to such explanatory evidence of the alteration as they may 
 choose to offer. If there is neither intrinsic nor extrinsic 
 evidence as to when the alteration was made, it is to be 
 presumed, if any presumption is said to exist, that the altera- 
 tion was made before, or at the time of, the execution of 
 the instrument. Perhaps there might be cases w^hen the 
 alteration is attended with manifest circumstances of sus- 
 picion that the court might refuse to allow the instrument 
 to go before the jury until some explanation." 
 
 SECTION II. 
 
 THE CONTRACT SUED UPON IS IN LAW NONENFORCEABLE. 
 
 § 444. Incapacity of the party. — This subject has been 
 heretofore fullv and extensively treated in Book II, under 
 the head of "' Parties to the Instrument," ^^ and repetition 
 is unnecessary. If the party sued labor under a legal disa- 
 bility, whether the disability exists for the sake and pro- 
 is Ak^c, §§ ll(i-i()7.
 
 304 DEFENSES. §§ 445, 446. 
 
 tection of the ineapaeitated party, or grows out of a settled 
 public policy, the obligation is a nonenforceable one. This 
 (letense is available not only as between immediate parties, 
 but also as against a bona fide holder for value. 
 
 § 445. Want, failure, or illegality of consideration. — While 
 consideration is presumed in all cases of negotiable con- 
 tracts, and the plaintiff can rely upon this presumption, and 
 thus cast the burden of showing its absence upon the de- 
 fendant, the presumption is rebuttable, and when the want 
 or failure of a sufficient consideration is attacked and sub- 
 stantial evidence is offered to sustain this defense, the bur- 
 den shifts, and it rests with the plaintiff upon the whole 
 case to show by a preponderance of the evidence a con- 
 sideration sufficient to support the instrument sued on. 
 The defense of absence or failure of consideration is good 
 only between immediate parties. 
 
 The consideration is presumed to be legal, and, so far 
 as presumptions and burden of proof are concerned, is gov- 
 erned by the same principles that apply to want or failure 
 of consideration; but if in consequence of the illegality of 
 consideration, the instrument is by law declared void, this 
 defense avails not only as between the immediate parties, 
 but also against the hona fide holder for value. 
 
 These general observations are sufficient in this place 
 and connection — the entire subject having been hereto- 
 fore treated in a separate chapter.^^ 
 
 § 446. Fraud — Bishop, in his work on Contracts, defines 
 fraud to be : " Any spoken or acted falsehood, whereby one 
 is induced to enter into what in form is a contract, under 
 the belief that it is a different thing from what it is, or 
 that there is for it a motive which does not in truth exist." ^^ 
 In the sharp phrase of Lord Chief Baron Pollock, in 
 a leading English case,^^ " Fraud cuts down everything." 
 There seems to be no assignable limit beyond which fraud 
 
 f ' • ' - — 
 
 i*Ante, §§ 90-115. 
 
 15 Bishop on Contracts, § G43. 
 
 16 Rogers V. Hadley, 32 L. J. Exch. (N. S.) 248.
 
 §§447,448. 1M,A1NTIFF NOT ENTITLED TO SUE. 305 
 
 is destitute of le^al effect. '" It vitiates everj- transaction, 
 Avhether of contract, of judicial proceeding, or otherwise, 
 into which it enters." If a party, through th(^ fraud of 
 another, is induced to execute a contract wholly different 
 from what he meant, and he is without ladies in the trans- 
 action, the fraud partakes of the nature of a forgery, and 
 the instrument signed by him is not in law his contract. 
 It is not merely voidable, hut void — void in the hands of an 
 innocent third party, as Avell as l)etween the original par- 
 ties. If, however, the fraud consists in the inducement or 
 consideration to the entering into the contract, and the 
 party executed the instrument he intended to, the defense 
 will avail between the immediate parties, but will not be 
 effectual against a hona fide holder for value. 
 
 §447. Duress. — '" Duress is actual <>r threatened personal 
 violence or physical restraint to a person, or, in some cases, 
 to the person's husband or wife or near blood relative, or 
 to his fortune, such as will induce him to perform some 
 act under such circumstances that that act is not the prod- 
 uct of his will." ^" This subject has been elsewhere treated, 
 with special reference to the rights of hona fide holders 
 for value. ^** In this connection the student should remem- 
 ber that duress is always a good defense between the par- 
 ties to the transaction, and that while the authorities are 
 not uniform, the current of the decisions supports the view 
 that this defense is good even against the hona fide holder 
 for value. 
 
 SECTION III. 
 
 THE PI^\INTIFF IS NOT ENTITLED TO SUE. 
 
 § 448. Legal title to instrument not vested in plaintiff. — As 
 has been seen, the transferee of a non-negotiable contract 
 must bring action in the name of the original payee, to the 
 use of the transferee. This is upon the theory that, not- 
 withstanding the assignment, the legal title remains in the 
 
 17 Am. & Enp. Encyc. of Law (2d cd.), vol. X, p. 321. 
 
 18 Ante, § 224. 
 
 20
 
 30G DEFENSES. 
 
 449. 
 
 original owner. But the transfer of a negotiable contract 
 carries with it the legal title thereto, and the owner thereof 
 must bring action in his own name. It follows that if the 
 plaintiff is ijot the legal owner of the instrument, he 
 cannot maintain suit thereon in his own name. Any de- 
 fense which attacks the method and manner of transferring 
 the loo-al title to a negotiable instrument, or that would 
 invalidate the transfer, or any denial of the existence of a 
 transfer to the plaintiff, either by delivery, or by indorse- 
 ment and delivery, as the case may be, would, if made out, 
 constitute a legal bar to an action brought thereon. What 
 has been heretofore said on the subject of transfer by 
 indorsement and delivery, and of the steps that may be 
 necessary in detail to effectuate a change of legal owner- 
 ship from one person to another, need not be repeated here. 
 As to when one can maintain suit in his own name, and 
 when he must sue in the name of another, was fully dis- 
 cussed in the chapter on the subject of actions. It is gen- 
 erally sufficient here to say that if the plaintiff is not the 
 owmer or the agent or trustee of the owner, a defense suc- 
 cessfully setting up the fact will defeat recovery. 
 
 SECTION IV. 
 
 THE OBLIGATION CREATED HAS BEEN DISCHARGED. 
 
 § 449. Payment, nature of. — By payment is meant the dis- 
 charge of a contract to pay money by giving to the party 
 entitled to receive it, the amount agreed to be paid by one 
 of the parties who entered into the agreement. Payment 
 is not a contract. It is the discharge of a contract in 
 which the party of the first part has a right to demand pay- 
 ment, and the party of the second part has a right to make 
 payment. A sale is altogether different. It is a contract 
 which does not extinguish a bill or note, but continues it 
 in circulation as a valid security against all parties. And 
 it is necessary to constitute a transaction a sale that both 
 parties should then expressly or impliedly agree, the ono
 
 § 450. OBLIGATIOX HAS IM'.K.V DiJiC JIAKGED. o07 
 
 to si'll, and llic ulhci- l<» iitirflia^c the paper.'''' Whether 
 the transaction is a purchase or payment, is a qucstiiju for 
 the jury where the facts are in dispute, to be resolved ac- 
 cording to' the intention of the parties, and looking to the 
 substance of the matter rather than its form."'^ 
 
 Credit given by the drawee of a bill, or by a party to a 
 ]>ill or note, who is liable for its payment to the holder at 
 his request, is equivalent to payment."^ But if a bill ac- 
 cepted for the drawer's accommodation be sent to bank for 
 collection, and be credited to the holder at maturity, it has 
 been lield that the bank, as its holder, may sue the ac- 
 ceptor.-" " Payment of a debt is not necessarily a payment 
 of money; but that is payment which the parties contract 
 shall be accepted as payment," or which the law recognizes 
 as such.^ When a party to the instrument pays to the 
 holder the amount due upon it, he cannot show that he was 
 acting as the secret agent of another, and convert the pay- 
 ment thus made into a purchase. 
 
 § 450. Who may make payment. — Any party to a bill or 
 note may pay it, and an indorser who has been discharged 
 by failure of notice may still sue a prior indorser or other 
 parties who were not discharged, because, although not com- 
 pelled to pay it, he acquires the right of the holder from 
 whom he took the instrument, or is remitted to his own 
 rights as indorsee.^'* But it seems that if the indorser has 
 another note given him to secure and indemnify him for his 
 indorsement, and, not being notified, waives the defense, 
 and voluntarily pays the bill or note, he cannot enforce the 
 note given him as indemnity.^'' And a stranger has no riuht 
 to pay or discharge the contract of another, and cannot 
 
 i9Lancey v. Hark, 64 N. Y. 209; Eastman v. Plumer, 32 N. H. 23S. 
 aoDoufrhorty v. Deonoy, 4") Iowa, 443; Rand v. Barrett, GG Iowa, 735; 
 Swope V. Lcirmjrwell, 72 :\ro. 348. 
 
 21 Savage v. llerle, 5 Pick. 83. 
 
 22 Pacific Bank v. ifihlMll. Mete. (Mass.) 297. 
 
 2S IIiifTnianns v. Walker, i^d Tnaft. 315; Lionberger v. Kincaly, 13 
 AIo. A))]). 4. 
 
 24 Ellsworth V. Browcr. 11 Pick. 316. 
 25Bachcllor v. Priest, 12 Pick. 399.
 
 308 DEFENSES. § 451. 
 
 pay a bill or note so as to acquire the rights of a holder, 
 except swpra protest, as hereinafter indicated."'' But a 
 stranger may always ]nirchase a bill or note with the con- 
 sent of the holder. Where the drawer, when discharged 
 by the failure of the collecting agent of the holder to pre- 
 sent in due time, nevertheless took up and paid his draft, 
 but under protest, to protect his credit, he was held a mere 
 volunteer with no right to recover against the collecting 
 aaent of the holder through whose default he was dis- 
 charged from payment.^^ 
 
 § 451. Payor should see that holder traces legal title. — The 
 maker of a note or the acceptor of a bill must satisfy him- 
 self, when it is presented for payment, that the holder traces 
 his title through genuine indorsements; for if there is a 
 forged indorsement, it is a nullity, and no right i)asses by 
 it. And payment to a holder under a forged indorsement 
 would be invalid as against the true owner, who might re- 
 (piire it to be paid again.^'* But the maker or acceptor 
 niiciit recover back the monev as paid under a mistake of 
 fact.'^" When, however, the signature of the drawer is 
 forged, should the drawee acce])t or pay the bill, he becomes 
 absolutely bound, because it is his duty to know the drawer^s 
 handwriting; and if he pays the money he cannot recover 
 it back.^^ But acceptance does not admit the signature of 
 the drawer as indorser also; nor the authority of an agent 
 to indorse a bill drawn by him as agent of the drawer.^^ If 
 an indorser pays a bill or note upon which there is a prior 
 forged indorsement, he cannot recover back the amount, 
 because his indorsement was in itself a warranty that the 
 
 ■ 26 Edwards on Bills, ,535; Burton v. Slaughter, 26 Gratt. 919. 
 
 27 Harvey v. Girard Nat. Bank, 119 Pa. St. 212. 
 
 28 Smith V. Chester, 1 T. R. 654; Goddard v. Merchants' Bank, 2 
 Sandf. 247. 
 
 29 Daniel on Negotiable Instruments, § 13G9 et seq. 
 
 30 Bank of the United States v. Bank of Georgia, 10 Wheat. 333; 
 Johnson v. Bank, 27 W. Va. 343. 
 
 31 Robinson v. Yarrow, 7 Taunt. 455; Story on Bills, § 412; Daniel on 
 Negotiable Instruments, §§ 538, 539.
 
 §§ 452, 453. OBLIGATION HAS BEEN DISCHARGED. 
 
 309 
 
 prior iiulorscmeiits were genuine.''^ The payor should also 
 satisfy himself of the identity of the holder; for he cannot 
 defend himself against the real payee by sho\ving that he 
 paid the amount ( f the bill or note to another porrffjn of the 
 fipine name in good faith and in the usual course of business.^"* 
 
 § 452. Payments under mistake of law or fact. — It is a gen- 
 eral principle that money paid with knowledge of facts, but 
 under a mistake of law, cannot be recovered back.^"* But 
 a party i)aying money under a mistake of the real facts may 
 recover it back.^'^' Therefore, where a bank paid a post-dated 
 check to a holder who knew that the drawer was insolvent, 
 and that the drawee had no funds, but was in <'X]>ectation 
 of them that day, and none were received by the bank, it 
 was held that the amount might be recovered back.^*^ So 
 an indorser, discharged by laches, who pays a bill to the 
 holder under a misrepresentation of facts, may recover back 
 the amount, and so if such indorser pays the bill, relying 
 on the notarial certificate of due presentment, when in fact 
 no such presentment was made.^^ 
 
 i^ 453. Surrender of instrument and giving receipt as evi- 
 dence of payment. — The party nuiking payment sliould in- 
 sist on the presentment of the paper by the party demand- 
 ing payment, in order to make sure that it is at the time 
 in his possession, and not outstanding in another. And if 
 at the time he makes payment it is outstanding, and held 
 by a bona fide holder for value, ho will be liable to pay it 
 again, and a receipt taken will be no protection.^* The 
 party making payment of the bill or note should, also not 
 fail to insist upon its being surrendered up, as a voucher 
 that the party receiving the money was entitled to do so, 
 
 .■52 Daniel on Negotiable Instniinents, § 672. 
 ••J-! Craves v. Am. P^xch. Bank, 17 N. Y. 205. 
 34 Adams v. Reeves, OS N. C. 134. 
 
 3.'-. National Hank of the Commonwealth, 139 Mass. 513. 
 3C Martin v. Morgan, 3 Moore. 635. 
 
 STMilnes v. Duncan, 6 H. & C. 071: Talbot v. National Bank, 129 
 Mass. 67. 
 
 38 Wheeler v. Guild, 20 Pick. 545: Davis v. Miller, 14 Gratt. 1.
 
 310 DEFENSES. § 454. 
 
 and also that he has paid it to him.^^ The possession of 
 the note by the maker is presumptive evidence that he has 
 paid it;^" and so, likewise, is the. possession of the bill by 
 the acceptor, provided it can be sho^\^l that it passed out of 
 his hands after he accepted it, though otherwise it would 
 seem not.^^ 
 
 In addition to the surrender of the instrument, the fact 
 that it has been paid should be indorsed upon the ])aper 
 itself. This at once advertises the fact of payment to 
 every person who might subsequently come into possession 
 of the instrument by accident or fraud. This precaution 
 is especially wise and necessary if the instrument has been 
 paid before maturity. When an iudorser makes payment, 
 it is especially desirable that he should takei'a receipt as 
 well as require delivery of the instrument.^^ If there be a 
 general receipt of payment on the back of the instrument, 
 it will be presumed that it was made by the maker or accep- 
 tor, who was primarily liable; and this presumption would 
 exist even when the drawer had possession and sued the 
 acceptor upon a bill indorsed with such a receipt.^^ 
 
 § 454. To whom payment may be made. — Payment of a bill 
 or note should be made to the legal owner or holder thereof, 
 or some one authorized by him to receive it.'*'' If it bo 
 payable to bearer or indorsed in blank, any person having it 
 in possession may be presumed to be entitled to receive 
 payment, unless the payor have notice to the contrary ;^^ 
 and a payment to such person will be valid, although he 
 may be a thief, finder, or fraudulent holder.^^ 
 
 39 Otisfield V. Mayberry, 63 Me. 197. 
 
 40Dugan V. United States, 3 Wheat. 172; Nonis v. Badger, 6 Cow. 
 449. 
 
 41 Pfiel V. Vanbatenberg, 2 Campb. 439 : Barring v. Clark, 19 Pick. 220. 
 
 42 Story on Notes, § 452. 
 
 43 Scholey v. Walsby, Peake Cas. 24 ; Jones v. Fort, 9 B. & C. 764. 
 
 44 Stevenson v. Woodhull, 19 Fed. 575; Draper v. Rice, 56 Iowa, 114. 
 45Chappelear v. Martin, 45 Ohio St. 132; Brennan v. Merchants' Bank, 
 
 62 Mich. 343. 
 
 46 Bank of the United States v. United States, 2 How. 711; Dugan 
 V. United States, 3 Wheat. 172; Bank of Utica v. Smith, 18 Johns. 230.
 
 § 455. OllLlUATi(K\ JIAS HKKN lilSCHARGED. 311 
 
 It has been lield that a payment to any person in actual 
 possession will still be vidid, 1 .(cause, although he may have 
 no Icg-al tith', lie may be the aiient of the actual owner ;*^ 
 but this is unsound doctrine, and is not supported by the 
 weight of authority."*** But ]»ayment may be safely made 
 to one who is a special indorsee, although there may be 
 subsequent uncanceled indorsements of himself and others 
 on the paper;-*" or to the assignee of a ])ankrupt;^^^ or to 
 the representative. of a dead owner ;^^ or to the guardian of 
 an infant or insane person,'^" or to the husband whose wife 
 is payee.^^ If the instrument be payable to A. for the use 
 of 13., payment must be made to A.^"* Payment to one of 
 two joint payees will extinguish the debt,^^ and likewise if 
 made to a member of a partnership, or a duly constituted 
 officer of a corporation.^*' 
 
 § 455. When payment may be made. — Payment can only 
 be made before maturity by consent of both debtor and 
 creditor. ^^ And it can only be made with perfect safety at 
 or after the maturity of the instrument, unless the payor 
 receives it in his hands and cancels it; for a payment be- 
 fore maturity is not in the usual course of business; and 
 should the bill or note afterwards, and before maturity, 
 reach the hands of a bona fide holder for value without no- 
 tice, such holder could enforce a second payment.^^ If, 
 
 47 Biichelloi- V. rricst, 12 Pick. 40G. 
 
 •18 Daniel on Negotiable Instruments, § 1230; rortcr v. Cushman, 19 
 111. 572; Doublediiy v. Kress, 50 N. Y. 413. 
 
 ■»ODuj,nm v. United States, 3 Wheat. 172. 
 
 ^'■> Baylcy on Bills, 320; 2 Parsons on Notes and Bills, 211. 
 
 51 Bayley on Bills, 320; 2 Parsons on Notes and Bills., 211; Chitty on 
 Bills [*3!)3], 444. 
 
 ■"■2 Bayley on Bills, 320; 2 Parsons on Notes and Bills, 211; Chitty on 
 Bills 1*393], 444. 
 
 53 Chitty on Bills [*393, 394], 444. 
 
 f>4 Cranilington v. Evans, 2 Vent. 307. 
 
 55 Lyman v. Gedney, 111 111. 40G. 
 
 5C Daniel on Negotiable Instruments, § 1231. 
 
 57 Ebersole v. Ridding, 22 Ind. 232. 
 
 58Burbridge v. Manners, 2 Campb. 193; Wheeler v. Guild. 20 Pick. 
 645.
 
 312 DEFENSES. §§ 45G, 457. 
 
 however, the instrument be paid at or after maturity to 
 the bolder, tbe case is ditterent. Tbe instrument is not 
 only extinguisbed, but sbould tbe bolder fail to deliver it 
 up, and transfer it to anotber party, such party would re- 
 ceive it with notice upon its face that it was overdue, and 
 he could acquire no better right or title than bis transfer- 
 rer; and the plea that it was paid before the transfer would 
 be available against him. Still, tbe payor, in making pay- 
 ment after maturity, must be sure that it is made to tho 
 then holder. For, if it should have been transferred after 
 maturity, and before payment, to a third party, a payment 
 to the transferrer would be invalid, and tbe transferee hold- 
 ing the instrument could himself enforce payment.^^ 
 
 § 456. Time of day when payment may be made. — Pay- 
 ment may be demanded at any time after the commence- 
 ment of business hours on the day of maturity of the bill 
 or note. And if payment be then refused, or if the house 
 at which the instrument is payable be shut up, and no one 
 is there to answer, it may be treated as dishonored, notice 
 given, and resort taken upon the drawer and indorsers.^ 
 But the maker or acceptor has the whole day in which he 
 is pi-ivileged to make payment, and though he sbould in 
 the course of tbe day refuse payment, yet if he subsequently 
 on the same day makes payment, it is good, and the notice 
 of dishonor becomes of no avail.*'^ 
 
 § 457. In what medium payment may be made. — The 
 party bound to make payment has no right to do so in any 
 other medium than that expressed on the face of the instru- 
 ment — that .is, he must make payment in money.^^ And 
 an agent holding the instrument for payment can take 
 
 59 Davis V. ]\Iiller, 14 Gratt. 1; Adair v. Lenox, 15 Oreg. 493; Copp- 
 man v. Bank of Kentucky, 41 Miss. 212. 
 
 GO Ex parte Moline, 1 Rose, 303; Burbridge v. Maimers, 1 Camjjb. 193; 
 Hine v. Allely, 4 B. & Ad. G24. 
 
 Cl Hartley v. Case, 1 Car. & P. 555 ; Citizens' Bank v. Lay, 80 Va. 440. 
 
 62 story on Bills, § 419; Edwards on Bills, 550; Corbett v. Hughes, 
 75 Iowa, 282.
 
 § 458. OliLIGATIOX HAS BEEN DlSCllAUUKlJ. 
 
 3ia 
 
 i,(. thing else but uioney.*^ By money is meant some medium 
 of exchange made by hiw a legal Icn-lcr in payment of 
 debts. And if there be two or more kinds of UKUiey — i. e., 
 gold, silver, and paper — either will sutHce to discharge the 
 obligation, unless the instrument specifies that payment 
 shall bo made in a particular kind of money, in which event 
 the debtor cannot insist upon payment in any other. It 
 is competent to proviile in the instrument for payment in 
 legal-tender money of any country. Sometimes checks, 
 drafts, or notes are offered by the debtor in discharge of 
 the (h'bl, and the creditor may, if he i)h-a>es, accept th(; 
 same in absolute discharge thereof; but where the check, 
 draft, or note is received by the creditor, there is no pre- 
 sumption that he takes it in payment, but, on the contrary, 
 the implication is that it is only to be regarded as payment 
 if cashed or paid.^ 
 
 $< 458. Creditor's acceptance of depreciated currency is abso- 
 lute. — If the debtor tenders a depreciated currency in f nil 
 satisfaction of his debt, or any other currency than gobl 
 when it is specifically payable in gold, the creditor cannot 
 by protest accept the medium tendered, and then recover 
 the amount that gold exceeded it in value, lie must re- 
 fuse the tender or accept it; and if he accepts it ^^4thout 
 special agreement, he will be considered to have taken it 
 as offered in full satisfaction.*^^ And the same rule applies 
 in all cases where bank bills are tendered in discharge of 
 debts payable in money.*^" In like manner, though the in- 
 Ptrument be payable in bank notes, legal tender notes, or 
 other medium less valuable than coin, yet, if the creditor 
 tender gold or silver coin, A\nthout there being any contract 
 as to the rate at whieli it is to be taken, and it be received, 
 he cannot require it afterward ti> be ni)plied otherwise than 
 a dollar of coin for each dollar of the amount due, nor 
 
 03:MiKl(lur V. Bevan, 39 Md. 48;'); Honimon v. Shomon. 24 Kan. 3S7. 
 64 Small V. Franklin ]\rinin<i Co., 00 Mass. 277; Davison v. City Bank, 
 57 N. Y. 82; Heartt v. Rhodes, GG 111. Sfil. 
 en Gilnian v. County of Donijlas, Nov. 27. 
 0« Daniel on Xeyotjuble Inslnunt'iits, § 1072 ct seq.
 
 3 1-1: DEFENSES. § 459. 
 
 make any counterclaim for the value of the coin in excess 
 of the value of the medium of payment expressed in the 
 contract.*^^ 
 
 § 459. Appropriation of payment. — "Wlien a debtor is in- 
 debted to the same creditor in several items of account, 
 and pays him a sum of money in part liquidation of his 
 entire indebtedness, it often becomes a nice and important 
 question, not only between debtor and creditor, but also 
 as to third parties, to what item the credit shall be applied. 
 AVitli certain limitations and exceptions, the following gen- 
 eral principles apply in such cases: (1) The debtor making 
 payment may appropriate it to whatever item he pleases 
 when the payment is not under compulsion of law.''** (2) 
 If the debtor do not make application of payment, the 
 creditor may apply it as he pleases ;'^^ and the silence of 
 the debtor is construed as leaving the matter to the payee, 
 provided it is not an application peculiarly injurious to him, 
 or against his implied intention.^'* This right in the cred- 
 itor does not apply to debts not due if there are debts al- 
 ready due, nor to compulsory payments, nor to unlawful 
 demands, as for usurious interest; nor to a debt denied or 
 disputed by the debtor, to the exclusion of the one acknowl- 
 edged."^ (3) When neither party appropriates the payment, 
 the law will apply it according to equitable principles, and 
 with regard to the probable intention of the parties.'^ 
 Hence, the law will apply payment to the debt more bur- 
 densome to the debtor, especially to one bearing interest, 
 or subjecting him to a penalty or criminal charge, rather 
 than to those which are less burdensome. ^^ In accordance 
 
 07 Bush V. Baldrey, 11 Allen, 367. 
 
 68Tayloe v. Sandiford, 7 Wheat. 13; United States v. Januaiy, 7 
 Cranch, .572; Lingle v. Cook, 32 Cratt. 272. 
 
 G9Pattison v. Hull, 9 Cow. 747; Bennell v. Wilder, G7 111. 327. 
 
 70 Smith V. Screven, 1 McCord, 368; Blair v. Carpenter, 75 Mich. UJ7. 
 
 TlBobe V. Stickney, 30 Ala. 482; Blackstone Bank v. Hill, 10 Pick. 
 120; Bro\ra v. Lacy, 83 Ind. 430; Tayloe v. Sandiford, 7 Wheat. 13. 
 
 72Chitty on Bills [*403, 404], 455, 450; Lingle v. Cook, 32 Gratt. 272. 
 
 73 Wright V. Laing, 3 B. & C. 165; Spiller v. Creditors, 16 La. Ann. 
 292; Stone v. Seymour, 15 Wend. 29.
 
 ^ 400. OHLKi.VTKJ.X liAS UKKN DISCIIAKGED. 315 
 
 ^vith these principles, tlie law will impute tlie payment to 
 interest before principal; and where the interest itself bears 
 interest, it will impute it, first, to interest on interest; 
 second, to interest on principal; and third, to the prin- 
 cipal.^"* It will also impute payment to tho.se (hdjts wlii(di 
 are prior in date;'"' and to unsecured in ])reference to se- 
 cured debts, unless the latter are secured by a surety, in 
 which case the appropriation will be made for his relief."" 
 
 § 460. Payments by partners and joint debtors. — If a part- 
 ner owes a debtor, of whom his firm is debtor also, and 
 pays the money of the firm, it will be appropriated by law 
 to the debt of the firm;" and if he pays such debtor his 
 own mone}', it will be appropriated to his own debt.'^ And 
 no appropriation will be allowed which has the effect of pay- 
 ing one man's debt with another man's money.''^^ When a 
 person owes the same debtor on joint and on individual ac- 
 count, and simply pays an amount, ^^'ithout appropriating 
 it specifically, or it appearing whether it came from his in- 
 dividual or his joint funds, the creditor may apply it to 
 either account.**" " Where one of several partners dies, and 
 the partnership is in debt, and the surviving partners con- 
 tinue their dealings with a particular creditor, and the lat- 
 ter joins the transactions of the old and new firms in one 
 entire account, then the payments made from time to time 
 by the surviving partners must be applied to the old debt." ^^ 
 
 7-4 Lash V. Edgerton, 13 Minn. 21U; iitavr v. Richmond, 30 111. 27G; 
 Monroe v. Fohl, 72 Cal. 5GS; Ankctel v. Converse, 17 Ohio St. 11. 
 
 T5 United States v. Kirkpatrick, ',) Wheat. 720; Mills v. Fowlkes, 5 
 Bing. N. C. 4G1; Bobe v. Stickney, 30 Ala. 482. 
 
 TGLash V. Edgerton, 13 Minn. 210; Cole v. Withers, 33 Gratt. 204; 
 riain V. Roth, 107 111. r)94; ilarryatts v. White, 2 Stark. 101. 
 
 77 Thompson v. Brown, Moody & M. 40, 
 
 78Fairehild v. Holly, 10 Conn. 175. 
 
 7!) Thompson v. Brown, IMoody & M. 40. 
 
 80 Van Rensselaer's Exrs. v. Roberts. 5 Den. 570; Baker v. Stackpole, 
 9 Cow. 420. 
 
 81 Simon v. Ingham, 2 B. «t C. 72; Hooper v. Keay, 2 Q. B. Di\ . 17^.
 
 31G DEFENSES. §§ 4G1, 462. 
 
 §461. Payment supra protest. — Wlieu the bill has been 
 protested for noupayment, aud not before,^^ a stranger may 
 pay it for the honor of the drawer, or acceptor (if it has been 
 accepted), or of any indorser, or he may pay it for the honor 
 of all the parties — for honor generally, as snch a payment 
 is tenned. And such a payment does not, like a simple pay- 
 ment by the original drawee, operate as a satisfaction of the 
 bill, but itself transfers the holder's rights to the party pay- 
 ing, unless the party paying limits and narrows them.^^ If 
 the payment is made for the honor of a particular indorser, 
 the party paying may sue such indorser, and all parties 
 prior to him Avhom he could have resorted to, but not sub- 
 sequent indorsers, for it stands like a payment made at the 
 request of the indorser, for whose honor it is made, and 
 the payor supra protest narrows and limits his right to 
 recover against them only.^^ But if he pays for honor of 
 the bill generally, it is the same as payment for the honor of 
 the last indorsee, and he may recover against all parties to 
 the bill.«' 
 
 The privilege of payment supra protest is not extended 
 by the law merchant to promissory notes, which are not de- 
 signed for such general circulation as bills of exchange, and 
 the party making such payment acts at his peril.^*' 
 
 § 462. Payor supra protest is subrogated to rights of party 
 for whose honor he pays. — As the party paying supra pro- 
 test becomes substituted, as against parties anterior to the 
 one for whose honor he pays, to the rights and remedies 
 which such party for whose honor he pays would have had 
 against them, had he himself paid, it follows that the right 
 of one wdio pays for the honor of the drawer to sue the 
 acceptor depends upon whether or not the acceptance was 
 
 82Vandewall v. Tyrrell, 1 Moody & M. 87; Chitty on Bills [*508, 
 609], 575. 
 
 83 Chitty on Bills [*509], 576. 
 
 84Mertens v. Withington, 1 Esp. 112; Chitty on Bills [*.509], 577. 
 
 85Fairley v. Roch, Lutw. 891; Edwards on Bills, 441; Byles on Bills 
 [*201], 408. 
 
 86 Byles on Bills [*2621 ; ^^tory on Notes, § 4.5.3.
 
 §§ 4G3, 464. OBLIGATION HAS BKKN DISCHAUGED. 317 
 
 for valiie.**^ In Kii^lan<l it was at iirbl iiciJ liuil he could 
 sue the acceptor, whether he had etiects of the drawer m 
 his hauds or not;"^" but this view was subsequently overruled, 
 and the doctrine of the text estahlished.*'"'* 
 
 § 463. Mode of making payment supra protest. — The party 
 proposing to make such payment goes before a notary public 
 after the bill has been noted for protest (though it is not 
 necessary that the protest should have been formally ex- 
 tended), and makes a declaration for whose honor he makes 
 payment, which declaration should be recorded by the 
 notary, either in the protest or in a separate instrument.^ 
 He must then, in a reasonable time, notify the party for 
 whose honor he j^ays, otherwise such party will not be 
 bound to refund."^ 
 
 § 464. Effect of tender. — Tender made by the acceptor of 
 a bill or maker of a promissory note at maturity discharges 
 the drawer and indorsers absolutely, and stops the accrual 
 of interest, costs, and damages so far as the primary debtor 
 is concerned.'^^ But a tender uuide after maturity, and after 
 the liability of the drawer and indorsers has been fixed by 
 protest and notice of dishonor, will not discharge the obliga- 
 tion, either of the primary or secondary debtors, but as to 
 all alike the tender prevents further accrual of interest and 
 costs. In order to have the effect heretofore stated, the 
 person making the tender must have been not only willing 
 but ready, and not only ready, but must have actually offered 
 to pay.®^ And when a plea of tender is made, it must be 
 pleaded with a profert of the money.'^^ To constitute a 
 
 STByles on Bills [*2G0], 407, 408; Chitty on Bills [*508], 575. 
 
 88 Ex parte Wackerbath, 5 Ves. 574. 
 
 80 Ex parte Lambert, 13 Ves. Jr. 179. 
 
 ooVandewall v. Tyrrell. 1 Moody & M. 87: Geralopulo v. Wieler. 10 
 C. H. G90; Byles on Bills [*2«n, 407; Edwards on Bills, 441. 
 
 01 Wood V. Pugh, 7 Ham. 1G4. 
 
 82 Fitch V. Hammer, 17 Colo. TjOI : Wright v. Robinson & Co., 84 Hun, 
 172. 
 
 9". Otis V. Burton, 10 N. H. 43.3. 
 
 w Caldwell v. Cassidy, 8 Cow. 271; Adams v. Hackcnsack Co., 15 
 Vroom, 638.
 
 318 DEVKxsEs. §§ 465, 4GG. 
 
 legal tciuier, money must have been ottered, and the offer 
 nnist have been absolute and unconditional. 
 
 §465. Bankruptcy and insolvency, laws; power of Congress 
 and of the States to enact. — The Constitution of the United 
 States gives Congress the power " to establish * * * 
 uniform laws on the subject of bankruptcies throughout 
 the United States." Congress at different periods in the 
 country's history has enacted bankrupt laws in accordance 
 Avith llu' provision of the Federal Constitution just quoted, 
 the acts referred to having been enacted in the years 
 1800, 18-11, 18G7, and 1898, respectively. At one time it 
 was contended that the clause of the Federal Constitution 
 giving Congress power to establish uniform laws on the sub- 
 ject of bankruptcy throughout the United States operated 
 to exclude the right of the States to legislate on the same 
 subject, and there are decisions which support that conten- 
 tion, but the Supreme Court of the United States has de- 
 cided that there is no such exclusion, except where the 
 power has actually been exercised by Congress; and subject 
 to the modification just stated, the right of the States in 
 this respect is now well established. In other words, so 
 long as Congress does not exercise its constitutional power 
 in this regard, the States have the right to enact bankrupt 
 or insolvent laws for themselves, and if it should happen 
 that an act on that subject is passed by Congress while 
 State statutes exist, as long as the former continues in force 
 on the statute books, the latter are suspended. 
 
 § 466. Discharge by bankruptcy or insolvency laws. — The 
 right of a debtor to a discharge, when it exists at all, exists 
 only by virtue of the statute enacting the law; and to deter- 
 mine whether, in any case, a debtor has such a right, refer- 
 ence must be had to the statute governing the matter. One 
 of the principal objects of all bankruptcy laws is to dis- 
 charge from liability debtors who arc unable to pay their 
 debts in full. In England, discretionary power is lodged 
 with the courts to grant or refuse an absolute or a con- 
 ditional discharge, while in the United States the courts are
 
 §§ 4G7, 4G8. U111.1GAT10X has been discharged. 31'J 
 
 generally corapellod to discharge the debtor from all lia- 
 bility, once he is adjudi;xMl a hank nipt. 
 
 § 467. Accord and satisfaction. — 'i"hc giving by the maker 
 or acceptor and the acceptance by the holder of some col- 
 lateral thing ill discharge of the instrnment is an accord 
 and satisfaction, and utterly extingnishes the obligation."'' 
 For whatever amounts to satisfaction of a bill or note by 
 the acceptor or maker is satisfaction as to all parties who are 
 collaterally liable. Satisfaction made by one partner of a 
 firm, which are either makers or indorsers, discharges all 
 the partners; and so where a person is partner in two firms, 
 one of which are the makers, and the other indorsers of the 
 note, satisfaction by him discharges both finns.^' If an 
 executory contract is the consideration of another executory 
 contract, both may be mutually rescinded, the giving up one 
 being the consideration for giving up the other.'''^ 
 
 But a contract upon an executed consideration cannot be 
 discharged cither before or after the breach, save by a re- 
 lease, or by satisfaction for a valuable consideration.^^ If 
 the holder of a bill or note renounces his claim and gives 
 up the instrument, the drawer and indorsers are as much 
 discharged as by payment, and he cannot sue the maker or 
 acceptor upon it. And having voluntarily relinquished the 
 evidence of the debt, it may be doubted if he could sue the 
 maker or acceptor at all.^'^ 
 
 § 468. Part payment is ordinarily only payment pro tanto. — 
 A part payment of a bill or note which has fallen due onlv 
 extinguishes it pro tanto, and an agreement that it shall 1 e 
 in full discharge of the debt does not make such part pay- 
 ment anv more effectual as to the residue, there l>eino- n<> 
 sufficient consideration for the discharge of the wdiole.^ 
 
 or. Shade v. Creviston, 93 Ind. 592. 
 
 06 Atkins V. Owens, 4 Xev. & Man. 123. 
 
 07 Kinj; v. (Jillet, 7 M. & W. 55. 
 
 oSByles on Hills [*224, 225], 3G7, 3G8; 2 Parsons on Xotes and Bills, 
 235. 
 
 80 Daniel on Negotiable Instnnnents, § 12SS. 
 
 1 Fitch V. Sutton. 5 East. 230; Bender v. Been, 78 Iowa, 283; Carro- 
 wav V. Odeneal. 56 Miss. 223.
 
 320 DEFENSES. § 4()9. 
 
 But any agreement by way of compromise, or composition, 
 into wliicli any new element entered, would be sustained, 
 and if the claim were disputed, agreement to receive part 
 payment in full would discharge it.^ After a smaller-amount 
 than the existing debt has been accepted in full satisfaction 
 by way of compromise, there is no consideration for a note 
 afterward executed for the amount released by the creditor.^ 
 But if the part pa^anent were before maturity, or were 
 made by a stranger, or Avas made by a bill or note with a 
 surety, or collateral security, or were in any way more ad- 
 vantageous to the creditor, it would suffice to support any 
 agreement based upon it.^ The same rule would apply if a 
 number of notes, some of which were due and some of which 
 were not due, were delivered up for less than face value; 
 and also if the old note were by agreement surrendered up 
 for a new one, the contract then being executed.^ Where 
 suit had been brought on a note, and a compromise was 
 effected, the holder agreeing to indorse on the note a credit 
 of $50, if defendant would pay balance on a certain day, 
 and under this agreement suit was dismissed, it was held, 
 that on failure of defendant to pay the balance the payee 
 might erase the credit given.^ 
 
 § 469. Kelease — A release is technically an instrument 
 under seal, the seal importing a consideration. But the 
 release of a party to a bill or note by any agreement, upon 
 a valuable consideration, is as effectual as if made under 
 seal.^ And it discharges a joint party, and all parties who 
 are subsequent to the one released, and might have looked 
 to him on making payment for reimbursement. It is not 
 
 2Sibree v. Tripp, 15 M. & W. 23; Cumber v. Wane, 1 Stra. 425; Wells 
 V. Morrison, 91 Ind. 62; Murray v. Snow, 37 Iowa, 410. 
 SRasmussen v. State Nat. Bank, 11 Colo. 304. 
 
 4 Bowker v. Childs, 3 Allen, 434 ; Welby v. Drake, 1 Car. & P. 557 ; 
 Hardman v. Bellhouse, 9 M. & W. 596; Lewis v. Jones, 4 B. & C. 506. 
 
 5 Bowker v. Childs, 3 Allen, 434; Draper v. Hill, 43 Vt. 439; Ellsworth 
 V. Fogg, 35 Vt. 255. 
 
 e Chambcrlin v. White, 79 111. 549. 
 
 7 Benjamin v. McConnell, 4 Gilm. 530; Milliken v. Browne, 1 Rawle, 
 391.
 
 §§470,471. OliLlUATlOX HAS BEEN DISCHARGED. 
 
 321 
 
 necessary that the releasor should be the h-jlder of the 
 iustruinent at the time of making the release.* But a re- 
 lease of a drawee before he accepts is no bar to a suit on 
 his acceptance, for it can only operate on existing rights.'*' 
 
 If there is not a technical release under seal, which, as 
 has been said, imports a consideration, no agreement can 
 operate as a release, unless it is upon a sufficient considera- 
 tion.'" A verbal agreement of the payee of a note with the 
 maker to release him, and accept a third party in his stead, 
 who signs in pursuance of such agreement, is upon sufficient 
 consideration, and is valid. 
 
 § 470. Covenant not to sue. — A general covenant not to 
 sue the maker or acceptor will operate as an extinguishment 
 of the debt as to him, and will, of course, operate as a dis- 
 charge of the drawer and indorsers.^- But sueli a covenant 
 does not discharge another who is jointly liable wdth the 
 covenantee;'^ nor will such a covenant not to sue, given by 
 one of two creditors, operate as a release.'* And a covenant 
 not to sue for a limited time will not affect a release as 
 between the parties (though it will discharge the sureties), 
 unless it be stipulated that it may be pleaded in bar.'^ Xor 
 will an agreement not to sue for a limited time discharge the 
 party with whom it is made."^ 
 
 §471. Substitution of another obligation. — The substitu- 
 tion of another debtor, or of another obligation, or of an- 
 other security for the instrument, if the intention of the 
 parties be really to substitute the one for the other, will 
 operate as a discharge of all liability upon the instrument 
 for which the substitute was given. In other w^ords, the 
 
 S Scott V. Lefford, 1 Campb. 24G: Flanagan v. Bro^\^l, 70 Cal. 254. 
 ITartley v. Manton, 5 Q. 15. 247 ; Brage v. Netter, 1 Ld. Raym. 65. 
 lO'Keeler v. Bartine, 12 Wend. 110; Carter v. Zemblin, 68 Ind. 405. 
 
 11 Carpenter v. Murphee, 49 Ala. 84; Lyon v. Aiken, 70 Iowa, 16. 
 
 12 Story on Notes, § 409; Byles on Bills, 384; First Nat. Bank v. Day, 
 C4 Iowa, 120. 
 
 13 Dean v. Newhall, 8 T. R. 1G8; Twopenny v. Young, 3 B. & C. 208. 
 
 14 Walmsley v. Cooper, 11 Ad. & El. 210. 
 
 ICDrage v. Netter, 1 Ld. Raym. 05; Hartley v. Manton, 5 Q. B. 247. 
 ICFord V. Beech, 11 Q. B. 842. 
 21
 
 322 DEFENSES. §§ 472, 473^ 
 
 doctrine of substitution and the legal effect thereof depend, 
 after nil. upon the agreement between the parties, and are 
 govei-ned by the general law of contracts. 
 
 § 472. Set-ofF ; meaning and nature of. — By set-off is meant 
 the discharge of one claun by another, which is " set oif " 
 against it. It was formerly sometimes called " stoppage,'^ 
 because the amount sought to be set off was " stopped " or 
 deducted from the cross-demand. 
 
 Set-off was unknowm to the common law, it being con- 
 sidered inconvenient to try two opposing claims in one suit- 
 But still greater inconvenience arose from disallowing it; 
 and courts of equity first introduced it, the want of it at 
 law being productive of great mischief. 
 
 Set-off has been made the subject of legislation both in 
 England and in most, if not all, of the United States, a 
 statute with reference to the setting off of cross demands 
 having been enacted in Virginia as early as the year 1644. 
 
 In England, and generally in the United States, actions 
 ex contractu are the only suits to which matters of set-off 
 may be pleaded, and they must be actions for definite ascer- 
 tainable amounts. Actions sounding in damages, such as 
 trespass, trover, etc., are not subject to the defense of set- 
 oft', because the sums recoverable are unliquidated; and ac- 
 tions ex contractu for unliquidated damages follow the same 
 rule.^« 
 
 § 473. Its applicability to negotiable instruments. — The 
 doctrine of set-oft" has but a limited application to negotiable 
 paper, it being a distinguishing characteristic of negotiable 
 securities that when they have passed into the hands of third 
 parties for value, no set-off admissible in pleadings between 
 original parties is available. Between the original parties, 
 however, or parties between whom there is a privity — that 
 is, betw^een maker and payee, drawer and acceptor, indorser 
 
 17 Daniel on Nefrotiable Instruments, § 1292. 
 
 182 Parsons on Notes and Bills, 616; Vancleave v. Beach, 110 Ind. 2G9; 
 Gordon v. Brown, 2 Johns. 150.
 
 §§ 474, 47.J. OBLKiATIOX HAS HKKX DIS('IIAK(;KI). 
 
 o • • 
 
 ami iiuiueiliiile indorsee — a set-off may be pleaded to nego- 
 tiable securities as Avell as to any other kind.^** 
 
 g 474. Purchaser of overdue negotiable instrument not sub- 
 ject to set-off that would apply to his transferrer — The rule 
 that a party taking an overdue bill or note takes it subject 
 to the equities to which the transferrer is subject, does not 
 extend so far as to admit set-offs which might be available 
 against the traifsferrer. A set-off is not an equity; and the 
 general rule stated is ([ualified and restricted to those eqviities 
 arising out of the bill or note transaction itself,^' and the 
 transferee is not subject to a set-off which would be good 
 against the transferrer, arising out of collateral matters.'^ 
 
 This ia the English rule on the subject, while in the 
 United States there is a conflict of decisions. In some of 
 the States the English rule, excluding set-offs which existed 
 at the time of the transfer of the overdue paper, is followed. 
 In others such set-offs are admitted.^^ But it seems to be 
 the uniform ruling everywhere, that, although the paper be 
 transferred after maturity, no set-offs between antecedent 
 parties, which arose after the transfer, will be available 
 against the indorsee.^" In some of the States this question 
 is settled by express statute on the subject. In Xew York, 
 for instance, the statute admits set-offs existing at the time 
 of transfer of the overdue note or bill."^ 
 
 The right to plead an equitable set-off is a personal privi- 
 lege of the principal, and does not extend to the surety, 
 unless the defense amounts to total want or failure of con- 
 sideration.''^ 
 
 ^ 475. What discharges a surety; general principles of 
 surety's liability — The acceptor of a bill and the maker of a 
 note, when the acceptance is made or note executed upon a 
 
 19 Daniel on Negotiable Instruments, § 14,35. 
 
 20 Barnes v. JIcMulIins, 78 Mo. 200; Drexler v. Smith, 30 Fed. 958. 
 2iCIiitty on Bills 1*220], 251; Story on Bills, § 220; 2 Parsons on 
 
 Notes and Bills, 00.3, 004. 
 
 22 See cases cited in Daniel on Negotiable Instruments, § 1437. 
 
 23 Davis V. Miller, 14 (hatt. 8. 
 
 24 Edwards on Bills. 200. 
 
 25 0sborn v. Bryce, 23 Fed. 177.
 
 324 DEFENSES. § 47 G. 
 
 valuable consideration, are undoubtedly principals as to all 
 i)io parties thereto. And the drawer of such a bill, and the 
 indorsers of such a bill or note, are sureties of the acceptor 
 or maker to the holder."*' But though all the parties to 
 such a bill are sureties of the acceptor, they are not as be- 
 tween themselves cosureties, liable for contribution to each 
 other in tlie event that anyone should pay the amount for 
 the acceptor; but each prior party is a principal as between 
 himself and each subsequent party. Thus, if the bill were 
 payable to the drawer's order, and accepted, and then in- 
 dorsed by the drawer and two subsequent indorsers succes- 
 sively, to the holder, the drawer and indorsers would be 
 sureties of the acceptor to the holder. But as between the 
 holder and the drawer, the drawer is principal debtor, and 
 the indorsers sureties. As between the holder and second 
 indorser, the second indorser is principal, and the third 
 indorser is surety.^ 
 
 The fact that the liability of the drawer or indorser is 
 fixed by due demand and notice, does not alter their relation 
 as sureties of the debt; it simply fixes their liability as sure- 
 ties for its payment, provided nothing is done by the credi- 
 tor to exonerate them. This view is established by great 
 weight of authority, and may be regarded as settled.^* 
 
 § 476. Whatever discharges acceptor or maker discharges 
 drawer and indorsers. — As a general rule, whatever dis- 
 charges the acceptor of a bill or maker of a note discharges 
 the drawer and indorsers wdio are sureties, for the contract 
 which they undertook to assure thus passes out of existence 
 by the act of the beneficiary. He cannot discharge the 
 party primarily bound for the performance of an engage- 
 ment, and then insist that another shall stand responsible 
 for its performance. Besides, the drawer or indorser, on 
 making payment for the maker or acceptor, Avould be en- 
 
 26 Wallace v. McConnell, 13 Pet. 136; Gunnis v. Weigley, 114 Pa. St. 
 194; Blair v. Bank of Tennessee, 11 Hiimplir. 84. 
 
 27Newcomb v. Raynor, 21 Wend. 108; Bylea on Bills [*236], 379. 
 
 28 Gould V. Robson, 8 East, 576; Bank of United States v. Hatch, G 
 Pet. 250; Hubbly v. Brown, 16 Johns. 70.
 
 § 477. OBI.ICATIOX HAS I5KK.N DISCliAUGED. 325 
 
 titled to the holder's remedies agaiu.sl ium; and if the holder 
 has discharged him from his obligation, the drawer or in- 
 dorser would be remediless and have no resort for reim- 
 hursement."" And whatever discharges a prior indorser dis- 
 charges all subsequent indorsers, for the reason that he stood 
 between them and the holder, and on making payment each 
 one could have had recourse against him, but from which his 
 discharge precludes them.^" It follows from the same reason- 
 ing that discharge of a subsequent indorser can discharge 
 no prior party; for such subsequent indorser could, under 
 no circninstances, be liable to such prior party. ^^ 
 
 § 477. Misrepresentation, duress, diversion, alteration, or 
 tender will discharge surety. — If the surety has been in- 
 duced to become a party to the instrument through any mis- 
 representation or fraudulent concealment of a material fact, 
 his contract is void from the beginning as between himself 
 and all parties privy to such misrepresentation or conceal- 
 ment.^* If the principal signed under duress, the holder 
 guilty of the duress could not enforce the obligation against 
 a surety.^^ If the payee is neither cognizant of, nor partici- 
 pates in the fraud, he is not affected by it."''* Any fraud 
 which deceives the surety after he has become a party re- 
 leases him.^'^ And where a bill is drawn or accepted, or a 
 note made or indorsed for accommodation, with an agree- 
 ment that it shall be used for a particular purpose, any diver- 
 sion in its use operates a discharge of the accommodation 
 party as to all other parties who have knowledge of ?U{di 
 diversion.^'' The suliject of alteration is elsewhere fully 
 
 2ttGunnis v. Weiglcy, 114 Pa. St. 104: Shutts v. Fingar, 100 X. Y. 
 5.30. 
 
 soNewcomb v. Kaynor, 21 Wend. 108; Shutts v. Fingar. 100 X. Y. .5:5!). 
 
 31 Ikxnk of United States v. Hatch. G Pet. 250; White v. Hopkins. .3 
 Watts & S. 99; Lynch v. Reynolds, IG Johns. 41. 
 
 32Melick V. First Nat. Bank, 52 Iowa, 94; Solser v. Brock, .3 Ohio 
 St. 302; North British Ins. Co. v. Lloyd, 10 Exch. 523. 
 
 33Grimth V. Sitgrcaves, 00 Pa. St. IGl. 
 
 34 Anderson v. Warne, 71 111. 20. 
 
 35 Harris v. Brooks. 21 Pick. 122. 
 
 36 Dewey v. ( '(uliniii, -1 .Tones. Is J: 1 I'nr-or,- nn Xotes and Bills. 236.
 
 ;3iG DEFENSES. § 478. 
 
 treated.^^ And, as lias been seen, a tender of payment made 
 iit tlio maturity of tlie instrument discharges tlie drawer and 
 indorsers.^^ 
 
 § 478. Parting with security discharges surety. — Upon 
 making payment of the debt, the surety is undoubtedly en- 
 titled to all the rights, remedies, and securities which the 
 creditor could have enforced.^'"^ And while the creditor may 
 not only abstain from active measures, but may even relin- 
 quish steps already commenced,'*" he must do nothing which 
 can impair the rights and remedies of the surety. There- 
 fore, if any collateral security which the creditor held be 
 released, or a judgment lien given up, or a levy withdrawn, 
 the surety is discharged.'*^ But the withdrawal of an exe- 
 cution from the hands of the sheriff before a levy will not 
 discharge the surety. ISTor will an omission to revive a 
 judgment, by means of which the lien and the land are lost ; 
 nor discontinuance of steps to foreclose a mortgage.^" But 
 neglect to record a mortgage, whereby its value is lost, 
 would discharge the surety, and this even though the original 
 mortgage would have been worthless, if recorded, by reason 
 of prior liens.^^ 
 
 But tlie surety will not be discharged in any case where 
 it can he clearly proved that the act of the creditor has 
 worked no real injury. And he is discharged only to the 
 extent that he would be injured if held bound. ^^ Thus with- 
 
 37 Ante, §§ 427-443. 
 
 38 Ante, § 4G4. 
 
 ' "OTreanor v. Yingling, 37 Md. 491; King v. Baldwin, 2 Johns. Ch. 317; 
 Humphrey v. Hitt, 6 Gratt. 509. 
 
 40 Bellows V. Lovell, 5 Pick. 307; Lawson v. Sayder, 1 Md. 171; Mont- 
 pelier Bank v. Dixon, 4 Vt. 399. 
 
 4iShutts V. Fingar, 100 N. Y. 539; Allen v. 0"Donald, 23 Fed. 573; 
 •Commonwealth v. Haas, 16 Serg. & R. 252; Mayhew v. Boyd, 5 Md. 102. 
 
 42 Lenox v. Prout, 3 Wheat. 520; Humphrey v. Hitt, 6 Gratt. 509; 
 Farmers' Bank v. Picynolds, 13 Ohio, 84; Butler v. Gambs, 1 Mo. App. 
 400. 
 
 43 BaiT V. Boyer, 2 Xebr. 205; Atlanta Nat. Bank v. Douglass, 51 Ga. 
 205. 
 
 44 Payne v. Commercial Bank, 6 Smedes & M. 24; Neff's Appeal, 
 Watt.5 & 8. 36.
 
 g' 
 
 §§ 479, 480. OBLIGATION HAS BEEN DlSCllAHGED. o2l 
 
 drawal of a levy on property only entitles the surety to a 
 credit for the value of the property levied on."*'"' 
 
 § 479. Extension of time will discharge surety. — The prin- 
 ciple that whatever discharges the principal discharges the 
 surety is of extended application, and it is operativ.e when- 
 ever anything is done which relaxes the terms of the exact 
 legal contract by which the principal is bound, or in anywise 
 lessens, hnpairs, or delays the remedies which the creditor 
 may resort to for its assurance or enforcement. For, when- 
 ever the creditor relaxes his hold upon the principal debtor, 
 he impairs the hold upon him which the surety would ac- 
 quire by substitution in his place on making payment; and 
 _ood faith and fair dealing require that the surety should 
 not be exposed to the injuries which might thus be inflicted 
 upon him."'" In the immense majority of cases the act done 
 does not actually damage the surety a shilling, yet the doc- 
 trine is so firndy established that only legislative enactment 
 can change it.^^ 
 
 Extension of time for payment is the most frequent form 
 in which the creditor so deals with the principal as to dis- 
 charge the surety; and whenever such indulgence is granted 
 in pursuance of a binding legal contract, the surety is at 
 once released from his obligations.^** And the same effect 
 follows (the discharge of the surety) if time is given to one 
 of the joint makers of a note of which the surety is m- 
 dorser.^^ If the creditor takes a time draft, or a renewal 
 note from the principal, the presumption is that right of 
 action is suspended, and time of payment extended to its 
 maturity, and an indorser of the original bill or note is 
 thereby ]iresumptively discharged. '^^ 
 
 § 480. Elements in indulgence necessary to discharge surety. 
 — The follo^\•inf>: elements or circumstances must unite in 
 
 •»o Ward V. Vass. 7 Loifjh, 13.5. 
 
 40 Daniel on Negotiable Instruments, § 1312; Thompson on Bills, 390. 
 47 Swire v. Redman. 1 Q. B. Div. .53fi. 
 
 48Siebeneck v. Anchor Sav. Biink, 111 Pa. St. 1S7: Parmelee v. Wil- 
 liams, 72 Ga. 43: Shntts v. Fingar. 100 X. Y. r)30. 
 49 story on Notes, § 414. 
 eopomeroy v. Tanner, 70 N. Y. .547; Buck v. Smiley, 04 Ind. 431.
 
 328 DEFENSES. § 481. 
 
 order to constitute an indnlgence Avlncli will discharge the 
 surety : (1) A valid consideration, for without it the promise 
 would not be binding. (2) A promise or agTeement to in- 
 dulge, for without it the hands of the creditor are not tied, al- 
 though he may have received collateral security for the debt. 
 (3) The promise must not be altogether indefinite, for an in- 
 definite promise of forbearance is void and nugatory, since it 
 might be for an hour, which would be of no advantage to the 
 debtor. (4) The indulgence must be without the surety's as- 
 sent, for if he assents he is a party to it. (5) The indulgence 
 must be without reservation of remedy against the surety, 
 for that would reserve the surety's recourse on his principal. 
 (6) The agreement must be with the principal, and not with a 
 stranger.^^ 
 
 SECTION V. 
 
 STATUTE OF LIMITATIONS. 
 
 § 481. Part payment by joint maker, joint and several 
 maker, or cosurety. — In the chapter on "Actions,'' the sub- 
 ject of the statute of limitations, with special reference to 
 the obligation of the principal debtor, was disposed of.^^ 
 The problems presented when only one debtor is involved 
 are not difiicult of solution, whether the answer to the plea 
 of the statutory bar is a new promise or a partial payment; 
 but wdien the new promise or partial payment was made by 
 one of two or more joint or joint and several makers or 
 by a cosurety, and it is sought to hold a party other than 
 the new promisor or the one making tlie partial payment, 
 the questions presented are much more complex. There 
 are many authorities which sustain the view that the statu- 
 tory bar is removed upon the principle of mutual agency;''" 
 
 i"'! Daniel on Negotiable Instruments, § 1315. 
 
 52 See ante, §§ 414, 415. 
 
 BSWhitcomb v. Whiting, 2 Doug. 652; Sheply v. Waterhouse, 22 Me. 
 497; Woonsoeket Inst, for Sav. v. Ballou, 16 R. I. 351, 16 All. 144; 
 Elliott V. Nichols, 7 Gill, 85; Schindel v. Gates, 46 Md. 604, 24 Am. Rep. 
 526; Turner v. Ross, 1 R. I. 88; Perkins v. Barstow, 6 R. I. 505; Car- 
 penter V. McLaughlin, 12 R. I. 270, 34 Am. Rep. 638; Joslyn v. Smith, 
 13 Vt. 353; Bissell v. Adams, 35 Conn. 299.
 
 §482. STATUTI-: OK LIMITATIOXS. o^O 
 
 "but the cases to the contrary are ahinjst, if not quite, as 
 numerous.'^ The better view, upon sonnd principle, seems 
 to be that if the obligation be joint, the payment will extend 
 the statutory limitation, but if it be joint and several, it 
 will not. 
 
 If one of two or more sureties make a payment upon the 
 obliffation before it is barred bv the statute of limitations, 
 such surety may maintain an action against his cosurety or 
 cosureties for contribution after the bar of the statute a- 
 to the original obligation is complete, upon the principle 
 that the right of action accrues only from the date of the 
 ])ayment by him.^^ 
 
 § 482. Part payment by indorser or other surety. — A part 
 payment made by an indorser does not prevent the bar of 
 the statute as against the maker.^" On the other hand, a 
 part payment by the maker will not render the indorser 
 liable, but a payment by the princi]ial will bind his surety."^ 
 But there are decisions which hold that if the note be i 
 joint one of a ])rincipal and surety, a part payment by the 
 principal w\\\ not bind the surety.^^ A payment made by a 
 surety will not revive a note already barred l)y the statute 
 of limitations as against the principal.^^ 
 
 54 Hallenbach v. Dickinson, 100 111. 427, 39 Am. Eep. 47; Shoemaker v. 
 Benedict, 11 N. Y. 170, (52 Am. Dec. 9.5, note: Bell v. Monison, 1 Pel. 
 012; Steele v. Soule, 20 Kan. 39; Coleman v. Forbes, 22 Pa. St. 1.56, 00 
 Am. Dec. 75 ; Lowenthal v. Chappell, 8 Ala. 353. 
 
 55McCrady v. Jones, 44 S. C. 406, 22 S. E. 414; Singleton v. Town- 
 send, 45 Mo. 37; 2 Parsons on Notes and Bills. 254, § 7; Brandt on 
 Suretyship, § 259, and notes. 
 
 5C Byles on Bills and Notes, 358 ; Harding v. Edgecumbe, 28 L. J. Exch. 
 313; Randolph on Commercial Paper, 1629. 
 
 •'■'"Hunter v. Robertson, 30 C.a. 479; \^'oodhouse v. Simmons, 73 N. C. 
 .30; Wyatt v. Hodson. 8 Bing. 309; Hunt v. Bridgham, 2 Pick. 581; Zent 
 V. Hart, 8 Pa. St. 337; .Toselyn v. Smith. 13 Vt. 353; Glick v. Crist, 37 
 Ohio St. 388; Smith v. Caldwell, 15 Rich. 305. 
 
 SSGoudy V. Cillam. Rich. 2S : Faulkner v. Bailey. 123 :Mass. 588; 
 Burleigh v. Stott. 8 B. & C. 30. 
 
 59 Jones V. Jones, 23 Ark. 212; Riindolph on Commercial Paper. 1G29. 
 But see coHtni, XNhijjple v. Stevens, 22 N. H. 219.
 
 CHAPTER XTI. 
 
 CONFLICT OF LAWS. 
 
 § 483. Importance of subject. — 'No treatise, however brief, 
 on the subject of negotiable instrnments, and especially with 
 reference to actions thereon and defenses thereto, would 
 be complete without a general summary of the law that gov- 
 erns and controls. Of all kinds of contracts, there is none 
 other (piite so perambulatory as negotiable instruments. 
 One of the very jDurposes of the law merchant is to relieve 
 all negotiable contracts of luggage, and thus, so to speak, 
 to encourage them to travel without regard to State or 
 national boundary lines. It not infrequently happens, there- 
 fore, that a negotiable contract is made in one jurisdiction, 
 payable in another, and indorsed in still another; and when 
 it is considered that every indorsement is a new, separate, 
 and independent contract, the question as to what .law gov- 
 erns as to each and every of the contracts that may be en- 
 tered into and built upon the original obligation becomes a 
 subject of peculiar importance. And it should also be remem- 
 bered that each one of the United States is, in contemplation 
 of its own and of the Federal Constitution, a distinct and 
 independent sovereignty, with its own peculiar code of laws 
 and system of judicature. And while, in the aggregate, 
 they compose one integral confederacy, which is itself an 
 indeiDendent nation, paramount in certain respects to the 
 States, in all other respects the States retain their separate 
 autonomies, and are deemed as much foreign to each other 
 as if not in anywise associated together. The regulation of 
 contracts comes peculiarly within the province of the States, 
 and, therefore, contracts between citizens of the different 
 States, while they may be enforced by process in the Fed- 
 eral courts, nevertheless are to be construed and effectuated 
 not by a general system of laws which overspread the whole 
 country, but in accordance with the principles of interna- 
 
 [3.301
 
 g 484. CONFLICT OF LAWS. 331 
 
 tiouiil law whicli govern transactions botwecu parties of 
 different nations. 
 
 § 484. General principles — The fulLnving- may be re- 
 garded as established: 
 
 (1) Every contract is in respect to its formalities and 
 authentication to be regulated by the laws of the State or 
 country in which it is entered into; and it is also regulated 
 by the laws of the State or country in which it is made, in 
 respect to its nature, validity, interpretation, and cifect, 
 except when it is to be perfonned in another State or 
 country. 
 
 (2) When a contract is made in one State or country 
 t(< be performed in another State or country, it is to be 
 regulated by the laws of the place of perfornumce, without 
 regard to the place at which it was written, signed, or 
 dated, in respect to its nature, validity, interpretation, and 
 eifect. 
 
 (3) In determining the place where a contract is made, 
 the place where it was delivered, as consummating the bar- 
 gain, controls; and not the place where it was written, signed, 
 or dated. 
 
 (4) If a party contracts while in iransitu,, and with- 
 out identity with any other place, the place of his domicile 
 is deemed the place of the contract. 
 
 (5) If a contract be illegal and void at the place where 
 it is made, it is void everywhere. 
 
 (G) The laws of a State or country have no extra- 
 territorial force, propriu figure; and are only executed by 
 other States and countries from considerations of courtesy 
 cr policy, termed the comity of nations. 
 
 (7) The laws of a State or country being only exe- 
 cuted in another by comity, they will be executed only so 
 far as they may be consistent with religion, good morals, 
 and with the public rights and interests of the State or 
 country in whicli the remedy is sought. 
 
 (8) The courts of a State or country cannot take 
 judicial notice of the laws of a foreign State or countrv;
 
 332 CONFLICT OF LAWS. ^§ 485, 486. 
 
 and when sucli laws are songht to he applicnl, they must be 
 alleged and proved. 
 
 (9) The law of the place where suit is brought, the 
 lex fori, as it is termed, regulates the form of the action 
 and the nature and extent of the remedy.^ 
 
 § 485. The comity of nations. — It results from the prin- 
 ciple that the laws of a country have no binding force be- 
 yond its own boundaries, that the appeal for their enforce- 
 ment addresses itself entirely to the comity and discretion 
 of the forum in which suit is brought. That comity is 
 freely exercised by civilized countries, which look for and 
 receive reciprocal courtesies from other nations; and the 
 close relations of the several States of the Union with each 
 other, the family likeness of their institutions, and the homo- 
 geneity of their people, are powerful incentives to the ex- 
 ercise between them of a comity peculiarly liberal and ex- 
 pansive." But, nevertheless, a State must be just before it 
 is generous; and therefore no State should exercise comity 
 in favor of contracts which violate its own laws, or the law 
 of nature, or the law of God.'' It must consult sound morals 
 and the interests and public policy of its own people, and 
 if to enforce the law^s of another State or country would 
 lead to their infringement, it would he, treacherous to its 
 own duties to lend aid to their execution.^ 
 
 SECTION I. 
 
 LEX LOCI CONTRACTUS. 
 
 §486. To what extent lex loci contractus governs. — The 
 rule is of general acceptation that the law of the place w^here 
 the contract is made reg-ulatcs the formalities of its execu- 
 tion and authentication and the consideration necessary to 
 
 1 Daniel on Nef(otial)le Instruments, § 805. 
 
 2 Tjathrop v. Conimercial Bank, 8 Dana, 118. 
 •"- Forbes v. Cochrane, 2 B. & C. 448. 
 
 4 Armstrong v. Toler. 11 Wheat. 258; Pearsall v. Dwight, 2 Mass. 84; 
 Daniel on Negotiable Instruments, § 866.
 
 § 487. LEX LOCI COXTRACTL-S. 333 
 
 its validity; and also regulates its interpretation, nature, 
 obligation, and effect.^ If formally executed upon a legal 
 consideration there, it is valid everywhere;*' and if defective 
 there in either respect, it is invalid everywhere.^ By inter- 
 l)retation of the contract is meant the ascertainment of the 
 true meaning and intention of the parties. This becomes 
 a matter of substantial moment when it is remembered that 
 the same words are frequently used with diiferent signitica- 
 tions in different communities, and import different obliga- 
 tions. It follows that the interpretations placed upon them 
 must be according to the signification and effect attached 
 to them in the State or country in which the contract is 
 made* otherwise the intention of the parties will be de- 
 feated, instead of effectuated. Thus, by the word " month " 
 is sometimes meant a lunar, and sometimes a calendar month, 
 and if it were used in a contract entered into in a foreign 
 State or country, evidence would be admissible to show 
 in what sense the term was there understood. So the word 
 " pounds " when employed in England would means pounds 
 sterling; while in the United States it would mean pounds 
 in American currency, which is a fourth less in value.** 
 
 § 487. Nature and obligation of the contract ; meaning of. — 
 By the nature of the contract is meant those qualities which 
 pertain to it. Thus, whether it be joint or several, or joint 
 and several; whether absolute or conditional; whether of 
 principal or surety; whether personal or real, are points 
 which concern the nature of the contract, and are to be 
 •governed by the law of the place at which it is entered into. 
 This is well illustrated in an English case, where suit was 
 brought in England upon a bill accepted at Leghorn, where 
 the law is, that if the acceptor have not in his hands suffi- 
 cient funds of the drawer, and the drawer then fail, the 
 
 r.King V. Sania, G9 N. Y. 24; Evans v. Anderson, 78 111. 558; Arnien- 
 diaz V. Sana, 40 Tex. 291. 
 
 Andrews v. Pond. 1,3 Pet. 65; Fant v. Miller, 17 Gratt. 47. 
 7Pearsall v. Dwifrht. 2 Mass. 84; Kanaka v. Taylor. 7 Ohio St. 134. 
 s Daniel on Negotiable Instruments, § 871.
 
 33-i CONFLICT OF LAWS. § 488- 
 
 acceptance is tliereupon vacated. It was held that the law 
 of Leghorn should prevail/'' 
 
 By obligation of the contract is meant the legal existence 
 or nonexistence of a promise to pay, and the extent thereof. 
 For instance, if by the law of the country where the contract 
 is made the legal effect is to bind the rem (i. c., land mort- 
 gaged), and not to create a personal obligation, the law of 
 that jurisdiction will govern. Again, the question whether 
 or not the promise or obligation is primary or secondary, 
 absolute or conditional, is governed by the lex loci contractus. 
 Following that principle, the extent and character of the 
 obligations of sureties, indorsers, and guarantors are fixed 
 and determined. ^° 
 
 § 488. What constitutes place of execution ; presumptions. — 
 The place where a contract is made depends not upon the 
 place where it is written, signed, or dated, but upon the 
 place where it is delivered as consummating the bargain.^^ 
 Thus, the law of the place where a bill or note is written, 
 signed, or dated does not necessarily control it, but the law 
 of the place where it is delivered from drawer or maker 
 to payee, or from indorser to indorsee. A note drawn and 
 dated in Maryland, but delivered in Xew York, in payment 
 of goods there purchased, or money loaned, is payable in 
 and governed by the laws of iSTew York.^^ And if a note 
 be dated and signed in blank in Virginia, and sent to Mary- 
 land, and there filled up and negotiated, it is a Maryland, 
 and not a Virginia, note.^^ 
 
 It should be further observed that where the parties ac- 
 quiring a bill for value, and in the usual course of business, 
 have no knowledge that it was not issued and delivered as 
 a subsisting instrument at the place where it bears date, it 
 
 9 J)aniel on Negotiable Insti-uments, § 872; Burrows v. Jemimo, 2 Stra. 
 733. 
 
 10 Daniel on Negotiable Instruments, § 873. 
 
 n Freese v. Brownell, 35 N. J. L. 286; Lawrence v. Bassett, o Allen,. 
 140. 
 
 12 Cook V. Moffat, 5 How. 295; Hyde v. Goodnow, 3 X. Y. 26G. 
 
 13 Fant V. Miller, 17 Gratt. 47.
 
 §§ 489, 41i0. LEX LOCI CONTRACTUS. 335 
 
 is but just that they should he entitled to regard its osten- 
 sible as its real character, and should at least not be per- 
 mitted to suffer by reason of the after-discovered fact that 
 it was not there delivered." In the absence of evidence to 
 the contrary, it will be presumed that a note was executed 
 and delivered at the place where it bears date.^° 
 
 § 489. Lex domiciliae. — After all, the question as to what 
 law governs in the interpretation, construction, etc., is one 
 of intention; and if the instrument does not specify the 
 place of payment or execution, the domicile of the maker or 
 acceptor may be invoked for the sole purpose of ascertaining 
 the intention of the parties as to the place of execution. 
 If one be a sojourner in a State or country other than his 
 home or place of domicile, and the instrument does not 
 specify the place of performance, the law presumes that 
 the lex domiciles determines the loci contractus. In other 
 words, that the contract was made and intended to be per- 
 formed at the place of residence of the obligor, and that 
 such place, ]n-esumably being the place where the contract 
 was made, will govern in the construction of the instrument, 
 the formalities of its execution, and the nature and char- 
 acter of the obligation entered into. As has been indicated, 
 however, this is a mere presumption, which may be rebutted 
 by the circumstances attendant upon the execution of the 
 contract, cr by the nature of the transaction out of which 
 the contract grew. Thus, if it were a debt for board at a 
 hotel, or articles of personal subsistence or necessity, it 
 would be payable by usage before the sojourner left the 
 place, and therefore payable there, and controlled by its 
 lawp.^'' 
 
 § 490. Lex loci solutionis ; exception to rule. — But the 
 law of the place where the contract is made yields in certain 
 respects to that of the place of performance; for it is in 
 
 i-t 1 Parsons on Notes and Bills, 'u : Quaker City Bank v. Showacre. 
 26 W. Va. 52; Nat. Bank v. Rnioot. 1 MacArth. 371. 
 
 15 Parks V. Evans, 5 Del. 576. 
 
 ifi Daniel on Negotiable Tn-truments, § 876; "Wliarton on Conflict of 
 Laws. §§ 414-416. 426.
 
 33G CONFLICT Oh' LAWS. § ^'^1. 
 
 view of, cond in reference to, the laws of the place of pcr- 
 fonnance, that it is to be presumed the terms of the con- 
 tract were selected, and its stipulations entered into." " The 
 general principle as to contracts made in one place to be 
 performed in another," says Chief Justice Taney, " is well 
 settled. They are to be governed by the law of tlie place of 
 perfonnance." ^'^ Thus, in Massachusetts, a note payable 
 to A. or order at any or either bank in a city, is negotiable ; 
 but if such a note were made in Massachusetts, and were 
 payable in Virginia, it would not be negotiable, because 
 not payable at a particulai" bank, as the Virginia statute 
 requires.'^ Where a part of the contract is to be performed 
 ill one country, and a part in another, each part is to be 
 governed by the law of the place where it is performable.^^ 
 And whenever it is alleged that a bill is payable by the 
 acceptor, or a note by the maker, at a place different from 
 that at which such acceptance or making took place, it is 
 necessary to show it, either by the express language of the 
 instrument itself, or by intendment and construction of law 
 arising from the attendant circumstances. And if the note 
 be dated at a particular place and payable generally — that 
 is, without designation of a particular place — the law at- 
 taches to it the presumption that it is to be paid where 
 luade.^^ So it is to be presumed that an acceptance of a 
 bill, naming no place of payment, is to be paid where made ; 
 and the address of the drawee generally indicates where such 
 place of acceptance is.^ 
 
 §491. Lex loci rei sitae; further exceptions. — Of course 
 real estate is controlled, in respect to the validity and form 
 of the conveyance, by the lex loci rei sitce — that is, by the 
 
 17 Andrews v. Pond, 13 Pet. 65; Pierce v. Indseth, 106 U. S. .546; 
 Shoe & Leather Nat. Bank v. Wood, 142 Mass. 567. 
 
 18 Andrews v. Pond, 1.3 Pet. 65. 
 
 19 Freeman's Bank v. Ruckman, 16 Gratt. 126. 
 
 20 Pomeroy v. Ainsworth, 22 Barb. 118; Young v. Harris, 14 B. Mon. 
 556. 
 
 21 Wilson V. Lazier, 11 Gratt. 477: Thompson v. Ketchum, 8 .Johns. 189. 
 
 22 Todd V. Bank of Kentucky, 3 Bush, 626.
 
 § 492. LEX LOCI CONTRACTUS. 337 
 
 law of the place where it is situated. But the question has 
 been much litigated in the United States, as to what law 
 ajjplies when a mortgage is given as security for a loan, and 
 the mortgage is in one State, and the place of payment of 
 the loan in another. " The true test is, was the mortgage 
 merely a collateral security, the money being employed in 
 another State^ and under other laws, or was the money 
 employed on the land for which the mortgage was given? 
 If the former l)e the case, then the law of the ])lace where 
 the money wa's actually used, and not that of the mortgage, 
 ap})lies.^"^ If the latter, then the law of the place where 
 the ULortgage is situate must prevail." "^ Where money 
 was borrowed, and the note made payable in Xew York 
 but dated in Xebraska, where a mortgage to secure it was 
 executed on land, the mortgage was held to be a mere in- 
 cident of the loan, and the transaction being usurious by 
 New York law, it was held void.^^ In Xew Jersey the court 
 refused to enforce a contract in New York secured by a Xew 
 Jersey mortgage on real property in that State, the contract 
 being opposed to the policy of the Xew Jersey statutes 
 proliibiting stock gambling,^'' 
 
 § 492. By what law liability of maker, acceptor, drawer, and 
 indorser determined. — The liabilities of the maker and ac- 
 ceptor, respectively, of a note and bill of exchange are con- 
 trolled by the law of the place where the obligation is en- 
 tered into.^" The contract is deemed to have been made 
 with reference to the law of such place, and hence the lex 
 loci contractus will control the obligation. The contract of 
 the drawer of a bill or of the indorser of any negotiable 
 contract is also to be determined and intei-preted by the 
 lex loci contractus — that is to say, by the law of the place 
 
 23 De Wolf V. Johnson, 10 Wheat. 38.3; Kennedy v. Kni^rht, 21 V.'is. 
 340; Davis v. C'lemson, McLean, 022. 
 
 24 Wharton on Conflict of Laws. S ^lO; Arnold v. Potter, 22 Iowa, 
 194; Cliapman v. Robinson, 6 Paige, 627. 
 
 25 Sands v. Smith, 1 Nebr. 108. 
 2«Flafrp V. Baldwin, 11 Stew. 219. 
 
 27 Daniel on Negotiable instruments, §§ 895, 896. 
 
 90
 
 338 CONFLICT OF LAWS. § 492. 
 
 where the bill was drawn or the contract indorsed. Thus, 
 if a merchant in Xew York draw a bill on another in Rich- 
 mond, A^irginia, requiring him to pay a certain amount with- 
 out specifying any place of payment, the drawee will, if he 
 accepts, be bound to pay the amount in Richmond, that 
 being implied by the address of the bill to him at that place. 
 But it does not follow that the drawer would be himself 
 bound to pay the amount of the bill in Richmond in the 
 event of dishonor for nonpayment by the acceptor.^^ His 
 undertaking is not to pay it in Richmond himself, but a 
 guaranty that it (the bill) shall be paid there by the drawee, 
 and a further undertaking that if not so paid by the drawee, 
 he will pay the amount in ISTew York, provided the bill be 
 duly presented, and he has received due notice of its dis- 
 honor. In other words, the drawer of a bill does not bind 
 himself to pay it specially where the acceptor is impliedly 
 or expressly called on to pay it; but his contract is to pay 
 generally, and is consequently construed to be a contract 
 to pay at the place where the bill is drawn. ^'^ The same prin- 
 ciple, as thus illustrated, is equally applicable to the con- 
 tract of indorsement. As has been stated, an indorsement 
 constitutes a wholly new, separate, and independent obli- 
 gation, and as such the party that enters into it must be 
 taken to have contracted with reference to the law of the 
 place where it was entered into, just as unequivocally as the 
 maker of a promissory note or the acceptor of a bill of ex- 
 change. This doctrine, that the drawer and indorser are 
 bound according to the law of the place of drawing or in- 
 dorsing, although sustained by great weight of opinion and 
 an overwhelming current of authorities, has not escaped 
 criticism and dissent. ^"^ 
 
 28 Daniel on Negotiable Instruments, §§ 898, 899. 
 
 20 Bank of United States v. United States, 2 TIow. 711; Freese v. 
 Brownell, .35 N. J. L. 286; Everett v. Vendryes, 1!) N. Y. 430. 
 30 See Daniel on Negotiable Instruments, §§ 899-902.
 
 §§ 493, 494. LEX FOKi. 339 
 
 SECTION 11. 
 
 LEX FOKI. 
 
 §493. General principles.— It is a settled principle of law 
 that the renietlies for breach of any contract must be pur- 
 sued according to the law of the place where suit is brought. 
 Those remedies are devised by the State in consonance with 
 its own views of justice, public, policy, and convenience; 
 and comity does not require that it should depart from the 
 courses of procedure which it applies to its own inhabit- 
 ants, and extend greater or different privileges to strangers."*^ 
 The foreigner who sues must take the law as he finds it.^^ 
 
 This doctrine extends to the determination of (1) the 
 parties who may sue and be sued; (2) the time within which 
 suit may be brought; (3) the form of action; and (4) the 
 nature, effect, and extent of the remedy applied. 
 
 § 494. Who may sue. — Who may sue is generally a ques- 
 tion of the remedy; and the mere designation of the plain- 
 tiff is always made by reference to the lex fori. And as a 
 general rule, if allowed by the lex fori, an assignee may 
 sue in his own name, although he cannot so sue at the place 
 of the assignment. ^"^ And if not allowed by the lex fori, he 
 cannot sue in his own name, although he might do so at 
 the place of assignment.^"* But we think this doctrine 
 should not be pushed farther than to indicate the mere nomi- 
 nal parties to the suit when it is purely a question of remedy. 
 Thus, if a note were non-negotiable in Virginia, and could 
 not be there indorsed or assignied, yet if negotiable and ac- 
 tually indorsed in Kentucky, so as to completely vest title 
 in the indorsee, the holder would then have an absolute 
 right to recover the amount, and the lex loci contractus 
 
 31 Bank of United States v. Donally, 8 Pet. 372; Scoville v. Car^eld, 
 14 Johns. 3:^8; Wharton on Conflict of Laws, § 747. 
 
 32 De la Vefra v. Vianna, 1 B. & Ad. 284. 
 
 3.! Foss V. Nuttinfr. 14 Gray. 4S4: Wharton on Conflict of Laws, § 4.")7. 
 34Fisk V. Brackett, .32 Vt. 708; Wharton on Conflict of Laws, § 735; 
 2 Parsons on Notes and Bills, 368.
 
 340 CONFLICT OF LAWS. §§ 495, 49 G. 
 
 ghoiild govem.^'^ So if by the law of the pLace of transfer, 
 an executor or administrator may indorse or assign a note, 
 so as to vest title and right to sue completely in his trans- 
 feree, the latter should be permitted to sue anywhere.^*^ 
 This is due to a liberal comity. But the authorities pre- 
 dominate in number the other way.^^ 
 
 § 495. Time within which suit may be brought. — The time 
 within which suit may be brought is j^urely a question of 
 the forum. Thus suit may be brought immediately in one 
 State by attachment, although at the time no action would 
 lie in the State where the cause of action arose.^® And in 
 like manner the statute of limitations of the forum pre- 
 vails; and no suit can be maintained if it be barred there, 
 although by the law of the contract there was no limitation, 
 or a less restricted limitation. ^^ And suit may be main- 
 tained where the limitation of the lex fori has not attached, 
 although by the lex loci contractus action has been formally 
 barred.'**^ This doctrine rests upon the ground that the time 
 of suit is purely a matter for local municipal regulation. 
 It may be different in cases where the right, in contradis- 
 tinction to the remedy, is held by foreign law to be ex- 
 tinguished. Such extinction might oj)erate by comity 
 everywhere. ^^ 
 
 § 496. Form of action, remedy, and questions of evidence. — 
 The necessit}^ of selecting the form of action according to 
 the law of the forum has been well illustrated in the 
 United States in a number of cases where the instrument 
 
 35 Lee V. Selleck, 33 X. Y. G15; Story on Bills, § 173; Trimbey v. Vig- 
 mer, 1 Bing. N. C. 159. 
 
 30 Harper v. Butler, 2 Pet. 230; Owen v. Moody, 29 Miss. 79; Bar- 
 rett V. Barrett, 8 Greenl. 353. 
 
 37 Goodwin v. Jones, 3 Mass. 514; Thompson v. Wilson, 2 N. H. 291; 
 etcams V. Burnham, 5 Greenl. 261. 
 
 38 Clark V. Conner, 2 fStrobh. 346; 1 Rob. Pr. 317. 
 
 39 Mineral Point R. Co. v. Barron, 83 111. 307; Nicolls v. Rodgers, 2 
 Paine C. C. 437 ; Jones v. Hook, 2 Rand. 303 ; British Linen Co. v. Druni- 
 mond, 10 B. & C. 903. 
 
 40 Power V. Hathaway, 43 Barb. 214; Bulger v. Roche, 11 Pick. .30. 
 
 41 Williams v. Jones, 13 East, 439.
 
 g 490. Liix i-oia. 341 
 
 sued upon was cleemeJ a specialty where made, and a sim- 
 ple contract where the suit was brought, or vke versa. 
 Thus, in some of the States a scroll attached to the prom- 
 isor's name is the same as a common-law seal; and cove- 
 nant or debt would be the proper remedy in the State where 
 the promise was made, assumpsit not lying on a sealed in- 
 strument. And, moreover, by the local law the defend- 
 ant could not plead want of consideration, because of the 
 instrument being sealed. But if suit were brought in a State 
 where a scroll is not recognized as a seal, it has been re- 
 peatedly held, that assumpsit would be the proper remedy, 
 and that want of consideration might be pleaded.'*" And 
 the converse has been also held, that although where made 
 the instrument might be a simple promissory note, yet if 
 where suit was brought it was regarded as a specialty, the 
 appropriate action of debt or covenant should be brought^ 
 and the sanctity attached to seals would be imputed to it.^* 
 At one time it was held that the extent of the remedy was 
 to be determined by the law of the place of contract, and 
 where suit was brought in England upon a French contract, 
 upon which by the laws of France no arrest could be made, 
 it was held that the defendant could not in England be 
 held to bail;"*"* but the contrary doctrine is now well settled. 
 (Questions of evidence appertain to the remedy, and con- 
 sequently are controlled by the law of the forum. "Whether 
 a witness is competent or not; whether a certain matter 
 requires to be proved by writing or not; whether certain 
 evidence proves a certain fact or not — this is to be deter- 
 mined by the law of the country wdiere the question arises, 
 where the remedy is sought to be enforced, and where the 
 court sits to enforce it," is the language of Lord Brougham.'*'' 
 It follows that the Jex fori undoubtedly applies to the com- 
 
 "*2 Bank of United States v. Donally, 8 Pet. 361 ; Le Roy v. Beard, 8 
 How. 451 ; Warren v. Lynch, 5 Johns. 239. 
 4:5 Thrasher v. Everhart, 3 C.ill & J. 319. 
 
 44 De la Vofia v. A'ianna, 1 B. & C. 284; Peck v. Ilozier, 14 Johns. 346; 
 Ilindley v. Marean, 3 !Mason, 90. 
 
 45 Bain v. ^\niitehavpn. etc., R. Co., 3 H. L. Cas. 1: Wharton on Con- 
 flict of Laws, § 708; Story on Conflict of Laws, § 63.j.
 
 342 CONFLICT OF LAWS. §§ 497, 498. 
 
 petency and credibility of witnesses, but not as to the num- 
 ber of attesting witnesses necessary to the vahdity of a 
 writing.*** 
 
 § 497. Whether party is bona fide purchaser for value. — So 
 the eifect of the transaction in fixing the relations of the 
 parties is, as between them, determined by the lex loci con- 
 tractus. Thus, if by the lex loci contractus the purchaser 
 acquires the note as a bona fide holder, not subject to the 
 defense of a ])rior payment, such payment cannot be 
 pleaded, although the lex fori Avould permit it."*" And 
 whether or not the proprietor of the bill or note is a hona fide 
 hohler, is . to be determined by the lex loci contractus — 
 that is, the place of payment.*^ The mode and measure of 
 recovery would, however, seem to be a question of the 
 forum. *^ 
 
 § 498. In respect to set-off, it is laid down by text 
 writers, and by the courts of common law, that a set-ofp to 
 any action allowed by the local law is to be treated as a part 
 of the remedy; and that, therefore, it is admissible in claims 
 between persons belonging to different States or countries, 
 although it may not be admissible by the law of the country 
 where the debt which is sued was contracted.^*' The same 
 principle applies to the mode of attacking consideration. 
 When the lex fori allows a plea of want of consideration 
 in a suit on an obligation, which by the lex loci contractus 
 was sealed, and to which by such latter law no such plea 
 could be offered, the lex fori controls.^^ So as to other 
 legal and equitable defenses, where the very contract itself 
 does not exclude them, they are to be controlled by the lex 
 
 46 Wharton on Conflict of Laws, § 769. 
 
 47 Harrison v. Edwards, 12 Vt. 651. 
 
 48 Allen V. Bratton, 47 Miss. 129; Woodruflf v. Hill, 116 Mass. 310. 
 
 49 Woodruff V. Hill, 116 Mass. .310; 2 Ames on Bills and Notes, 306. 
 60 Mineral Point R. Co. v. Barron, 83 111. 36&; Gibbs v. Howard, 2 
 
 N. H. 296. 
 
 Bi Wharton on Conflict of Laws, § 788.
 
 .^^ i'J'J, 5UU. 
 
 LEX FOlU. iJ43 
 
 fori.^^ Statutes providing certain exemptions from levy iin.l 
 sale upon execution affect the remedy, and iIkhc of the 
 forum prevail.^"* 
 
 !< 499. The courts can take no judicial notice of the laws 
 of another country. — When rcdied upon, they must be 
 proved as facts, and othenvise it will be presumed that they 
 are the same as the laws of the forum in which suit is 
 brought;^* or what is the same in effect, when the laws of 
 the foreign country are not put in proof as facts, the court 
 will ai)ply to the transaction in suit the laws of the forum. 
 Thus the law as to the rate of damages will be presumed to 
 be the same where the bill is drawn in one country, and is 
 sued on in another ;^^ so it will be presumed, where the law 
 of the forimi authorizes an indorsee to sue before exhaust- 
 ing recourse against the maker, that the law of the place 
 of the contract is like\\'ise ;^'^ and so, where by the law of 
 the forum a party signing in a certain way is regarded as an 
 indorser, the foreign law will be presumed to be likewise.^' 
 But where the question is one relating to the law merchant, 
 which is of general application, as, for instance, the num- 
 ber of days of grace, it would be presumed that they were 
 fixed by the law merchant, that is, that three days of grace 
 were allowed — the law merchant being regarded as part of 
 the common law.'^^ Bonds and coupons in fonn negotiable 
 according to the law merchant as now recognized would be 
 presumed in one State to be negotiable in another.^^ 
 
 § 500. What law governs as to presentment, protest, and 
 notice of dishonor. — In order to charge the drawer or in- 
 dorser, the holder must exercise due diligence in presenting 
 
 r.2 Bliss V. IToiifjhton, 13 X. H. 12G. 
 53 Mineral Point R. Co. v. BaiTon, 83 111. 3G6. 
 
 MFoulke V. Fleming. 13 Md. 392; Hunt v. Johnson, 44 X. Y. 27; 
 AVhiddcn v. Seelye, 40 Me. 247. 
 
 K> Kuonzi V. Elvers, 14 La. Ann. 391. 
 
 5G Bean v. Brigj^s, 4 Iowa, 4G7. 
 
 67 Daniel on Xegotiable Instniments, §§ 891, 895. 
 
 58 Lucas V. Ladew, 28 IMo. 342. 
 
 59 Tvrell V. Cairo & St. L. B. Co.. 7 Mo. App. 294.
 
 3-i-i CONFLICT OF LAWS. § 500. 
 
 the bill to the drawee, or acceptor, and the note to the 
 maker; and as the acts necessary to constitute a due present- 
 ment are to be done at the place , upon which the bill is 
 drawn, or at which the bill or note is payable, they must 
 be governed by the law of the place upon which it is drawn, 
 or at which it is payable, as the case may be. Accordingly, 
 the question whether or not the bill should have grace 
 would be determined by the law of the place of payment; 
 and also, if allowable, in how many days grace should con- 
 sist. In France no grace is allowable, while in England and 
 the United States it is generally three days. But it ranges 
 in different places from three to thirty days, and in each 
 case the law of the particular place would determine.^^ 
 
 When a foreign bill is dishonored, it is necessary that it 
 should be protested, and the protest should be made at the 
 time, in the manner, and by the persons prescribed in the 
 place where the bill is refused acceptance or payment, as 
 the case may be.^^ 
 
 In respect to notice, it has been distinguished from the 
 presentment and protest in an often quoted American case,**^ 
 in which it is held that it must conform to the law of the 
 place where the drawing or indorsement occurs, in order 
 to charge the drawer or any particular indorser, on the 
 ground that the nature and extent of the liabilities of the 
 drawer or indorser are to be determined according to the 
 law of the place where the bill is drawn or indorsement 
 made, and that the mode and time of notice constitute an 
 implied condition of the contract.*^^ 
 
 60 Bank of Washington v. Triplett, 1 Pet. 25; Aymar v. Sheldon, 12 
 Wend. 439; Jewell v. Wright, 30 N. Y. 264. 
 ci Daniel on Negotiable Instruments, § 909. 
 
 62 Aymar v. Sheldon, 12 Wend. 439. 
 
 63 Lee V. Selleck, 33 N. Y. 815; Williams v. Putnam, 14 N. H. 543; 
 Story on Bills, § 285.
 
 APPENDIX. 
 
 1345]
 
 APPENDIX. 
 
 THE NEGOTIABLE INSTRUMENTS LAW. 
 
 Mr. Daniel, in the year 1876, concluded the first edition of his work 
 on " Negotiable Instruments " with the following expression of hope 
 for a uniform system of commercial law throughout the country: 
 " ' We will never immolate truth, justice, and the law because a State 
 tribunal has erected the altar and decreed the sacrifice.'* And for the 
 facilitation of trade, and the fair understanding of mercantile nego- 
 tiations among all mercantile men, it is to be hoped tliat tlie day is 
 not far distant when it may be truly said (in the language of Cicero, 
 approvingly quoted by Mansfield and Story), respecting the law of our 
 subject, wherever industry turns a wheel or commerce sets a sail. 
 ' No7i erit alia lex liomce, alia Athenis, alia nunc, alia posihac, sed et 
 apud omnes gentes, ct omni tempore, una eademque lex obtinehit.' " 
 
 Appreciating the necessity for revision and uniformity, the English 
 Parliament in the year 1882 passed the '' English Bills of Exchange 
 Act," and on May 19, 1897, the Legislature of New York enacted "An 
 act in relation to Negotiable Instruments." This law was first recom- 
 mended at the conference of the Commissioners on Uniformity of Laws 
 in 1895, and was based upon the " English Bills of Exchange Act." In 
 1897 the States of Connecticut, Colorado, and Florida adopted the New 
 York statute; in 1898, Massachusetts, Marj-land. and Virginia fol- 
 lowed; in 1899, Rhode Island, Tennessee, North Carolina, Wisconsin, 
 North Dakota, Utah, Oregon, Washington, and the District of Colum- 
 bia; in 1901, Pennsylvania and Arizona; and in 1902, Ohio, New 
 Jersey, and Iowa. 
 
 * Swift V. Tyson, Kl Pet. 1. 
 [347]
 
 348 THE NEGOTIABLE INSTKU.MEXTS LAW. §§ 1-4. 
 
 PEOVISIONS OF THE ACT. 
 
 ARTICLE I.* 
 
 General Provisions. 
 
 Section 1. Short title. 
 
 2. Definitions and meaning of terms. 
 
 3. Person primarily liable on instrument. 
 
 4. lleasonabie time, what constitutes. 
 
 5. Time, how computed; when last day falls on holiday. 
 
 6. Application of chapter. 
 
 7. Rule of law merchant; when governs. 
 
 § I. Short title.— This act shall be known as the negotiable instru- 
 ments law. 
 
 § 2. Definitions and meaning of terms.— Tn this act, unless the 
 context otlicrwise requires: 
 
 "Acceptance" means an acceptance completed by delivery or notifi- 
 cation. 
 
 "Action " includes counterclaim and set-off. 
 
 " Bank " includes any person or association of persons carrying on 
 the business of banking, whether incorporated or not. 
 
 "Bearer" means the person in possession of a bill or note which 
 is payable to bearer. 
 
 " Bill ■' means bill of exchange, and " note " means negotiable promis- 
 sory 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. 
 
 ■" 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 incorporated or not. 
 
 " Value " means valuable consideration. 
 
 " Written " includes printed, and " writing " includes print. 
 
 § 3. Person primarily liable on instrument. -The person "pri- 
 marily " 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 determining what is 
 a " reasonable time " or an " unreasonable time," regard is to be had 
 to the nature of the instrument, the usage of trade or business (if 
 any) with respect to such instruments, and the facts of the particular 
 case. 
 
 *The numbers of the sections of this article in other States than 
 New York are as follows : Colorado, Iowa, Massachusetts, New .Tersey. 
 North Carolina, North Dakota, Pennsylvania, Utah, Virginia, and 
 Washington, 190-190; Maryland, 1.3-19; Ohio, 3178-.3178p; Oregon, 
 190-192; Phode Island, 1-7; Wisconsin, 167.5. In Arizona, Connecticut, 
 District of Columbia, Florida, and Tennessee, these sections arc not 
 numbered.
 
 §§ 5-20. THE NEGOTIABLE INSTKUMEXTS LAW. 340 
 
 § 5. Time, how computed; when last day falls on holiday.— 
 
 Where the day, or tlie last day, for doing any act lierein requuxd or 
 permitted to be done falls on Sunday or on a holiday, the act may be 
 done on the uext succeeding secular or business day. 
 
 § 6. Application of chapter.— The provisions of this act do not 
 apply to iiiL:<)li:il)li! iii-^ti uuifnts made and delivered prior to the 
 passage hereof. 
 
 § 7. Law merchant; when governs.— In any case not provided for 
 in this act the rules of the law merchant shall govern. 
 
 ARTICLE IL* 
 
 Form and Interpretation. 
 
 Section 20. Form of negotiable instrument. 
 
 21. Certainty as to sum; what con.stitutes. 
 
 22. When promise is unconditional. 
 
 23. Determinable future time; what constitutes. 
 
 24. Additional provisions not affecting negotiability. 
 
 25. Omissions; seal; particular money. 
 2G. When payable on demand. 
 
 27. When payable to order. 
 
 28. When payable to bearer. 
 
 29. Terms when sull'icient. 
 
 30. Date, presumptions as to. 
 3L Ante-dated and post-dated. 
 
 32. When date may be inserted. 
 
 33. Blanks, when may be filled. 
 
 34. Incomplete inslnimont not delivered. 
 
 35. Delivery; when eireetual: when presumed. 
 
 36. Constrvietion where instrument is ambiguous. 
 
 37. Liability of person signing in trade or assumed name. 
 
 38. Signature bv agent: authority: how shown. 
 
 39. Liability of'pe>-^"" signing as agent, et cetera. 
 
 40. Signature by procuration : effect of. 
 
 4L Effect of indorsement by infant or corporation. 
 42. Forged signature; effect of. 
 
 § 20. Form of negotiable instrument.— An instrument to be ne- 
 gotiable must conform to the following requirements: 
 
 1. It must be in writing and signed by the maker or drawer. 
 
 2. Must contain an unconditional promise or order to pay a sum 
 
 certain in money. • ui * * 
 
 3. Must be payable on demand, or at a fixed or determinable tuture 
 
 time. 
 
 4. Must be pavable to order or to bearer; and 
 
 5. Where the instrument is addressed to a drawee, he must be named 
 or otherwise indicated therein with reasonable certainty. 
 
 •The numbers of the sections of this article in other States than 
 Now York are as follows: Arizona, 3304-3326: Colorado. Connecticut. 
 District of Columbia. Florida, Iowa. Massachusetts, New Jersey, North 
 Carolina. North Dakota, Oresron, Pennsylvania. Tennessee. Utah. \ ir- 
 ginia, and Washington, 1-23; Maryland. 20-42; Ohio, 31<l-31-lv; 
 Rhode Island, 9-31; Wisconsin, 1675-1 to 1675-23.
 
 350 niE XEGOTIABLK 1^■STKUMENT!3 LAW. §§ 21-25. 
 
 § 21. Certainty as to sum; what constitutes.— The sum payable 
 is a sum certain within the meaning of this act, although it is to be 
 paid: 
 
 1. With interest; or 
 
 2. By stated instalments ; or 
 
 3. By stated instalnuiits, with a provision that upon default i; 
 payment of any instalment or of interest, the whole shall become 
 due ; or 
 
 4. With exchange, whether at a fixed rate or at the current rate; or 
 
 5. With costs of collection or an attorney's fee, in case payment 
 shall not be made at maturity. 
 
 § 22. When promise is unconditional. — An unqualified order or 
 promise to pay is unconditional within the meaning of this act, though 
 coupled witli : 
 
 1. An indication of a particular fund out of which reimbursement 
 is to be made, or a particular account to be debited with the amount; or 
 
 2. A statement of the transaction which gives rise to the instrument. 
 But an order or promises* to pay out of a particular -fund is not un- 
 conditional. 
 
 § 23. Determinable future time; what constitutes. — An instru- 
 ment is payable at a determinable future time, within the meaning 
 of this act, which is expressed to \ye payable: 
 
 1. At a fixed period after date or sight; or 
 
 2. On or before a fixed or determinable future time specified 
 therein ; or 
 
 3. On or at a fixed period after the occurrence of a specified event, 
 which is certain to happen, though the time of happening be uncertain. 
 
 An instrument payable upon a contingency- is not negotiable, and the 
 happening of the event does not cure the defect. 
 
 § 24. Additional provisions not affecting negotiability. — An in- 
 
 strimient which contains an order or promise to do any act in addition 
 to the payment of money is not negotiable. But the negotiable char- 
 acter of an ini^trument otherwise negotiable is not affected by a pro- 
 vision which : 
 
 1. Authorizes the sale of collateral securities in case the instru- 
 ment 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 advantage or pro- 
 tection 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 A'alidate any provision or stipula- 
 tion otherwise illegal. 
 
 § 25. Omissions; seal; particular money. — The validity and ne- 
 gotiable character of an instrument are not affected by tlie fact that: 
 
 1. It is not dated; or 
 
 2. Does not specify the value given, or that any value has been 
 given therefor; or 
 
 3. Does not specify the place where it is drawn or the place where 
 it is payable; or 
 
 4. Bears a seal ; or 
 
 5. Designates a particular kind of current money in which payment 
 is to Ije made. 
 
 * Error in engrossing. 
 
 i
 
 :> 
 
 §§ 2G-.33. THE NEGOTIABLE IXSTRUMENTS LAW. 351 
 
 But nothing in this section shall alter or repeal any statute requir- 
 ing in certain cases the nature of the consideration to be stated in 
 the instrument. 
 
 § 26. When payable on demand.— An instrument is payable on 
 demand: 
 
 1. Where it is expressed to be payable on demand, or at sight, or 
 on presentation ; or 
 
 2. In wliicli 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, pay- 
 able on demand. 
 
 § 27. 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: 
 • r. A payee who is not maker, drawer or drawee; or 
 
 2. Tlie drawer or maker; or 
 
 3.. The drawee; or 
 
 4. Two or more payees jointly; or 
 
 5. One or some of several payees; or 
 
 6. The holder of an ofTiee for the time being. 
 
 Wliere the instrument is payable to order the payee must be named 
 or otherwise indicated tlicroin with reasonable certainty. 
 
 § 28. When payable to bearer. — The instrument is payable to 
 bearer : 
 
 1. When it is expressed to be so payable; or 
 
 2. When it is payable to a person named therein or bearer; or 
 
 3. When it is payable to the order of a fictitious or non-existing per- 
 son, 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. 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 hereof. 
 
 § 30. Date, presumption as to. — Where the instrument or an ac- 
 ceptance or any indorsement thereon is dated, such date is deemed 
 prima facie to be the true date of the making, drawing, acceptance or 
 indorsement, as the case may be. 
 
 § 31. Ante=dated and post=dated. — The instrument is not invalid 
 for the reason only that it is ante-dated or post-dated, provided this 
 is not done for an illegal or fraudulent purpose. The person to whom 
 an instrument so dated is delivered acquires the title thereto as of the 
 date of delivery. 
 
 § 32. When date may be inserted. — Where an instrument ex- 
 pressed to be payable at a fixed period after date is issued undated, 
 or where the acceptance of an instrument payable at a fixed period 
 after sight is undated, any holder may insert therein the true date 
 of issue or acceptance, and the instrument shall be payable accordingly. 
 The insertion of a wrong date does not avoid the instrument in the 
 hands of a subsequent holder in due course; but as to him, the date 
 so inserted is to be regarded as the true date. 
 
 § 33. Blanks; when may be filled. — Where the instrument is want- 
 ing in any material particular, tlio person in possession thereof has a 
 prima facie authority to complete it by filling u|) the blanks therein. 
 And a signature on a blank paper delivered by the person making the 
 signature in order that the paper may be converted into a negotiable
 
 352 THE NEGOTIABLE INSTKUMENTS LAW. §§ 34-37. 
 
 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- 
 pleted, 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 eirectual for all purposes in his hands, and he may en- 
 force it as if it had been filled up strictly in accordance with the 
 authority given and within a reasonable time. 
 
 § 34. Incomplete instrument not delivered.— Where an incom- 
 plete instrument has not been delivered it will not, if completed and 
 negotiated, without authority, be a valid contract in the hands of any 
 holder, as against any person whose signature was placed thereon before 
 delivery. 
 
 § 35. Delivery; when effectual; when presumed.— Every con- 
 tract on a negotiable instrument is incomplete and revocable until de- 
 livery of the "instrument for the purpose of giving effect thereto. As 
 between immediate parties, and as regards a remote party other than 
 a holder in due course, the delivery, in order to be effectual, must be 
 made either by or under the authority of the party making, drawing, ac- 
 cepting, or indorsing, as the case may be; and in such case the deliv- 
 ery may be shown to have been conditional, or for a special purpose 
 only, and not for the purpose of transferring the property in the in- 
 strument. But where the instrument is in the hands of a holder in 
 due course, a valid delivery thereof by all parties prior to him so as 
 to make them liable to him is conclusively presumed. And where the 
 instrument is no longer in the possession of a party whose signature 
 appears thereon, a valid and intentional delivery by him is presumed 
 until the contrary is proved. 
 
 § 36. Construction where instrument is ambiguous.— Where the 
 language of the instrument is ambiguous, or there are omissions therein, 
 the following rules of construction apply: 
 
 1. Where the sum payable is expressed in Avords 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 uncer- 
 tain, references may be had to the figures to fix the amount; 
 
 2. Where the instrument provides for the payment of interest, with- 
 out specifving the date from which interest is to run, the interest runs 
 from tlie^date of the instrument, and if the instrument is undated, 
 from the issue thereof; 
 
 3. Where the instrument is not dated, it will be considered to be 
 dated as of the time it was issued; 
 
 4. Where there is a conflict between the written and printed pro- 
 visions of the 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. 
 
 § 37. 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. B ut one who 
 
 * The word " negotiated '' substituted for " negotiable " by Laws 
 of X. Y. 1898, c. 336.
 
 f § 38-ol. THE NEGOTIABLE INSTRUMEXTS LAW. 
 
 353 
 
 signs in a trade or assumed name will ho liable to the same extent 
 as if he had signed in his o\sTi name. 
 
 § 38. Signature by agent; authority; how shown.— The signa- 
 
 tMr«' of any imily may he luadi' by a duly authorized agent. No par- 
 ticular form of appointment is necessary for this purpose; and the 
 authority of the a<,'ent may be established as in other cases of agency. 
 
 § 39. Liability of person signing as agent, etc.— Where the in- 
 strument contain's 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 
 lining a rei)resentative character, without disclosing his principal, does 
 not exempt him from personal liability. 
 
 § 40. Signature by procuration; effect of .— A signature by " pro- 
 curation " operates as notice that the agent has but a limited author- 
 ity to sign, and the principal is bound only in case the agent in so 
 signing acted within the actual limits of his authority. 
 
 § 41. Effect of indorsement by infant or corporation.— The in- 
 dorsement or assignment of the instrument by a corporation or by an 
 infant passes the property therein, notwithstanding that from want 
 of capacity the corporation or infant may incur no liability thereon. 
 
 § 42. Forged signature; effect of.— Where a signature is forged or 
 made without autiiority of the person whose signature it purports to 
 te, it is wholly inoperative, and no right to retain the instrument, or 
 to give a discharge therefor, or to enforce payment thereof against any 
 party thereto, can be acquired through or under such signature, unless 
 the party against whom it is sought to enforce such right is precluded 
 from setting up the forgery or want of authority. 
 
 ARTICLE IIL* 
 
 Consideration of Negotiable Instruments. 
 
 Section 50. Presumption of consideration. 
 5L What constitutes consideration. 
 
 52. What constitutes holder for value. 
 
 53. When lien on instrument constitutes holder for value. 
 
 54. EfTect of want of consideration. 
 
 55. Liability of accommodation party. 
 
 § 50. Presumption of consideration.— Every negotiable instru- 
 ment is deemed prima facie to have been issued for a valuable con- 
 sideration; and every person whose signature appears thereon to have 
 become a party thereto for value. 
 
 § 51. Consideration, what constitutes.— Value is any considera- 
 tion sufficient to support a simple contract. An antecedent or pre- 
 existing debt constitutes value; and is deemed such whether the instru- 
 ment is payable on demand or at a future time. 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona. 3327-3332; Colorado, Connecticut, 
 District of Columbia, Florida, Iowa. Massachusetts, >jcw Jersey. North 
 Carolina, North Dakota. Oregon, Pennsylvania. Tennessee, Utah. Vir- 
 Erinin. and Wasliin-rton. 24-20; Marvland. 43-4S ; Ohio, 3171u--3172a; 
 Rhode Island, 32-37 ; Wisconsin. 1675-50 to 1675-55. 
 23
 
 354 THE NEGOTIABLE IXSTRUMENTS LAW. §§ 52-GO. 
 
 § 52. What constitutes holder for value.— Where value has at 
 any time been given for the instrument, the holder is deemed a holder 
 for value in respect to all parties who became such prior to that time. 
 
 § 53. When lien on instrument constitutes holder for value.— 
 
 Where the holder has a lien on the instrument, arising either from 
 contract or by implication of law, he is deemed a holder for value to the 
 extent of his lien. 
 
 § 54. Effect of want of consideration.— Absence of failure of con- 
 sideration 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. Liability of accommodation party.— An accommodation 
 party is one who has signed tlie instrument as maker, drawer, ac- 
 ceptor, or indorser, without receiving value therefor, and for the pur- 
 pose of lending his name to some o*.her person. Such a person is 
 liable on the instrument to a holder for value, notwithstanding 
 such holder at t)ie time of taking the instrument knew him to be 
 only an accommodation party. 
 
 ARTICLE IV. 
 Negotiation. 
 
 Section GO. 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. Efl'ect 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 : presump'^ion. 
 
 77. Continuation of negotiable character. 
 
 78. Striking out indorsement. 
 
 79. Transfer without indorsement ; effect of. 
 
 80. When prior party may negotiate instrument. 
 
 § 60. What constitutes negotiation.— An instrument is negotiated 
 when it is transferred from one person to another in such mahner as 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona, 3333-3353; Colorado, Connecticut, 
 District of Columbia, Florida. Iowa, Massachusetts, New Jersey. North 
 Carolina, North Dakota, Oregon. Pennsylvania. Tennessee. Utah. Vir- 
 ginia, and Washington, 30-50; Maryland, 49-69; Ohio, 31726-3172u; 
 Rhode Island, 38-58; Wisconsin, 1676 to 1676-20.
 
 §§ 61-G8. TllK NKCiOTlAliLK IXSTKUMENTS LAW. ooo 
 
 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 lioider cuuiploted ljy delivery. 
 
 § 6i. Indorsement; how made.— The indorsement must be written 
 on the instnniiciit itself or upon a paper attached thereto. The signa- 
 ture of the indorser, williout additional words, is a suflieient indorse- 
 ment. 
 
 § 62. Indorsement must be of entire instrument.— The indorse- 
 ment must be an indorsement of llie fiitin- insliunu-nt. An indorse- 
 ment, which purports to transfer to the indorsee a part only of the 
 amount payalile, or which purports to transfer the instrument to two 
 or more iiidorscrs 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 tlie residue. 
 
 § 63. Kinds of indorsement.— An indorsement may be either spe- 
 cial or in blank; and it may also be either restrictive or qualified, or 
 conditional. 
 
 § 64. Special indorsement; indorsement in blank, — A .special 
 indorsement si)ccilies the person to whom, or to whose order the instru- 
 ment is to 1)0 payable; and the indorsement of such indorsee is necessary 
 to the further negotiation of the instrument. An indor.sement in blank 
 specifies no indorsee, and an instrument so indorsed is payable to 
 bearer, and may be negotiated by delivery. 
 
 § 65. Blank indorsement; how changed to special indorsement. 
 
 — The holder may convert a blank indorsement into a special indorse- 
 ment by writing over the signature of the indorser in blank any con- 
 tract consistent with the character of the indorsement. 
 
 § 66. When indorsement restrictive.- An indorsement is restric- 
 tive, which either : 
 
 1. Prohibits the further negotiation of the instrument: or 
 
 2. Constitutes the indorsee the agent of the indorser: or 
 
 3. Vests the title in the indorsee in trust for or to the use of some 
 other person. 
 
 But the mere absence of words implying power to negotiate does not 
 make an indorsement restrictive. 
 
 § 67. 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 bring any action thereon that the indorser could bring; 
 
 3. To transfer his rights as such indorsee, where the form of the 
 indorsement authorizes him to do so. 
 
 But all subsequent indorsees acquire only the title of the fir.-t in- 
 dorsee under the restrictive indorsement. 
 
 § 68. Qualified indorsement.*— A qualified indorsement constitutes 
 the indorser a mere assignor of the title to the instrument. It may be 
 made by adding to the indorser's signature the words " without re- 
 course " or any words of similar import. Such an indorsement does 
 not impair the negotiable character of the instrument. 
 
 * The dash and the words " a qualified indorsement " omitted in the 
 original act through error were added by Laws N. Y. 1898, c. 336.
 
 356 THE XEGOTIAP.T.E IXSTRUMENTS LAW. §§ 09-79. 
 
 § 69. Conditional indorsement.— Where an indorsement is condi- 
 tional, a party required to pay the instrument may disregard the con- 
 dition and make payment to the indorsee or his transferee, whether 
 the condition lias been fulfilled or not. But any person to whom an 
 instrument so indorsed is nejjotiated will hold the same, or the pro- 
 ceeds thereof, subject to the rights of the person indorsing conditionally. 
 
 § 70. Indorsement of instrument payable to bearer. — Where 
 an instrument, payable to bearer, is indorsed specially, it may, never- 
 theless, he furtlior negotiated by delivery; but the ))('rson iiKlorsing 
 specially is liable as indorser to only such holders as make title through 
 his indorsement. 
 
 § 71. Indorsement where payable to two or more persons. — 
 
 Where an instrument is payable to the order of two or nun-e ])aycrs or 
 indorsees who are not partners, all must indorse, unless the one indors- 
 ing has authority to indorse for the others. 
 
 § 72. Effect of instrument drawn or indorsed to a person as 
 cashier. — Wliere an instrument is drawn or indorsed to a person as 
 " cashier " or other fiscal ofhcer of a bank or corporation, it is deemed 
 prima facie to be payable to the bank or corporation of which he is 
 such officer ; aiid may be negotiated by either the indorsement of the 
 bank or corporation, or the indorsement of the officer. 
 
 § 73. Indorsement where name is misspelled, et cetera. — Where 
 the name of a payee or indorsee is wrongfully designated or misspelled, 
 he may indorse the instrument as therein described, adding, if he think 
 fit, his proper signature. 
 
 § 74. Indorsement in representative capacity. — Where any per- 
 son is under obligation to indorse in a representative capacity, he may 
 indorse in such terms as to negative personal liability. 
 
 § 75. Time of indorsement; presumption. — Except where an in- 
 strument bears date after the maturity of the instrument, every nego- 
 tiation is deemed prima facie to have been effected before the instru- 
 ment was overdue. 
 
 § 76. Place of indorsement; presumption. — Except where the con- 
 trary appears every indorsement is presumed prima facie to have been 
 made at the place where the instrument is dated. 
 
 § 77. Continuation of negotiable character. — An instrument nego- 
 tiable in its origin continues to be negotiable until it has been re- 
 strictively indorsed or discharged by payment or otherwise. 
 
 § 78. 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. Transfer without indorsement; effect of. — Where the 
 holder of an instrument payable to his order transfers it for value 
 without indorsing it, the transfer vests in the transferee such title as 
 the transferrer had therein, and the transferee acquires, in addition, 
 the right to have the indorsement of the transferrer. But for the pur- 
 pose of determining whether the transferee is a holder in due course, 
 the negotiation takes effect as of the time when the indorsement is 
 actuallv made.
 
 §§ 80-94. THE NEGOTIABLE INSTRUMENTS LAW. 1357 
 
 § 80. When prior party may negotiate instrument.— Wliere an 
 instrument is negotiated back to a prior party, such party may, sub- 
 ject to the provisions of this act, reissue and furtlier negotiate the 
 same. But he is not entith'd to enforce payment thereof against any 
 intervening party to whom he was personally liable. 
 
 ARTICLE v.* 
 Rights of Holder. 
 
 Section 90. Right of hohler 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. W'hen title defective. 
 
 95. What constitutes notice of defect. 
 9G. Rights of holder in due course. 
 
 97. When subject to original defenses. 
 
 98. Who deemed holder in due course. 
 
 § 90. Right of holder to sue; payment.— The holder of a negoti- 
 able instrument may sue thereon in his own name; and payment to 
 him in due course discharges the instrument. 
 
 § 91. What constitutes a holder in due course. — A holder in due 
 course is a holder who has taken the instrument under the following 
 conditions: 
 
 1. Tliat it is complete and regular upon its face; 
 
 2. That he became the holder of it before it was overdue, and without 
 notice that it had been i)rcviously dishonored, if such were 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. When person not deemed holder in due course. — Where an 
 instrument payable on demand is negotiated an unreasonable length 
 of time after its issue, the holder is not deemed a holder in due course. 
 
 § 93. Notice before full amount paid.— Where the transferee re- 
 ceives notice of any infirmity in the instrument or defect in the title 
 of the person negotiating the same before he has paid the full amount 
 agreed to be paid therefor, he will Ihj deemed a holder in due course 
 only to the extent of the amount theretofore paid by him. 
 
 § 94. When title defective. - The title of a person who negotiates 
 an instrument is defective within the meaning of this act wlien he 
 obtained the instrument, or any signature thereto, by fraud, duress, or 
 force and fear, or other unlawful means, or for an illegal consideration, 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona. 3354-33(52; Colorado, Connecticut, 
 District of Columbia, Florida, Iowa, Massachusetts, New Jersey. North 
 Carolina, North Dakota. Oregon. Pennsylvania. Tennessee. Utah, Vir- 
 ginia, and Washington. 51-59; Maryland, 70-78; Ohio, 3172ii'-3173d; 
 Rhode Island, 59-07; Wisconsin, 1070-21 to 1070-29.
 
 35S THE 2^'EGOTIABLE IXSTRUMEiSTTS LAW.. §§ 95-111. 
 
 or when he negotiates it in breach of faith, or under such circumstances 
 as amount to a fraud. 
 
 § 95. What constitutes notice of defect.— To constitute notice of 
 an iutirmity in the instruuK'nl or defect in the title of the person nego- 
 tiating the same, the person to whom it is negotiated must have liad 
 actual knowledge of the infirmity or defect, or knowledge of such facts 
 that his action in taking the instrument amounted to bad faith. 
 
 § 96. Rights of holder in due course.— A holder in due course 
 holds the instrument free from any defect of title of prior parties 
 among themselves, and may enforce payment of the instrument for the 
 full amount thereof against all parties liable thereon. 
 
 § 97. 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, and who 
 is not himself a party to any fraud or illegality affecting the instru- 
 ment, has all the rights of such former holder in respect of all parties 
 prior to the latter. 
 
 § 98. Who deemed holder in due course.— Every holder is deemed 
 jn-ima 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 de- 
 fective, the burden is on the holder to prove that he or some person 
 under whom he claims acquired the title as a holder in due course. 
 But the last-mentioned rule does not apply in favor of a party who 
 became bound on the instrument prior to the acquisition of such de- 
 fective title. 
 
 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. 
 
 115. 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. 
 
 § no. 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. 
 
 § III. Liability of drawer.— The drawer, by drawing the instru- 
 ment, admits the existence of the payee and his then capacity to in- 
 dorse; and engages that on due presentment the instrument will be 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona, 3363-3372; Colorado, Connecticut, 
 District of Columbia, Florida, Iowa, Massachusetts, New Jersey, North 
 Carolina, North Dakota, Oregon, Pennsylvania, Tennessee, Utah, Vir- 
 rrinia, and Washington. 60-69; Marvland, 79-88; Ohio, 3173e-3173n; 
 Rhode Island, 68-77; Wisconsin, 1677 to 1677-9.
 
 }§ 112-llG. THE ,\E(iOTlAULK IXSTKUMEXTS LAW. 
 
 359 
 
 accepted and* paid, or both, according to its tenor, and that if it be 
 dishonored and the necessary proceedings on dishonor be duly taken, 
 lie will pay the amount thereof to the holder, or to any subsequent 
 indorser who nuiv be compelled to pay it. But the drawer may insert 
 in the instrument an express stipulation negativing or limiting hiB 
 own liability to the holder. 
 
 § 112. Liability of acceptor.— The acceptor by accepting the in- 
 strument engages that he will pay it according to the tenor of 
 his acceptance; and admits: 
 
 1. The existence of the drawer, the genuineness of his signature, and 
 his capacity and authority to draw the instrument; and 
 
 2. The existence of the payee and his then capacity to indorse. 
 
 § 113. When person deemed indorser.— A person placing his sig- 
 nature upon an instrument otherwise than to maker, drawer, or ac- 
 ceptor is deemed to be an indorser, unless he clearly indicates by 
 appropriate words his intention to be bound in some other capacity. 
 
 § 114. Liability of irregular indorser.— Where a person, not other- 
 wise a party to an instrument, places thereon his signature in blank 
 before delivery, he is liable as indorser in accordance with the following 
 
 rules: , , X, • J u • 
 
 1. If the instrument is payable to the order of a third person, he is 
 
 liable to the payee and to all subsequent parties. 
 
 2 If the instrument is payable to the order of the maker or drawer, 
 
 or is payable to bearer, he is liable to all parties subsequent to the 
 
 maker or drawer. , • i- ui ^ n 
 
 3. If he signs for the accommodation of the payee he is liable to all 
 
 parties subsequent to the payee. 
 
 § IIS. Warranty where negotiation by delivery, et cetera.— 
 Every person negotiating an instrument by delivery or by a qualified 
 
 indorsement, warrants: . „ x v i. -i. 
 
 1. That the instrument is genuine and in all respects what it pur- 
 ports to be; 
 
 2. That he has a good title to it; 
 
 3. That all parties had capacity to contract; 
 
 4. That he has no knowledge of any fact which would impair the 
 validity of the instrument or render it valueless. 
 
 But when the negotiation is by delivery only, the warranty extends 
 in favor of no holder other than the immediate transferee. Tlie pro- 
 visions of subdivision three of this section do not apply to persons nego- 
 tiating public or corporate securities, other than bills and notes. 
 
 « ii6. Liability of general indorser.— Every indorser who indorses 
 without qualification, warrants to all subsequent holders in due course: 
 
 1. The matter and things montioncd in subdivisions one, two, and 
 throe of the next preceding section; and 
 
 2. That the instrument is at the time of his indorsement valid and 
 
 subsisting. . , ,, , 
 
 And, in addition, he engages that, on due presentment, it shall be 
 accepted or paid, or both, as the case may be, 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 compolled to pa y it. 
 
 * Error in engrossing. Tlie word in the Commissioners' draft is 
 "or." The mistake was not corrected by Laws X. Y. 1898, c. 336. It 
 occurs onlv in the New York statute.
 
 360 THE NEGOTIABLE IISSTRUMENTS LAW. §§ 117-130. 
 
 § 117. Liability of indorser where paper negotiable by delivery, 
 
 — Where a person places his indorsement on an instrument negotiable 
 by delivery he incurs all the liabilities of an indorser. 
 
 § 118. Order in which indorsers are liable.— As respects one an- 
 other, indorsers are liable prima facie in the order in which they in- 
 dorse; but evidence is admissible to show that as bet%veen or among 
 themselves they have agreed otherwise. Joint payees or joint indorsees 
 who indorse are deemed to indorse jointly and severally. 
 
 § 119. Liability of agent or broker.— Where a broker or other 
 agent negotiates an instrument without indorsement, he incurs all the 
 liabilities prescribed by section one hundred and fifteen* of this act, 
 unless he discloses the name of his principal, and the fact that he is 
 acting only as agent. 
 
 ARTICLE VH.t 
 
 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 sufficient 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 liable as partners. 
 
 138. Presentment to joint debtors. 
 
 139. When presentment not required to charge the drawer. 
 
 140. When presentment 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. 
 
 § 130. Effect of want of demand on principal debtor. — Present- 
 ment for payment is not necessary in order to charge the person pri- 
 marily liablet on the instrument: but if the instrument is. by its terms, 
 payable at a special place, and he is able and willing to pay it there 
 at maturity and has funds there available for that purpose, such ability 
 
 •Amended by Laws of N. Y. 1898, c. 336, so as to give correct 
 number. 
 
 t The numbers of the sections of this article in other States than 
 New York are as follows: Arizona, 3373-3391; Colorado, Connecticut, 
 District of Columbia, Florida, Iowa, Massachusetts, New Jersey, North 
 Carolina, North Dakota, Oregon, Pennsvlvania. Tennessee, Utah, Vir- 
 ginia, and Washington, 70-88; Maryland, 89-107; Ohio, 3173o-3174f; 
 Rhode Island, 78-96; Wisconsin, 1678 to 1678-18. 
 
 t The word " liable " omitted in the New York Act of 1897 supplied 
 by Act of 1898, c. 336. In the Wisconsin act all of the first sentence 
 after the words "primarily liable on the instrument" is omitted.
 
 §§ 131-137. THE >'EGOTlAlJl.K IXSTKUMENTS LAW. 361 
 
 and willinf^e.ss are equivalent to a tender of payment upon his part. 
 But except us herein otherwise provided, presentment for payment is 
 necessary in order to charge the drawer and indorsers. 
 
 § 131. Presentment where instrument is not payable on de- 
 mand. — Where tlie instrument is not payabh' on demand, presentment 
 must be made on tlie day it falls due. Where it is payable on demand, 
 presentment must bo made witliin a reasonalilc time after its issue, 
 except that in case of a bill of exchange, presentment for payment will 
 be sufficient if made within a reasonable time after the last negotiation 
 thereof. 
 
 § 132. What constitutes a sufficient presentment. — Presentment 
 for payment, to be sullicient, must lx> nuide: 
 
 1. Hy the holder, or by some person authorized to receive payment 
 on his behalf; 
 
 2. At a reasonable hour on a business day; 
 
 3. At a proper place as herein dcliTied ; 
 
 4. To the person primarily liable on the instrument, or if he is 
 absent or inaccessible, to any person found at the place where the pre- 
 sentment is made. 
 
 § 133. Place of presentment. — Presentment for payment is made 
 at the proper place. 
 
 1. Where a place of pajnnent is specified in the instrument and it 
 is there presented ; 
 
 2. Where no place of payment is specified, but the address of the 
 person to make payment is given in the instrument and it is there pre- 
 sented; 
 
 3. Where no place of payment is specified and no address is given and 
 the instrument is presented at the usual place of busine.s3 or residence 
 of the person to make payment. 
 
 4. In any other* case if presented to the person to make paj-ment 
 wherever he can be found, or if presented at his last known place of 
 business or residence. 
 
 § 134. Instrument must be exhibited. — The instrument must be 
 exhibited to the person from whom payment is demanded, and when it 
 is paid must be delivered up to the party paying it. 
 
 § 135. Presentment where instrument payable at bank. — Where 
 the instrument is payable at a bank, presentment for i)ayment must be 
 made during banking hours, unless the person to make payment has 
 no funds there to meet it at any time during the day, in wliich case 
 presentment at any hour before tlie bank is closed on that day is 
 sufficient. 
 
 § 136. Presentment where principal debtor is dead. — Where the 
 person primarily liable on the instrument is dead, and no place of 
 payment is specified, presentment for payment must be made to bis 
 personal representative, if such there be. and if with the exercise of 
 reasonable diligence, he can be found. 
 
 § 137, Presentment to persons liable as partners. — Where the 
 persons primarily liable on tlie instrument are liable as partners, and 
 no ])lace of payment is specified, presentment for payment may be 
 made to any one of them, even though there has been a dissolution of the 
 firm. 
 
 * The word " other " omitted from the New York statute of 1897 
 through mistake supplied by Act 1898, c. 33G.
 
 362 THE ^'EGOTIABLE INSTRUMEXTS LAW. §§ 138-148. 
 
 § 138. Presentment to joint debtors.— Where there are several 
 persons not partners, primarily liable on the instrument, and no place 
 of payment is specified, presentment must be made to them all. 
 
 § 139. When presentment not required to charge the drawer.— 
 
 Presentment for payment is not required. in order to charge tlie drawer 
 where he has no riglit to expect or require that the drawee or acceptor 
 ■will pay the instrument. 
 
 § 140. When presentment not required to charge the indorser. 
 — Presentment for jiaynicnt is not required in order to charge an in- 
 dorser where the instrument was nuide or accepted for his accommoda- 
 tion, and he has no reason to expect that the instrument will be paid 
 if presented. 
 
 § 141. When delay in making presentment is excused. — Delay 
 in making presentment for payment is excused when the delay is caused 
 by circumstances beyond the control of the holder and not imputable 
 to his default, misconduct, or negligence. When the cause of delay 
 ceases to operate, presentment must be made with reasonable diligence. 
 
 § 142. When presentment may be dispensed with. — Present- 
 ment for payment is dispensed with: 
 
 1. Where, after the exercise of reasonable diligence, presentment as 
 required by this act cannot be made; 
 
 2. Where the drawee is a fictitious person; 
 
 3. By waiver of presentment, express or implied. 
 
 § 143. When instrument dishonored by non=payment. — The in- 
 strument is dishonored by non-payment when: 
 
 1. It is duly presented for payment and payment is refused or cannot 
 be obtained; or 
 
 2. Presentment is excused and the instrument is overdue and unpaid. 
 
 § 144. Liability of person secondarily liable, when instrument 
 dishonored. — Subject to the provisions of this act, when the instru- 
 ment is dishonored by non-payment, an immediate right of recourse to 
 all parties secondarily liable thereon, accrues to the holder. 
 
 § 145. Time of maturity.— Every negotiable instrument is payable 
 at tlie time fixed therein without grace. When the day of maturity 
 falls upon Sunday or a holiday, the instrument is payable on the next 
 succeeding business day. Instruments falling due or becoming payable* 
 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. Time; how computed.— Where the instrument is payable 
 at a fixed period after date, .after sight, or after the happening of a 
 specified event, the time of payment is determined by excluding the 
 day from which the time is to begin to run, and by including the date 
 of pajTnent. 
 
 § 147. Rule where instrument payable at bank.— Where the in- 
 strument 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. 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. 
 
 * The words "or becoming payable" were added by Laws N. Y. 1898, 
 c. 336. They are not in the statute in the other States.
 
 §§ 160, 101. THE .NEUOTIAIiLE INSTRUMENTS LAW. 363 
 
 ARTICLE VIII.' 
 
 Notice of Dishonor. 
 
 Section 100. To whom notice of dislionor must be given. 
 Kil. By wliom given. 
 162. Notice given by agent. 
 1G3. Effect of notice given on belialf of liolder. 
 
 104. Kdect where notice is given by party entitled thereto. 
 
 105. When agent may give notice. 
 
 166. When notice sufficient. 
 
 167. Form of notice. 
 
 168. To whom notice ma^' be given. 
 
 169. Notice where party is dead. 
 
 170. Notice to partners. 
 
 171. Notice to ])ersons 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-office, what constitutes. 
 
 178. Notice to subsequent parties, time of. 
 
 179. Where 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. 
 
 § i6o. To whom notice of dishonor must be given. — Except aa 
 herein otherwise provided, when a negotiable instrument has been dis- 
 honored by non-acceptance or non-payment, notice of dishonor must be 
 given to the drawer and to each indorser, and any drawer or indorser 
 to whom such notice is not given is discharged. 
 
 § 1 6 1. 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 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona, 3392-3421; Colorado, Connecticut, 
 District of Columbia, Florida, Iowa, Massachusetts, New Jersey, North 
 Carolina, North Dakota, Oregon, Pennsylvania, Tennessee, Utah, Vir- 
 ginia, and Washington, 89-118; Maryland, 108-137; Ohio, 3174r7-3175i; 
 Rhode Island, 97-120; Wisconsin, lii78-19 to 1078-48.
 
 36-i THE NEGOTIABLE INSTRUMENTS LAW. §§ 1G2-173- 
 
 up. would have a riglit to reimbursement from the party to whom the 
 notice is given. 
 
 § 162. Notice given by agent.— Notice of dishonor may be given 
 by an agent either in his own name or in the name of any party entitled 
 to give notice, whether that party be his principal or not. 
 
 § 163. Effect of notice given on behalf of holder. — Where no- 
 tice is given by or on behalf of the holder, it inures for the Ijenefit of 
 all subsequent holders and all prior parties who have a right of recourse 
 against the party to whom it is given. 
 
 § 164. 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. When agent may give notice.— Where the instrument has 
 been dishonored in tlie hands of an agent, he may either himself give 
 notice to the parties liable thereon, or he may give notice to his prin- 
 cipal. If he give notice to his principal, he must do so within the same 
 time as if he were the holder, and the principal, upon the receipt of 
 such notice, has himself the same time for giving notice as if the agent 
 had been an independent holder. 
 
 § 166. When notice sufficient.— A written notice need not be 
 signed, and an insufficient written notice may be supplemented and 
 validated by verbal communication. 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. 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. To whom notice may be given.— Notice of dishonor may 
 be given either to the party himself or to his agent in that behalf. 
 
 § 169. 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 representative, if there be one, and if with rea- 
 sonable diligence he can be found. If there be no personal representa- 
 tive, notice may be sent to the last residence or la.st place of business 
 of the deceased. 
 
 § 170. 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. Notice to persons jointly liable.— Notice to joint parties 
 who are not partners must be given to each of them, unless one of 
 them has authority to receive such notice for the others. 
 
 § 172. 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. 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.
 
 ;§ 174-181. THK XEGOTIAIiLK IX.STICL-MENTS LAW. 
 
 3Ci 
 
 § 174. Where parties reside in same place.— Where the person 
 
 giving and the j)fr>un to reeeivo notice reside in the same place, notice 
 must be given witliin tiie following times: 
 
 1. If given at the place of business of the person to receive notice, 
 it must be given JM-fore the close of business hours on the day fol- 
 lowing; . , , ^, ,1. 
 
 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 liim in usual course on the day following. 
 
 § 175. Where parties reside in different places.— Where the 
 person giving and the person to receive notice reside in dillerent 
 places, the notice must be given within the following times: 
 
 1. If sent by mail, it must be deposited in the post-ollice in time 
 to go by mail the day following the day of dishonor, or if there be 
 no mail at a convenient hour on that day, by the next mail thereafter. 
 
 2. If given otherwise than through the post-office, then within the 
 time that notice would have In-en received in due course of mail, if 
 it had been deposited in the post-office within the time specified in the 
 last subdivision. 
 
 § 176. When sender deemed to have s:iven due notice.— Where 
 notice of dishonor is duly addressed and deposite.l in the post-office, 
 the sender is deemed to have given due notice, notwithstanding any 
 miscarriage in the mails. 
 
 § 177. Deposit in post=office; what constitutes.— 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 Department. 
 
 § 178. Notice to subsequent party; time of .— Where a party re- 
 ceives 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 dishonor. 
 
 § 179. Where notice must be sent.— Where a party has added 
 an address to his signature, notice of dishonor must be sent to that 
 address; but if he has not given such address, then the notice must be 
 sent as follows: 
 
 1. Either to the post-office nearest to his place of residence, 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 &ent to either place; or 
 
 3. If he is. sojourning in another place, notice may be sent to the 
 place where he is so sojourning. 
 
 But where the notice is actually received by the party within the 
 time specified in this act, it will lie sufficient, though not sent in 
 accordance with the requirements of this section. 
 
 § 180. Waiver of notice.— Notice of dishonor may be waived, 
 either l)efore the time of giving notice has arrived or after the omis- 
 sion to give due notice, and the waiver may be express or implied. 
 
 § 181. Whom affected by v^aiver.— Where the waiver is embodied 
 in the instrument itself, it is binding upon all parties; but where it 
 is written above the signature of an indorser, it binds him only.
 
 366 THE AEUOTIABLE INSTRUMENTS LAW. §§ 182-180. 
 
 § 182. Waiver of protest. — A waiver of protest, whether in the 
 case of a foreign bill of exchange or other negotiable instrument, is 
 deemed to be a waiver not only of a formal protest, but also of pre- 
 sentment and notice of dishonor. 
 
 § 183. When notice is dispensed with. — Notice of dishonor is dis- 
 pensed with wiu'n, after tlie exercise of reasonable diligence, it cannot 
 be given to or does not reach the parties sought to be charged. 
 
 § 184. Delay in giving notice; how excused.— Delay in giving no- 
 tice of dishonor is excused when the delay is caused by circumstances 
 beyond the control of the liolder and not imputable to his default, mis- 
 coliduet or negligence. When the caiise of delay ceases to operate, no- 
 tice must be given with reasonable diligence. 
 
 § 185. 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 tlie drawee is a fictitious person or a person not having 
 capacit}' to contract; 
 
 3. Where the drawer is the person to whom the instrument is pre- 
 sented for payment; 
 
 4. Where the drawer lias no right to expect or require that the 
 drawee or acceptor will honor the instrument; 
 
 5. Where the drawer has countermanded payment. 
 
 § 186. When notice need not be given to indorser. — Notice of 
 dishonor is not required to be given to an indorser in either of the fol- 
 lowing cases: 
 
 1. Where the drawee is a fictitious person or a p rson not having 
 capacity to contract, and the indorser was aware of the fact at the 
 time he indorsed the instrument; 
 
 2. Where the indorser is the person to whom the instrument is pre- 
 sented for payment; 
 
 3. Where the instrument was made or accepted for his accommoda- 
 tion. 
 
 § 187. Notice of non=payment where acceptance refused. — Where 
 due notice of dishonor by non-acceptance has been given, notice of a 
 subsequent dishonor by non-jiayment is not necessary, unless in the 
 meantime the instrument has been accepted. 
 
 § 188. 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. 
 
 § 189. When protest need not be made; when must be made. — 
 
 Where any negotiable instrument has been dishonored it may be pro- 
 tested for non-acceptance or non-payment, as the case may be; but 
 prot«st is not required, except in the case of foreign bills of exchange.
 
 §§ 200-202. THE NEGOTIAHI.E INSTUUMENTS LAW. oGT 
 
 ARTICLE IX." 
 
 Discharge of Negotiable Instruments. 
 
 SeoTION 200. Instrument; how discliargcd. 
 
 201. Wlien person secoiidiuily liable on, discliarged. 
 
 202. Kight of party who discharges instrument. 
 20.'J. Ronuiu-iation by lioldor. 
 
 204. Caiui'llation ; unintentional; burden of proof. 
 
 205. Alteration of instrument ; elTect of. 
 
 206. What constitutes a material alteration. 
 
 § 200. Instrument; how discharged.! — A negotiable instrument is 
 discharged: 
 
 1. By payment in due course by or on behalf of the principal debtor; 
 
 2. By payment in due course by the party accommodated, where the 
 instrument is made or accepted for accommodation ; 
 
 3. By the intentional cancellation thereof by the holder: 
 
 4. By any other act wliich will discharge a simple contract for the 
 payment of money; 
 
 5. When the principal debtor becomes the holder of the instrument 
 at or after maturity in his o\\'n right. 
 
 § 20I. When person secondarily liable on, discharged. — A per- 
 Bon secondarily liable on the instrument is discharged: 
 
 1. By any act which discharges the instrument; 
 
 2. By tlie intentional cancellation of his signature by the holder; 
 
 3. By the discharge of a prior party; 
 
 4. By a valid tender of payment made by a prior party; 
 
 5. By a release of the principal debtor, unless the holder's right of 
 recourse against the party secondarily liable is expressly reserved; 
 
 G. By any agreement binding upon the holder to extend the time 
 of payment or to postpone the holder's right to enforce the instru- 
 ment.j imless the right of recourse against such party is expressly 
 reserved. 
 
 § 202. Right of party who discharges instrument. — Where the 
 instrument is paid by a party secondarily liable thereon, it is not dis- 
 charged; but the party so paying it is remitted to his former rights 
 as regards all prior parties, and he may strjke out his own and all 
 subsequent 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 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows; Arizona, 3422-3428; Colorado. Connecticut, 
 District of Columbia, Florida, Iowa, ^lassachusetts. New Jersey. North 
 Carolina, North Dakota, Oregon, Pennsylvania, Tennessee, Utah. Vir- 
 ginia, and Washington, 110-12;"): :Marvlan<l. 13S-144: Ohio. 3175;- 
 3175p,- Rhode Island, 127-133; Wisconsin, 1079 to 1070-0. 
 
 t Through an error in emzrossing the words in the headnote have 
 been transpo.sed. It was intended to read, " How instrument dis- 
 charged." The error was not corrected by the Act of 1808. 
 
 t By an error in engrossing, the words " imless made witli tlio as- 
 sent of the party secondarily liable, or" after the word "instrument" 
 are omitted in the New York Act. They were not supplied bv Laws 
 1898. c. 336.
 
 368 THE j!*egotiable instruments law. §§ 203-210. 
 
 2. Where it was made or accepted for accommodation, and has 
 been paid by the party acconnuodated. 
 
 § 203. Renunciation by holder. — The holder may expressly re- 
 nounce his rights against any pai'ty to the instrument, before, at or 
 after its maturity. An absolute and unconditional renunciation of 
 his riglits against llio 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. Cancellation; unintentional; burden of proof. — A can- 
 cellation made unintentionally, or under a mistake, or without the au- 
 thority of the holder, is inoperative; but where an instrument or any 
 signature thereon appears to have been canceled the burden of proof 
 lies on the party who alleges that thj cancellation was made unin- 
 tentionally, or under a mistake or without authority. 
 
 § 205. Alteration of instrument; effect of.— Where a negotiable 
 instrument is materially altered without 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 instrunient 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. What constitutes a material alteration. — Any alteration 
 which changes: 
 
 1. The date; 
 
 2. The sum payable, either for principal 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, is a material alteration. 
 
 ARTICLE X.* 
 Bills of Exchange; Form and Interpretation. 
 
 Section 210. Bill 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. 
 
 § 210. Bill of exchange defined. — A bill of exchange is an uncbn- 
 ditional order in writing addressed by one person to another, signed 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona, 3429-3434; Colorado, Connecticut, 
 District of Columbia, Florida, Iowa. Massachusetts, New Jersey, North 
 Carolina, North Dakota, Oregon, Pennsylvania, Tennessee, Utah, Vir- 
 ginia, and Washington. 12fi-131; Maryland. US-l.'iO; Ohio, 3175g- 
 3175v; Rhode Tsland, 134-139; Wisconsin, 1680 to 1680e.
 
 §§ 211-220. THE NEGOTIABLE INSTRUMENTS LAW. 369 
 
 by the person giving it, requiring the person to whom it ia addressed 
 to pay on demand or at a lixed or* determinable future time a sum 
 certain in money to order or to bearer. 
 
 § 211. B;II 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 available for the payment thereof, and the drawee 
 is not liable (jii the bill unless and until he accepts the same. 
 
 § 312. 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 suc- 
 cession. 
 
 § 213. Inland and foreign bills of exchange. — An inland bill of 
 exchange is a bill wiiich is, or on its face purports to be, both drawn 
 und payable within the State. Any other bill is a foreign bill. Unless 
 the contrary appears on the face of the bill, the holder may treat 
 it as an inland bill. 
 
 § 214. When bill may be treated as promissory note. — Where 
 in a bill the drawer and drawee are the same person, or where the 
 drawee is a fictitious person, or a person not having capacity to con- 
 tract, the holder may treat the instrument, at his option, either as a 
 bill of exchange or a promissory note. 
 
 § 215. Referee in case of need.— The drawer of a bill and any in- 
 dorser may insert thereon the name of a person to whom the holder 
 may resort in case of need, that is to say, in case the bill is dishonored 
 by non-acceptance or non-payment. Such person is called the referee 
 in case of need. It is in the option of the holder to resort to the 
 referee in case of need or not, as he may see fit. 
 
 ARTICLE XI. t 
 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. 
 
 22.3. 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. Acceptance; how made, et cetera. — The acceptance of a 
 bill is the signification by the drawee of his assent to the order of 
 
 * The word " or " omitted in the original New York statute eup- 
 ' plied by Laws N. Y. 1898, c. 33(5. 
 
 t The numbers of the sections of this article in other States than 
 New York are as follows: Arizona. 3435-3445; Colorado, Connecticut, 
 District of Columbia. Florida. Towa. ^lassachusetts. New Jersey. North 
 Carolina. North Dakota, Oregon. Pennsylvania. Tennessee. Utah. Vir- 
 frinin. nnd Washington. 132-142: Marvland. I.tI-K)! : Ohio. 3175m^ 
 317tif; Rhode Island, 140-150: Wisconsin. 1680f to lG80p. 
 
 24
 
 370 THE IS^EGOTIABLE INSTRUMENTS LAW. g§ 221-230.. 
 
 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. Holder entitled to acceptance on face of bill.— The holder 
 of a bill presenting the same for acceptance may require that the ac- 
 ceptance be written on the bill, and if such request is refused, may 
 treat the bill as dishonored. 
 
 § 222. Acceptance by separate instruntent.— Where an accept- 
 ance 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 was shown and 
 who, on the faith thereof, receives the bill for value. 
 
 § 223. Promise to accept; when equivalent to acceptance.— An 
 
 unconditional promise in writing to accept 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. Time allowed drawee to accept.— The drawee is allowed 
 twenty-four hours after presentment in wliich to decide whether or 
 not he will accept the bill; but the acceptance if given dates as of the 
 day of presentation. 
 
 § 225. Liability of drawee retaining or destroying 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. 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 re- 
 fusal to accept, or by non-payment. But when a bill payable after 
 sight is dishonored by non-acceptance and the drawee subsequently ac- 
 cepts it, the holder, in the absence of any diflferent agreement, is en- 
 titled to have the bill accepted as of the date of the first presentment. 
 
 § 227. Kinds of acceptances,— An acceptance is either general or 
 qualified. A general acceptance assents without qualification to the 
 order of the drawer. A qualified acceptance in express terms varies the 
 effect of the bill as drawn. 
 
 § 228. What constitutes a general acceptance. — An acceptance 
 to pay at a particular place is a general acceptance unless it expressly 
 states^ that the bill is to be paid there only and not elsewhere. 
 
 § 229. Qualified acceptance.— An acceptance is qualified which is: 
 
 1. Conditional, that is to say, which makes payment by the ac- 
 ceptor 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 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. Rights of parties as to qualified acceptance.— The holder 
 may refuse to take a qualified acceptance, and if he does not obtain an 
 unqualified acceptance, he may treat the bill as dishonored by non- 
 
 • The word " drawee " substituted for " drawer " by Laws N. Y. 1898, 
 c. 336.
 
 §^ 240-242. THE NEGOTIABLE INSTRUMENTS LAW. 371 
 
 acceptance. Where a qualified acceptance is taken, the drawer and 
 indorser.s are dischar},'cd fiuni lial)ility on tho bill, unless tlu-y have 
 expressly or impliedly authorized the holder to take a (jualiliod ac- 
 ceptance, or subsequently assent tlicreto. When the drawer or an in- 
 dorser 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. 
 
 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 he made. 
 
 244. Presentment ; where time is insufficient. 
 
 245. V.'iien jircsentment is excused. 
 
 240. When dishonored by non-acceptance. 
 
 247. Duty of holder where bill not accepted. 
 
 248. Rights of holder where bill not accepted. 
 
 § 240. "When presentment for acceptance must be made. — Pre- 
 eentment for acceptance must be made: 
 
 1. Where the bill is payable after sight or in any other case where 
 presentment for acceptance is necessary in order to fix the maturity 
 of the instrument : or 
 
 2. Wliere thc^ 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. When failure to present releases drawer and indorser. — 
 
 Except as herein otherwise provided, the holder of a bill which is re- 
 quired 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. 
 
 § 242. Presentment; how made. — Presentment for acceptance 
 must be made by or on Ijehalf of the holder at a reasonable hour, on a 
 business day, and before the bill is overdue, to the draweet 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 au- 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona. 3446-3454; Colorado, Connecticut, 
 District of Columbia, Florida. Iowa, Massachusetts, New Jersey. North 
 Carolina, North Dakota, Oregon, I'einisylvania, Tennessee, I'tah. Vir- 
 ginia, and Washington, 143-151: Marvland, 162-170; Ohio, 3176^;- 
 31760 ; Rhode Island, 151-159; Wisconsin, 1681 to 1681-8. 
 
 t The word " drawee " substituted for " drawer " by Laws N. Y. 
 1898, c. 336.
 
 372 THE NEGOTIABLE INSTEUMEM^TS LAW. §§ 243-248. 
 
 thority to accept or refuse acceptance for all, in which case present- 
 ment may be made to him only; 
 
 2. Where the drawee is dead, presentment may be made to his per- 
 sonal representative; 
 
 3. Wliere the drawee has been adjudged a bankrupt or an insol- 
 vent, or has made an assignment for the benefit of creditors, pre- 
 sentment may bo made to liim or to his trustee or assignee. 
 
 § 243. On what days presentment may be made. — A bill may 
 be presented for acceptance on any day on which negotiable instru- 
 ments nuiy be presented for payment under the provisions of sections 
 one hundred and thirty-two* and one hundred and forty-tivef of this 
 act. When Saturday is not otherwise a holiday, presentment for 
 acceptance may be made before twelve o'clock noon on that day. 
 
 § 244. Presentment when time is insufficient. — Wliere the holder 
 of a bill drawn payable elsewhere than at the place of business or the 
 lesidence of the drawee has not time with the exercise of reasonable 
 diligence to present the bill for acceptance before presenting it for 
 payment on the day that it falls due, the delay caused by presenting 
 the bill for acceptance before presenting it for payment is excused and 
 does not discharge the drawers and indorsers. 
 
 § 245. Where presentment is excused. — Presentment for accept- 
 ance is excused and a bill may be treated as dishonored by non-accept- 
 ance in citlier of the following cases: 
 
 1. Where the drawee is dead or has absconded, or is a fictitiouB 
 person or a person not having capacity to contract by bill; 
 
 2. Where after the exercise of reasonable diligence, presentment 
 cannot be made; 
 
 3. Where, although presentment has been irregular, acceptance has 
 been refused on some other ground. 
 
 § 246. When discharged by non=acceptance. — A bill is dishonored 
 by non-acceptance : 
 
 1. When it is duly presented for acceptance, and such an accept- 
 ance as is prescribed by this act is refused or cannot be obtained; or 
 
 2. When presentment for acceptance is excused and the bill is not 
 accepted. 
 
 § 247. Duty of holder where bill not accepted. — 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. Rights of holder where bill not accepted. — When a bill ia 
 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. 
 
 * Number " one hundred and thirty-two " substituted for seventy- 
 two by Laws 1898, c. 336. 
 
 t Number " one hundred and forty-five " substituted for eighty-five. 
 {Id.)
 
 §g 260-2G4. THE XEGOTIAliLE INSTKUMEXTS LAW. 373 
 
 ARTICLE XIII.* 
 Protest of Bills of Exchange. 
 
 Section 200. In wliat cases protest necessary. 
 
 201. Protest; how made. 
 
 202. Protest; by whom made. 
 2V>'.i. Protest; when to 'jc made. 
 
 204. Protest; where made. 
 
 205. Protest l)oth for non-acceptance and non-payment. 
 200. Protest before maturity where acceptor insolvent. 
 
 207. When protest dispensed with. 
 
 208. Protest; where bill is lost, et cetera. 
 
 § 260. In what cases protest necessary.- Where a foreign bill ap- 
 pearing 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-acceotance is dishonored by 
 non-payment, "it must be duly protested for non-payment. If it is not 
 BO protested, the drawer and indorsers are discharged. \\ here a bill 
 does not appear on its face to be a foreign bill, protest thereof in 
 case of dishonor is unnecessary. 
 
 § 261. 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; 
 
 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. Protest; by whom made.— Protest may be made by: 
 
 1. A notary public; or , 
 
 2. By any respectable resident of the place where the bill is dis- 
 honored, in the presence of two or more creditable witnesses. 
 
 § 263. Protest; when to be made.— When a bill is protested, such 
 protest must be made on the day of its dishonor, unless delay is ex- 
 cused as herein provided. When a bill has been duly noted, the pro- 
 test may be subsequently extended as of the date of the noting. 
 
 § 264. Protest; where made.— A bill must be protested at the 
 place where it is di-lionored, except tliat when a bill drawn payable 
 at the place of business or residence of some person other than the 
 drawee, has been dishonored by non-acceptance, it must be protested 
 for non-pa vment at the place where it is expressed to be payable, and 
 no further presentment for payment to, or demand on, the drawee is 
 necessary. 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona, 3455-3403; Colorado. Connecticut, 
 District of Columbia, Florida, Iowa, Massachusetts, New Jersey. North 
 Carolina, North Dakota, Oregon, Pennsylvania, Tennessee, Ltah, \ it- 
 cinia, and Washintrton, 152-100; Maryland. 171-170; Ohio. 3176p- 
 SnOic; Rhode Island, 100-108; Wisconsin, 1081-9 to 1C81-17.
 
 374 THE XEGOTIABLE IXSTRUMEXTS LAW. ' §§ 265-280. 
 
 § 265. Protest both for non=acceptance and non=payment. — A 
 
 bill wliicli has been protested for non-acceptance may be subsequently 
 prote:^ted for non-payment. 
 
 § 266. Protest before maturity where acceptor insolvent.— 
 
 Where the acc<;ptor has been adjudged a bankrupt or an insolvent, or 
 has made an assignment for the benclit of creditors, before the bill 
 matures, the holder may cause the bill to be protested for better se- 
 curity against tlie drawer and indorsers. 
 
 § 267. When protest dispensed with. — Protest is dispensed with 
 by any circumstances which would dispense with notice of dishonor. 
 Delay in noting or jirotesting is ex:cused wlien delay is caused by cir- 
 cumstances 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 dili- 
 gence. 
 
 § 268. 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. 
 
 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 lionor. 
 
 284. Agreement of acceptor for honor. 
 
 285. Maturity of bill payable after sight; accepted for honor. 
 28(5. 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. When bill may be accepted for honor. — Where a bill of 
 exchange has been protested for dishonor by non-acceptance or pro- 
 tested for better security and is not overdue, any person not being a 
 party already liable thereon may, with the consent of the holder, in- 
 tervene and accept the bill supra protest for the honor of any party 
 liable thereon or for the honor of the person forf 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 accept- 
 ance for honor for one party, there may be a further acceptance by a 
 different person for the honor of another party. 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona, 3464-3473; Colorado, Connecticut, 
 District of Columbia, Florida, Iowa, Massacliusetts, New Jersey, North 
 Carolina, North Dakota, Oregon, Pennsylvania, Tennessee, Utah, Vir- 
 ginia, and Washington, lGl-170; Maryland, 180-189; Ohio, 31762/- 
 3177.r/; Rhode Island, 169-178; Wisconsin, 1681-18 to 1681-27. 
 
 t Tlie word " for " omitted in the original New York Act supplied 
 by Laws 1898, c. 336.
 
 o ' 
 
 ^§281-289. THE NEGOTIABLE IXSTUL'MENTS LAW. <> i •> 
 
 S 281. Acceptance for honor; how made. — An accoptunte for 
 lionor supra protest must be in writiii;,' and indicate that it is an ac- 
 ceptance for honor, and must be signed by tliu acceptor for honor. 
 
 § 282. When deemed to be an acceptance for honor of the 
 drawer. Wlicrc an a(ici)taii((' for iionor docs not expressly state for 
 wiiosc honor it is made, it is deemed to be an acceptance for the honor 
 of the drawer. 
 
 § 283. Liability of acceptor for honor.-^ The acceptor for honor 
 is liable to tlie holder and to all j)arties to the bill subsequent to thu 
 party for whose honor he has accepted. 
 
 § 284. 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 bc?n \y,ud 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. 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. Protest of bill accepted for honor, et cetera.— Whore a 
 
 dishonored bill has been accepted for honor supra protest or containa 
 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 
 ease of need. 
 
 § 287. 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 bo presented not later than the day fol- 
 lowing its maturity; 
 
 2. If it is to be presented in some other place than the place where 
 it was protested, then it nuist be forwarded within the time specified 
 in section one hundred and seventy-five.* 
 
 5 288. When delay in making presentment is excused. — The 
 provisions of section one hundred and forty-onet apply where there is 
 delay in making presentment to the acceptor for honor or referee in 
 case of need. 
 
 § 289. 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. 
 
 * Number one hundred and seventy-five substituted for one hundred 
 and four by Laws N. Y. 1898, c. 33G. 
 
 t Xumber one hundred and forty-one substituted for eighty-one by 
 Laws N. Y. 1898, c. 336.
 
 376 THE NEGOTIABLE IIsSTKUMENTS LAW, §§ 300-306. 
 
 ARTICLE XV.* 
 
 Payment of Bills of Exchange for Honor. 
 
 Section 300. Who may make payment for honor. 
 30L Payment for honor; liow made. 
 
 302. Dec'huatiou before payment for honor. 
 
 303. Preference of parties ottering to pay for honor. 
 
 304. Effect on subsequent parties where bill is paid for honor. 
 
 305. Where holder refuses to receive payment supra protest. 
 30G. Rights of payer for honor. 
 
 § 300. Who may make payment for honor. — Where a bill has 
 been protested for non-payment, any person may intervene and pay it 
 supra protest for the honor of any person liable thereon or for the 
 honor of the person for whose account it was drawn. 
 
 § 301. Payment for honor; how made.— The payment for honor 
 supra protest in order to operate as such and not as a mere voluntary 
 pajTnent must be attested by a notarial act of honor, which may be 
 appended to the protest or form an extension to it. 
 
 § 302. Declaration before payment for honor. — The notarial act 
 of honor must be founded on a declaration made by the payer for 
 honor, or by his agent in that behalf declaring his intention to pay the 
 bill for honor and for whose honor he pays. 
 
 § 303. Preference of parties offering to pay for honor.— Where 
 two or more persons offer to pay a bill for the honor of different par- 
 ties, the person whose payment will discharge most parties to the bill 
 is to be given the preference. 
 
 § 304. 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 payer 
 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. Where holder refuses to receive payment supra protest. 
 
 — Where the holder of a bill refuses to receive payment supra pro- 
 test, he loses his right of recourse against any party who would have 
 been discharged by such payment. 
 
 § 306. Rights of payer for honor.— The paj'er for honor, on pay- 
 ing to the holder the amount of the bill and the notarial expenses in- 
 cidental to its dishonor, is entitled to receive both the bill itself and 
 the protest. 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona, 3474-3480; Colorado, Connecticut. 
 District of Columbia, Florida, Iowa, Massachusetts, New Jersey, North 
 Carolina, North Dakota, Oregon, Pennsylvania, Tennessee, Utah, Vir- 
 ginia, and Washington, 171-177; Maryland, 190-190; Ohio, 3177/i- 
 3\77n; Rhode Island, 179-185; Wisconsin, 1G81-28 to 1081-34.
 
 §§ 310-315. THE NEGOTIABLE INSTKUMENTS LAW. 377 
 
 ARTICLE XVI.* 
 
 Bills in a Set. 
 
 Section 310. Bills in sets constituto oiio bill. 
 
 311. lli^rhts of holders whore difTerent parts are negotiated. 
 
 312. Liability of holder who indorses two or more parts of a 
 
 set to dilTerent persons. 
 
 313. Aoeeptance of bills drawn in sets. 
 
 314. Payment by aeeeptor of bills drawn in sets. 
 
 315. Elfeet of discharging one of a set. 
 
 ? iiio Bills in sets constitute one bill.— Where a bill is drawn in 
 a set, each part of the set beint,' numbered and containing a reference 
 to the other parts, the whole of the parts constitute one bill. 
 
 § ?ii. Rights of holders where different parts are negotiated. 
 — Where two or more parts of a set are negotiated to dillercnt 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 aflfects 
 the rights of a person who in due course accepts or pays the part first 
 presented to him. 
 
 § 312. Liability of holder who indorses two or more parts of a 
 set to different persons.- Wh'^rc the holder of a set indorses two or 
 more parts to dillercnt persons he is liable on every such part, and 
 every indorser subsequent to him is liable on the part he has himself 
 indorsed, as if such parts were separate bills. 
 
 § 313. Acceptance of bills drawn in sets.— The aeeeptance may 
 be written on any part, and it must be written on one part only. If 
 the drawee accepts more than one part, and such accepted parts are 
 negotiated to difTerent holders in due course, he is liable on every such 
 part as if it were a separate bill. 
 
 § 314. Payment by acceptor of bills drawn in sets.— Wlien the 
 acceptor of a bill drawn in a set pays it without requiring the part 
 bearing his acceptance to be delivered up to him, and that part at 
 maturfty is outstanding in the hands of a holder in due course, he is 
 liable to the holder thereon. 
 
 § 315. Effect of discharging one of a set.— Except as herein other- 
 wise provided, where any one part of a bill drawn in a set is discharged 
 by payment or otherwise the whole bill is discharged. 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona, 3481-3480; Colorado, Connecticut, 
 District of Columbia. Florida, Iowa, Massachusetts, New Jersey, North 
 Carolina, North Dakota, Oregon, Pennsylvania, Tennessee, Utah, Vir- 
 ginia and \Vasliim,don, 17S-18.S: Alaryland, 197-202: Ohio. 3177o- 
 3177<; Rhode Island, 180-191; Wisconsin, 1681-35 to 1081-40.
 
 378 TKE XEGOTLVBLE lASTKUMENTS LAW. ^§ 320-325. 
 
 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. Promissory note defined.— A negotiable promissory note 
 within the meaning of this act is an unconditional promise in writing 
 made by one person to another, signed by the maker, engaging to pay 
 on demand or at a fixed or determinable future time a sum certain 
 in money to order or to bearer. Where a, note is drawn to the maker'3 
 own order, it is not complete until indorsed by him. 
 
 § 321. 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 de- 
 mand apply to a check. 
 
 § 322. Within what time a check must be presented.— A check 
 must be presented for payment within a reasonable time after its 
 issue or the drawer will be discharged from liability thereon to the 
 extent of the loss caused by the delay. 
 
 § 323. Certification of check; effect of.— Where a check is certi- 
 fied by the bank on wliicli it is drawn the ccrtificationt is equivalent 
 to an acceptance. 
 
 § 324. Effect where the holder of check procures it to be cer- 
 tified.— Where the holder of a check procures it to be accepted or 
 certified the drawer and all indorsers are discharged from liability 
 thereon. 
 
 § 325. When check operates as an assignment. — A check of it- 
 self 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. 
 
 * The numbers of the sections of this article in other States than 
 New York are as follows: Arizona, 3487-3401; Colorado, Connecticut, 
 District of Columbia, Florida, Iowa, Massachusetts, New Jersey, North 
 Carolina, North Dakota, Oregon, Pennsylvania, Tennessee, Utah, Vir- 
 ginia, and Washington, 184-189; Maryland. 203-208; Ohio, 3177^- 
 3]77~; Rhode Island. 192-197; Wisconsin, 1084 to 1084-5. 
 
 t The word " certification " substituted for " certificate " by Lawa 
 N. Y. 1898, c. 336.
 
 ^§ 330-332. THE NEGOTIABLE IX.STKUMENTS LAW. 379 
 
 ARTICLE XVIir.* 
 
 Notes Given for Patent Rights and for a Speculative Con- 
 sideration. 
 
 Section 3.30. Negotiable instruments given for patent rights. 
 
 331. Negotiable instruments given for a speculative considera- 
 
 tion. 
 
 332. How negotiable bonds are made non-negotiable. 
 
 § 330. Negotiable instruments given for patent rights. — A 
 
 promissory note or other negotiable instrument, tlie consideration of 
 which consists wholly or partly of the right to make, use or .sell any 
 invention claimed or represented 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 tlic face of such note or in- 
 strument 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 instruments for a speculative consideration. 
 
 — If the consideration of a promissory note or other negotiable instru- 
 ment 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 member- 
 ship and rights in an association, company or combination to produce 
 or sell any farm product at a fictitious rate, or of a contract or bond 
 to purchase or sell any farm product at a price greater by four times 
 than the market value of the same product at 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=negotiable. — The 
 
 owner or holder of any corporate or muuieipal bond or obligation 
 (except such as are designated to circulate as money, payable to 
 bearer), heretofore or hereafter 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 mentioned is payable only to such owner or 
 holder, or his legal representatives or as.signs. unless such bond, obli- 
 gation or coupon be transferred by indorsement in blank, or payable to 
 bearer, or to order, with the addition of the assignor's place of resi- 
 dence. 
 
 • This article appears only in the statute as enacted in New York 
 and Ohio.
 
 380 THE ^NEGOTIABLE INSTRUMENTS LAW. §§ 3-iO, 341. 
 
 ARTICLE XIX. 
 Laws Repealed; When to Take Effect. 
 
 Section 340. Laws repealed. 
 
 34 L When to take effect, 
 
 § 340. Laws 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. 
 
 Schedule of Laws Repealed. 
 
 Revised Statutes. Sections. Subject-matter. 
 
 R. S., pt. II., ch. 4, tit. II. . All Bills and notes. 
 
 Laws of Chap. Sections. Subject-matter. 
 
 1835 141 All Notice of protest ; how given. 
 
 1857 ...... 416 All Commercial paper. 
 
 1865 309 All Protest of foreign bills, etc. 
 
 1870.!!!.! 438 All Negotiability of corporate bonds; 
 
 how limited. 
 
 1871 84 All Negotiable bonds; how made "non- 
 negotiable. 
 
 1873 595 All Negotiable bonds ; how made ne- 
 gotiable. 
 
 1877 65 1,3 Negotiable instruments given for 
 
 patent rights. 
 
 1887 461 All Effect . of holidays upon payment 
 
 of commercial paper. 
 
 1888 229 All One hundredth anniversary of the 
 
 inauguration of George Wash- 
 ington. 
 
 1891 262 1 Negotiable instruments given for 
 
 a specvilative consideration. 
 
 1894 607 All Days of grace abolished.
 
 INDEX. 
 
 [381]
 
 INDEX 
 
 [References are to paragraphs marked §.] 
 
 ABSCONDING. ^ ,„_ 
 
 of maker or acceptor, as excuse for nonpresentnient, etc., 397. 
 
 ABSENCE. 
 
 from liome of maker or acceptor, as excuse for nonpresentment, 
 
 etc., 3!).3. 
 
 ACCEPTANCE. See also Accept.vnce Supra Protest; Acceptor; Ac- 
 ceptor Supra Protest; Presentment for Acceptance. 
 meaning of, 270. 
 
 applies only to bills of exchange, 256. 
 what hills "do and do not require. 257. 
 liability of drawer before and after, 270, 311, 424, 475. 
 relation of drawee to bill before and after, 271, 272. 
 effect of, 272. 
 
 must be according to tenor of bill, 258. 
 of foreign bills drawn in sets, 66. 
 what acceptance admits — 
 
 signature of drawer, 273, 424. 
 
 funds of drawer in acceptor's hands, 274. 
 
 capacity of drawer, 275. 
 
 capacity of payee to indorse, 153, 16G, 276. 
 
 handwriting and authority of agent of drawer, 277. 
 what acceptance does not admit — 
 
 signature of payee or indorser, 278, 425. 
 
 agency to indorse, 279. 
 
 genuineness of terms in body of bill, 280. 
 
 who mav accept — • i j 
 
 when drawee incapacitated, bill may be treated as dishonored, 
 
 281. 
 
 drawee or his authorized agent may, 281. 
 
 acceptance by two where bill drawn on one, 281. 
 
 acceptance by stranger to instrument, 282. 
 
 acceptance by agent, 283. 
 
 acceptance where drawees are joint parties or partners, 284. 
 when accejitancc may be made — 
 
 may be in blank before execution by drawer, 285. 
 
 or after dishonor, 285, 28(i. 
 
 or after death of drawer, 280. 
 
 drawee has twenty-four hours within which to accept or refuse, 
 287. 
 
 time of acceptance, presumptions as to. 2SS. 
 
 acceptance dates from delivery, and until then is revocable, 285. 
 express, forms of, 298. 
 implied, what will amount to, 299. 
 verbal, 300. 
 
 [383]
 
 [R(fcrc7iccs arc to 
 384: INDEX. parayraphs marked §.] 
 
 ACCEPTANCE — continued. 
 
 statutes as to written, construction of, 301. 
 
 may be on separate paper, 302. 
 
 promises to accept, 303-305. 
 
 absolute and conditional acceptances, 306, 307, 310. 
 
 qualified acceptances, 262, 309. 
 
 bv what law governed, 492. 
 
 fc'.r honor, tiee Acceptance Supra Pkotest. 
 
 presentment for. Hee Presentment for Acceptance. 
 
 ACCEPTANCE, PRESENTMENT FOR. See Presentment for Ac- 
 ceptance. 
 
 ACCEPTANCE SUPRA PROTEST. -S'ee also Acceptance. 
 what is, 289. 
 
 circumstances under which made, 290. 
 forms of, 290. 
 method of, 290. 
 
 acceptor should notify party for whose honor acceptance made, 290. 
 who may accept for honor, 291. 
 may be "for honor of one or all pf.rties, 292. 
 presumed to be for honor of drawer, if party not specified, 292. 
 several acceptors for honor of different parties, 292. 
 rights and liabilities of acceptor for honor, 293, 294. 
 admissions of acceptor for honor, 295. 
 holder not bound to take, 296. 
 
 .\CCEPTOR. See also Acceptor Supra Protest, 
 contract of, 272, 311. 
 is principal debtor, 272, 475. 
 
 presentment for payment not necessary to__bind, 311, 320. 
 not entitled to notice of dishonor, 358, 367. 
 what acceptor admits, 273-277, 424. 
 what acceptor does not admit, 278-280, 425. 
 rights of, as to recovery of money paid on forged paper, 2<8, 280, 
 
 ^424, 425. 
 who may accept, 281-284. 
 when drawer and indorser may sue, 408, 409. 
 when may sue drawer, 409. 
 
 death of, presentment for payment in case of, 318. 
 by what law liability of, governed, 492. 
 acceptor supra protest. See Acceptor Supra Protest. 
 
 ACCEPTOR SUPRA PROTEST, 
 who may be, 291. 
 
 should notify party for whoso honor acceptance made, 290. 
 several acceptors for honor of different parties, 292. 
 rights and liabilities of, 293, 294. 
 admissions of, 295. 
 may sue drawer or indorser if compelled to pay, 409. 
 
 ACCIDENT. 
 
 as excuse for nonpresentment, etc., 385. 
 
 ACCOM]MODATTON PAPER, 
 definition of, 93. 
 
 liabilities and rights of parties to, 9,3-96. 
 issued by one partner without consent of all, 138.
 
 [RefcrruciS arc to ^^^^^^ 335 
 
 jjuruijrupltis inurkeu fe.J 
 
 ACCOMMODATION PAPER — continued. 
 issued by corijuiatioiis, 145. 
 
 notice of aceoniniodsition cliarac-ter, ofl'ect of, 200, 2-f8. 
 whether aceonuuodation character of instrument is an equity at- 
 
 tac-liiii",' after iiialurity, 205, 242. 
 diversion of — 
 
 what amounts to, 249. 
 
 eflcct of. 248, 477. 
 
 notice of, effect of, 248. 
 acceptor or maker of. suit l)y, 272. 398, 409._ 
 indorser of, entitled to notice of dishonor, 370. 
 amount of recovery on, 210, 23U. 
 
 ACCORD AND SATISFACTION, 
 defined, 4(i7. 
 effect of, 4 67. 
 part payment, 4G8. 
 
 ACTIONS. See also Defenses, 
 who may sue, 398-400. 
 who may be sued, 407-409. 
 wlien ritrlit of action accrues, 410-413. 
 when ri^'ht of action exi)ires. 414. 415. 
 cause of action indivisible, 401. 
 at common law acceptor, maker, drawer, and indorsers could not be 
 
 sued in one action, 407. 
 statutory changes of common-law rule, 407. 
 form of action governed by lex fori, 484, 496. 
 
 ADDRESS. 
 
 of check, 30. 
 
 of party entitled to notice of dishonor, 376. 
 
 ADMINISTRATORS. -See Executors and Administrators. 
 
 ADMISSIONS. 
 
 by acceptance, 273-277, 424. 
 of acceptor for honor, 295. 
 
 ADOPTION. 
 
 , of forged signature, eflfect of, 421. 
 
 AFTER SIGHT. 
 
 meaning of, in bills and notes, 327. 
 
 paper payable certain time after sight entitled to grace, 327. 
 
 AGENTS. . . , 
 
 depositing to his private account fimds of undisclosed principal 
 
 may sue bank for dishonor of check, 41. 
 as parties to negotiable instruments, 121-133. 
 who may act as, 121. 
 authority of, how created, 122. 140. 
 authority " i)y procuration." 123. 
 implied authority of, 124. 125. 
 how agent should sign, 12t;. 
 undisclosed priiu-ii>al not liable. 127. 
 when agent individually bound. 128. 
 ratification of agent's acts, 129. 
 revocation of agency, 130. 
 
 25
 
 386 INDEX. 
 
 [Rrfcrrnccs arc to 
 parayraphs marked §.] 
 
 AGENTS — continued. 
 
 banks as collecting agents, 131. 
 
 duty of collecting agent to present for acceptance and payment, 132. 
 
 OA\'nership of paper in hands of collecting agent, 133. 
 
 effect of delivery by, in violation of instructions, 211. 
 
 notice to, 255. 
 
 presentment for acceptance to, of drawee, 2G0. 
 
 authority of, to draw admitted by acceptance, 277. 
 
 authority of, to indorse not admitted by acceptance, 279. 
 
 acceptance by, 283. 
 
 presentment for payment by, 312. 
 
 presentment for pa^Tiient to, 316. 
 
 notice of dishonor by, 365, 366. 
 
 notice of dishonor to, 368, 372. 
 
 when, may sue on negotiable instruments, 402. 
 
 can take nothing but money in payment, 457. 
 
 ALIEN ENEMIES. 
 
 contracts with, void, 163. 
 
 as drawer, acceptor, indorser, etc., 164. 
 
 ALLONGE, 180. 
 
 ALTERATION. 
 
 what constitutes material, 427, 428. 
 
 effect of, 427, 440-442. 
 
 if material, and fraudulently made, is forgery, 420, 427. 
 
 changing date, and time of payment, 429. 
 
 changing place of payment, 430. 
 
 changing amount of principal or interest, 431. 
 
 changing medium of payment, 432. 
 
 changing personality, number, or relations of the parties, 433. 
 
 adding or detaching seal, 434. 
 
 changing joint into joint and several note, etc., 434. 
 
 adding name of witness, 434. 
 
 change in consideration, 435. 
 
 addition of, or change in, words of negotiability, 436. 
 
 immaterial alterations, illustrations of, 437. 
 
 alterations by agreement of parties, 438. 
 
 rights of hona fide holder of altered instrument, 222, 439. 
 
 when material and fraudulently made, effect of, 440. 
 
 when material, but innocently made, effect of, 441. 
 
 immaterial alteration with fraudulent int«nt, effect of, 442. 
 
 burden of proof of, 443. 
 
 ALTERNATIVE. 
 
 drawees, 284. 
 
 AMOUNT. 
 
 to be paid miist be certain, 82-85. 
 
 AMOUNT OF RECOVERY. 
 
 when less than full value paid, 216, 217. 
 
 ANTECEDENT DEBT. 
 
 as a consideration, 100. 
 
 APPLICATION OF PAYMENTS, 
 rights of parties as to, 459, 460.
 
 [Rrfrrrncrs arc to isDKX. 367 
 
 paruyrupltts inurkid §.J 
 
 APPROPRIATION OF PAY^IEXTS. 
 rights of parties as to, 45li, 4tJ0. 
 
 ASSIGNEE. 
 
 takes sul)ject to all equities, 168. 
 
 of bank HI] it, notice of dishonor to, 371. 
 
 ASSIGNMENT. 
 
 eirect of bills and nonnegotial)lc orders as, 10-14. 
 assignee takes subject to all equities, 168. 
 
 AT SIGHT. See Sight. 
 
 ATTORNEY'S FEES. 
 
 effect on negotiability, of stipulation to pay, 84, 85. 
 
 AUTHORITY. 
 
 of one partner to bind tirni, 134-13<. 
 of agents, 122-125, 146. 
 
 BANK BILLS OR NOTES. 
 
 description and cliaracteristics of, 24, 25. 
 
 BANK CHECKS. See Checks. 
 
 BANKRUPTCY. 
 
 dissolves partnership, 140. 
 
 presentment for acceptance in case of dissolution of partnership 
 
 by, 259. 
 presentment for payment in case of, 315. 
 notice of dishonor in case of, 371. 
 
 BANKRUPTCY AND INSOLVENCY LAWS. 
 
 power of Congress and of States to enact, 465. 
 discharge of debtor under, 466. 
 
 BANKS. 
 
 receiving bills and notes for collection are holders for value, 98. 
 as collecting agents, 131. 
 
 duty of, to jiresent for acceptance and payment, 132. 
 owiiership of paper in hands of collecting banks, 133. 
 presentment for payment when instrument payable at, 322, 342. 
 usage of, may alter' law merchant as to days of grace, 328. 
 demand by. by notice through mails, 343, 344. 
 notice of dishonor by, 306. 
 
 BEARER. 
 
 instrument payable to, transferable by delivery, 168. 
 indorsement in blank makes instrument payable to, 183. 
 who may sue on instrument payable to, 398, 403, 404. 
 
 BILLS OF CREDIT. 
 
 definition and nature of, 43. 
 States prohibited from emitting, 42. 
 
 BILLS OF EXCHANGE. See also Negotiable Instruments. 
 definition of, 1.5. 
 origin and liistury of. 2, 3.
 
 ono .x'TMTv ^References are to 
 
 ^^^ iiNUi.A. paragraphs marked §.] 
 
 BILLS OF EXCHANGE — cor? fi»n<ed. 
 foreign and inland, Avliat are, 5, 7. 
 
 difference between^ G. 
 
 when character of, as foreign or inland, not disclosed on face, 9. 
 
 sets in foreign, C4-C6. 
 parties to, 15, oti. 
 
 difference between, and promissory notes, 17. 
 difference between, and checks, 28. 
 
 effect of. as assignment of fund in drawee's hands, 10-14. 
 must contain direction to pay, 75. 
 
 BILLS OF LADING. 
 
 definition and nature of, 50. 
 how far negotiable, 51. 
 
 transfer of, operates as constructive delivery of goods, 51, 52. 
 vendor's right of stoppage in transitu defeated by bona fide transfer 
 of, 51. 
 
 BLANK. 
 
 indorsement in, 183. 
 
 who may s\ie on instrument indorsed in, 398, 403. 
 
 rights of holder under blank indorsement^ 404. 
 
 indorsement in, by payee does not afi'ect his right to sue, 403. 
 
 filling up blank indorsement, 404. 
 
 blank acceptances, 285. 
 
 instruments intrusted to another and wrongfully filled up, 209. 
 
 BONA FIDE HOLDER. 
 
 what constitutes aj 199, 226. 
 
 general statement as to rights of, 197, 198. 
 
 bona fides essential, 227. 
 
 effect of negligence on bona fides, 228, 229. 
 
 must acquire instrument for valuable consideration, 230. 
 
 when price paid by, conveys notice of fraud, 231, 232. 
 
 purchase must be piirchase in fact, and not mere bookkeeping 
 entry, 233. 
 
 instruments taken as collateral security for contemporaneous and 
 pre-existing debts, 234, 235. 
 
 amount of recovery when instrument held as collateral security, 236, 
 
 must acquire instrument in usual course of business, 237. 
 ^transfers not in usual course of business, examples of, 238. 
 ^ must acquire instrument before maturity, 239. 
 
 but transferee after maturity acquires all his transferrer's title, 201, 
 239. 
 
 ■when instruments payable at sight or on demand deemed over- 
 due, 240. 
 
 presumption that instrument is acquired before maturity, 241. 
 
 rule as to accommodation paper acquire 1 overdue, 242. 
 
 rule when instalment of principal or interest is overdue, 243. 
 
 transfers on last day of grace, 244. 
 
 must acquire instrument without notice of equities, 245. 
 
 notice of dislionor by nonacceptance or non])ayment, 245. 
 
 notice of fraud, defect of title, illegality of consideration, etc., 246. 
 
 time when notice must exist, 247. 
 
 notice of accommodation character of instrument, 200, 248. 
 
 notice of diversion of aocomnindation paper, 248. 
 
 what amounts to diversioUj 249. 
 
 express notice, 250.
 
 [References are to indfx 389 
 
 parayraphs marked §.] 
 
 BONA FIDK HOLDER — con I inucd. 
 implied notice, 251, 252, 254. 
 
 notice of particular fraud, illegality, etc., not necessary, 253. 
 notice to agent, 255. 
 
 one in ])()ssc.ssion and proilu(in<r instrument presumed to l>e a, 199. 
 what rebuts tiie presuniplion, 200. 
 
 one tliougli not himself a bona fide holder acquires title of his trans- 
 ferrer. 201. 203. 
 riplits of indorsee after maturity, 201-205. 
 rights of — 
 
 where inslnur.ent originated in frauil or mistake, 206, 210, 220. 
 
 Avhere undelivered instruments stolen and put in circulation, 
 207, 208, 223. 
 
 •where instrument delivered with blanks, which are fraudulently 
 filh-d, 20t). 
 
 where instrument delivered in escrow, and put in circulation 
 in violation of instructions, 211-213. 
 
 where instrument executed by infant, insane person, married 
 woman, etc., 210. 
 
 where iiistruiiieiit declared void by law, 221. 
 
 where instrument forged or materially altered, 222. 
 
 where instrument executed under duress. 224. 
 
 where there is want or failure of consideration, 248, 446. 
 defenses against, excluded by estoppel, 214, 215. 
 defenses available against. 218-224. 
 
 infancv, coverture, insanity, etc., of maker, 219, 444. 
 
 fraud," when, 220, 446. 
 
 instrument declared void by law, 221, 446. 
 
 want of consent of maker — forgery, alteration, etc.. 222. 4.39. 
 
 instrument stolen while incomplete and undelivered, 208, 223. 
 
 duress, 224, 447. 
 
 real defenses admissible against, 225. 
 amount of recovery by, 216, 217, 236. 
 set-ofT cannot be pleaded against, 473. 
 whether one is, determined by lex loci contractus, 497. 
 
 I50XDS. -Sfee Coupon Bonds ; Municipal Bonds. 
 
 BURDEN OF THOOF. 
 
 as to bona /ide ownership, 199, 200. 
 
 of diligence, as excuse for nonpresentment. etc., 302. 
 
 as to prom])tness in presentment for payment or excuse for delay, 
 
 ,320. 
 as to alteration. 443. 
 as to consideration. 445. 
 as to payment, 453. 
 
 BUSINESS. 
 
 bona fide holder must acquire paper in usual course of, 237. 
 transfers not in usual course of, examples, 238. 
 
 BUSINESS HOURS. 
 
 what are, is question for jury, 322. 
 
 what are, 322. 323. 
 
 presentment for payment must be made during, 322, 323. 
 
 BUSINESS. rL.\CE OF. 
 
 presentment for acceptance at, 264. 
 presentment for payment at, 316, 334, 335.
 
 ^^_ , [References are to 
 
 '^"^" INDEX. paragraphs marked §.] 
 
 BUSINESS. PL.\CE OF — cojitinucd. 
 
 presentment may be made to person found at, 317. 
 presentment at, should be durin<^ business hours, 323. 
 notice of dishonor to, 372, 37G, 378. 
 
 CALAMITY. 
 
 as excuse for nonpresentment, etc., 385. 
 
 CALENDAR MONTH. See Month. 
 
 CAPACITY. 
 
 of payee to indorse warranted by drawer, acceptor, and maker, 153, 
 
 1(30, 276. 
 of drawer to draw warranted by acceptor, 275. 
 warranty of, by indorse r, 177. 
 
 CASHIER. 
 
 of bank, authority of, to certify checks, 38. 
 
 CAUSE OF ACTION. 
 
 cannot be split up, 401. 
 
 recovery for part bars action for remainder, 401. 
 
 interest may be recovered without barring action for principal, 401. 
 
 CERTAINTY. 
 
 as to engagement to pay, 75, 76. 
 as to fact of payment, 77-81. 
 as to amount to be paid, 82-85. 
 as to medium of payment, 86-89. 
 
 CERTIFICATE OF PROTEST. See Protest. 
 
 CERTIFICATES OF DEPOSIT, 
 definition of, 26. 
 origin and nature of, 26. 
 negotiability of, 27. 
 
 CERTIFICATES OF STOCK. 
 
 description and nature of, 45. 
 transfer of — 
 
 as between transferrer and transferee, 4G. 
 
 as between transferee and creditor of transferrer, 47. 
 
 as between transferee and third party who has purchased the 
 
 shares, 48. 
 usual methods of transfer, 49. 
 
 CERTIFICATION OF CHECKS. See Checks. 
 
 CHECKS. 
 
 definition of, 28. 
 
 differences between bills of exchange and, 28. 
 
 is a draft or order, 29. 
 
 must be drawn on a bank or banker, 30. 
 
 purports to be drawn on a deposit of funds, 31. 
 
 must be for payment at all events of a certain sum of money, 32. 
 
 payable to a certain person therein named, or to him or his order, 
 
 or to bearer, 33. 
 is payable instantly on demand, 28, 34. 
 when" should be presented for payment, 39. 
 laches in presenting for payment, effect of, 28, 39.
 
 Ufrfnrmrs arc to ivdex '>.t»l 
 
 paragraphs marked §.] i.mjj^a. oyx 
 
 CHECKS — continued. 
 
 when statiito of limitations begins to run on, 28. 
 
 not entitled to grace, 34. 
 
 stale, status of, 39. 
 
 whether holder of uncertified check may sue bank, 40. 
 
 damages for improper dishonor of, 41. 
 
 elTcct of, as assignment of fund, 10-14. 
 
 payment by, 457. 
 
 certification of — 
 
 bank under no obligation to certify, 35. 
 
 similar to acceptance of bill, 35. 
 
 effect of, 36, 37. 
 
 bank becomes solely liable. 30. 
 
 drawer and indorsers discharged, 30, 37. 
 
 form of, 38. 
 
 by whom made, 38. 
 
 CHOSE IN ACTION. 
 
 not assignable at common law, 1. 
 relaxation of common-law rule, 1. 
 
 CIRCUMSTANCES. 
 
 may amount to notice, 251, 252, 254. 
 
 excusing nonpresentment, etc. See Excuses for Nonpresentment, 
 Protest, and Notice. 
 
 CIVIL WAR. See War between the States. 
 
 CLERK. 
 
 presentment to, 316. 
 notice of dishonor to, 372. 
 
 COLLATERAL SECURITY. 
 
 instruments taken as, for contemporaneous and pre-existing debts, 
 
 234, 235. 
 amount of recovery on instruments taken as, 236. 
 parting with, effect of, on suret5''s liability, 478. 
 receipt of, by maker or acceptor as excuse for nonpresentment, etc., 
 
 396. 
 
 COLLECTION AGENTS, 
 banks as, 131. 
 
 duty of, to present for acceptance and payment, 132. 
 OA\Tiership of paper in hands of, 133. 
 
 COMITY OF NATIONS, 485. 
 
 COMMERCE. 
 
 interdiction of, as excuse for nonpresentment, etc., 384. 
 
 CO^mERCIAL PAPER. See Negotiable Instruments. 
 
 COM^ION LAW. 
 
 choses in action not assignable at, 1. 
 whether promissorj- notes negotiable at, 4. 
 
 COMPOUNDING OF CRIMES, 
 as a consideration, 103.
 
 300 Tvnrv [References are to 
 
 ^^* paragraphs marked §.I 
 
 COMPROMISE. 
 
 as a consideration, 07. 
 by part payment, 4G8. 
 
 COMPUTATION. 
 
 of time, 329-331. 
 
 CONDITION. 
 
 instrument payable on. not negotiable, 77. 
 delivery on, 71, 211-213. 
 
 CONDITIONAL ACCEPTANCES, 30G-309. 
 
 CONDITIONAL INDORSEMENT, 
 defined, 184. 
 examples of, 184. 
 condition in, docs not affect negotiability, 184. 
 
 CONDITIONAL PAYMENT, 457. 
 
 CONFEDERATE WAR. See War between the States. ■ 
 
 CONFLICT OF LAWS. 
 
 importance of subject, 483. 
 
 general principles, 484. 
 
 comity of nations, 485. 
 
 lex loci contractus governs as to validity, interpretation, nature, 
 
 obligation, etc., 105, 106, 48C. 
 interpretation, meaning of, 486. 
 nature and obligation, meaning of, 487. 
 what constitutes place of execution, 488. 
 
 domicile of maker or acceptor presumed to be place of execution, 480. 
 what is loci contractus of maker, acceptor, drawer, and indorser, 492. 
 when lex loci solutionis governs, 490. 
 when lex loci rci sitae governs, 491. 
 lex fori governs as to remedy, including parties plaintiff, statute of 
 
 limitations, form of action, evidence, set-off, exemptions, etc., 403- 
 
 496, 498. 
 lex loci contractus determines whether one is a hona fide holder, 407. 
 by what law presentment, protest, and notice of dishonor governed, 
 
 500. 
 
 CONGRESS. 
 
 power of, to enact bankruptcy laws, 465. 
 
 CONSENT. 
 
 want of, as defense against hona fide holder, 222. 
 
 CONSIDERATION. 
 
 defined, 90. 
 
 must be proved in nonnegotiable contracts, 90, 91. 
 
 seal imports a, 1, 90. 
 
 presumed in negotiable instruments, 1, 90, 91, 445. 
 
 between what parties consideration open to inquiry, 1, 93, 110-113, 
 
 445. 
 accommodation paper, 9.3-96. 
 valuable, examples of, 97-100, 118. 
 pre-existing debts as a, 100. 
 instruments taken as collateral security for contemporaneous and 
 
 pre-existing debts, 234, 235.
 
 [Referencca air to .xrxnv 9.(k'l 
 
 paragraphs marked g.J 
 
 CONSIDERATION — continued. 
 illegal, exiuuples of, 101-104. 
 legality of, piesunicd, 445. 
 by what law legality of, determined, 105, 106. 
 failure of, lOS, 445. 
 
 partial want, failure, or illegality of, 107-109, 445. 
 of renewal notes, 114, 115. 
 burden of proof as to, 445. 
 change in, constitutes material alteration, 435. 
 
 CONSTITUTION OF UNITED STATES. 
 
 States prohihited by. from emitting bills of credit, 42. 
 provision in. empowering Congress to pass bankrupt laws, 465. 
 
 CONSTRUCTIVE NOTICE. Sec Notice. 
 
 CONTAGIOUS DISEASE. 
 
 existence of, as excuse for nonpresentment, etc., 385. 
 
 CONTEMPORANEOUS DEBT. 
 
 collateral security taken for. 234. 
 
 CONTRIBUTION. 
 
 none between successive indorsers, 188, 475. 
 equal indorsers entitled to, 188. 
 when right of action for, accrues, 481. 
 
 COPARTNERSHIP. See Partners, 
 
 COPROMISORS. 
 
 presentment for pajTnent to, 319. 
 
 CORPORATIONS. See also Municipal Corporations. 
 
 public and private, definitions and examples of, 142. 
 
 power of, to execute negotiable instruments, 143. 144. 
 
 negotiable instruments of, presumed to be issued in course of its 
 business, 145. 
 
 acconnnodation paper issued by, 145. 
 
 agents of, appointment and authority of. 146. 
 
 doctrine that, can only bind themselves by contract under seal, ob- 
 solete. 21. 
 
 whether instrument of, under seal negotiable, 73. 
 
 COSTS. 
 
 of collection, stipulations as to, 84, 85. 
 
 COUPON BONDS. 
 
 by whom issued, 18. 
 
 description of_. 19. 
 
 meaning of term " coupon," 20. 
 
 closely assimilated to promissory notes, 20. 
 
 negotiability of, 21. 
 
 COURSE OF BUSINESS. . 
 
 bona fide holder must acquire instrument in usual course of busi- 
 ness, 237. 
 transfers not in usual course of business, 238. 
 
 COVENANT NOT TO SUE. 
 elfect of. 470.
 
 OQ4 TivrnTTv [References are to 
 
 '^^ iKUi!.-V. paragraphs marked §.] 
 
 COVERTURE. See Makbied Women. 
 CREDIT, BILLS OF. See Bills of Credit. 
 
 CURRENCY. 
 
 instrument payable in, not negotiable, 27, 87. 
 
 CUSTOM. 
 
 authority implied from, 125. 
 
 DATE. 
 
 of negotiable instruments, 62, 70. 
 
 change in, constitutes material alteration, 429. 
 
 DAYS. 
 
 computation of, 330. 
 
 DAYS OF GRACE. See Grace, Days of. 
 
 DEATH. 
 
 revokes agency, 130. 
 dissolves partnership, 140. 
 of holder — 
 
 as excuse for nonpresentment, etc., 395. 
 
 presentment for payment in case of, 315. 
 
 notice of dishonor in case of, 366. 
 of maker or acceptor, presentment for payment in case of, 318. 
 of drawee, presentment for acceptance in case of, 261. 
 of drawer, bill may be accepted after, 286. 
 of drawer or indorser, notice of dishonor in case of, 371. 
 of partner, presentment for payment in case of, 315, 319. 
 
 DEBTS. 
 
 pre-existing, as a consideration, 100. 
 
 instruments taken as collateral security for contemporaneous and 
 pre-existing, 234, 235. 
 
 DEFAULT. 
 
 in presentment, etc. See Excuses for Nonpresentment, Protest, 
 AND Notice. 
 
 DEFENDANTS. 
 
 to actions on negotiable instruments, 407-409. 
 
 DEFENSES. 
 
 real and personal, defined, 225. 
 
 between immediate parties, 113. 
 
 against indorsee of overdue paper, 204. 
 
 against bona fide holder for value, 218-224. 
 
 excluded by estoppel, 214. 
 
 classification of, 416, 417. 
 
 defendant did not make the instrument — 
 
 forgery, 418-426. See Forgery. 
 
 materia] alteration, 427-443. See Alteration. 
 the contract sued upon is in law nonenforceable — 
 
 incapacity of party, 444. See Parties to Negotiable Instru- 
 ments. 
 
 want, failure, or illegality of consideration, 445. See Consid- 
 eration. 
 
 fraud, 440. See Fraud. 
 
 duress, 447. See Duress.
 
 [References are to i^rnFY '^Qn 
 
 paragraphs marked §.] i^utx. 6\)o 
 
 DEFENSES — continued. 
 
 plaintiff not entitled to sue — 
 
 le<;al title to instrument not vested in plaintifT, 448. 
 the obli;,'atioii created lias been discharged — 
 by ])ayinent, 449-403. .S'ce 1'ayment. 
 by tender, 404. tiee Tender. 
 by bankruptcy or insolvency, 405, 400. »S'cc Bankruptcy and 
 
 Insolvency Laws. 
 by accord and satisfaction, 407, 408. /See Accord and Satis- 
 faction. 
 by release. 40!). aS'cc Release. 
 
 by covenant not to sue, 470. See Covenant not to Sue. 
 by novation, 471. See Novation. 
 by set-oflr, 472-474. See Set-off. 
 
 defendant is a surety, and is discharged, 475-480. See Surety. 
 action barred by statute "of limitations, 414, 415, 481, 482. See Stat- 
 ute of Limitations. 
 
 DELAY. 
 
 in presentment, etc. See ExcrrsES FOR Nonpresentment, Protest, 
 AND Notice. 
 
 DELIVERY. 
 
 necessity of, 09, 71, 109. 
 
 constructive, 09. 
 
 instrument takes eflfect on, 70. 
 
 presumptions as to, 70. 
 
 in escrow, 71, 212. 
 
 in violation of instructions, 211. 
 
 transfer by, without indorsement, 108. 
 
 transferrer by, warranties of, 424. 
 
 law of place of, governs, 488. 
 
 place of execution is where delivery made, 488. 
 
 presumption as to place of, 488. 
 
 DEMAND. 
 
 checks always payable on, 28, .34. 
 when instruments payable on, deemed overdue, 240. 
 bills payable on, do not require presentment for acceptance, 257. 
 instrument payable on, where no time specified, .321. 
 presentment for payment wlien instrument paj'able on, 321, 324, 325. 
 instrument payable on. not entitled to grace, 324. 
 when statute of limitations begins to run on instrument payable 
 on, 415. 
 
 DEMAND OF PAYMENT. See Presentment for Payment. 
 
 DEPOSIT. 
 
 check purports to be dra^vn on, 31. 
 
 DEPOSIT, CERTIFICATES OF. See Certificates of Deposit. 
 
 DEPOSITARY. 
 
 of negotiable instrument cannot sue, 398. 
 
 DEPRECIATED CURRENCY. 
 
 acceptance of, by creditor, absolute, 458. 
 
 DESTRUCTION. i 
 
 of bill, whether amounts to implied acceptance, 299.
 
 QQfi TXBFX [References are to 
 
 ^^" iMJi-x. paragraphs marked §.I 
 
 DETENTION. 
 
 of bill, whether amounts to implied acceptance, 299. 
 
 DILIGENCE. 
 
 in presentment for acceptance. 200. 
 in presentment for payment, 337, 392. 
 
 DISABILITY. See Incapacity. 
 
 DISCHARGE. 
 
 of drawer and indorsers by certification of check, 37. 
 of surety, 475-480. 
 
 by payment, 449-4G3. See Payment. 
 by tender, 464. Sec Tender. 
 
 by bankruptcy or insohency, 405, 4G6. See Bankruptcy and In- 
 solvency Laws. 
 by accord and satisfaction. 467, 468. See Accord and Satisfaction. 
 by release, 469. See Release. 
 
 by covenant not to sue, 470. See Co\^nant not to Sue. 
 by novation. 471. See Novation. 
 by set-off., 'il2.-^li. See Set-Off. 
 
 DISEASE. 
 
 existence of, as excuse for nonpresentment, etc., 385. 
 
 DISHONOR, NOTICE OF. See Notice of Dishonor. 
 
 DISSOLUTION OF PARTNERSHIP, 
 how caused, 140. 
 when notice of, necessary, 140. 
 effect of, 140, 141. 
 
 DISTURBANCES. 
 
 military and political, as excuse for nonpresentment, etc., 384, 385- 
 
 DIVERSION. 
 
 of accommodation paper — 
 what amounts to, 249. 
 effect of, 248, 477. 
 
 DOCK RECEIPTS. See Warehouse Receipts. 
 
 DOMICILE. 
 
 of maker or acceptor — 
 
 change of, as excuse for nonpresentment, etc., 397. 
 when presumed to be place of execution^ 489. 
 
 DONATIO CAUSA MORTIS. 
 
 of negotiable instrument, suit by donee, 398. 
 
 DORMANT PARTNER. 
 
 notice of retirement of, not nece.ssary, 140. 
 
 DRAWEE. 
 
 relation of, to bill before and after acceptance, 271, 272. 
 
 where incapable of contracting, holder may treat bill as dishonored, 
 
 281. 
 joint drawees, acceptance in case of, 284. 
 alternative drawees, 284. 
 has twenty-four hours within which to accept or refuse, 287.
 
 [Rrfrrcncrs are to ivm-v 007 
 
 par(ii/rui)hs marked ^.] imj^-a. oJ i 
 
 DRAUKR. 
 
 liability of, before and after acceptance, 270, 311, 424, 475. 
 
 when bound witlioiit presentment for acceptance, 258. 
 
 signature and capacity of, admitted by acceptance, 273, 275. 
 
 bill may be accepted after death of, 280. 
 
 discharged unless bill presented at maturity and notice of dishonor 
 
 given, 311. 320, 358. 350, 307. 
 action aj,'ainst, for nonacceptance, 413. 
 when can .sue acceptor, 408, 400. 
 when acceptor and indorser can sue, 408, 409. 
 when estopped to dcnv genuineness of indorsement or acceptance, 
 
 424. 
 by what law liability of, governed, 492. 
 
 DRUXKEX I'ERSOXS. 
 contracts of, 101. 
 
 degree of drunkenness sufTicient to constitute valid defense, IGl. 
 ratification of contracts made while drunk. 102. 
 
 DUE BILL. 
 
 whether a promissory note, 70. 
 
 when suit may be commenced on, 411. 
 
 DURESS. 
 
 defined, 447. 
 
 defense of, 224, 447. 
 
 to principal, effect of, on surety's liability, 477. 
 
 ENTIRE DEMAND. 
 
 what constitutes, 401. 
 
 cannot be .split up, 401. 
 
 recovery for part bars action for remainder, 401. 
 
 interest may be recovered without barring action for principal, 401. 
 
 EPIDEMICS. 
 
 existence of, as excuse for nonpresentment, etc., 385. 
 
 EQUITABLE ASSIGNMENT. 
 
 effect of bills and nonnegotiable orders as, 10-14. 
 
 EQUITIES. 
 
 bona fide holder takes discharged of, 1, 197, 198. 
 assignee takes subject to, 168. 
 
 indorsee of overdue paper takes subject to what equities, 202. 204. 
 whether accommodation character of instrument is an equity attach- 
 ing after maturity, 205, 242. 
 
 ESCROW. 
 
 delivery in. 71, 212. 
 
 difference between specialties and negotiable instruments delivered 
 
 in, 213. 
 deliver}' by custodian in violation of instructions, 211-213. 
 
 ESSENTIAL REQUISITES OF NEGOTIABLE INSTRUMENTS, 
 must be open — i. e., unsealed. 73. 74. 
 engagement to pay must be certain. 75. 76. 
 fact of payment must be certain, 77-81. 
 amount to be paid must bo certain, 82-85. 
 medium of payment must be money. 86-89.
 
 • , , \ References are to 
 
 39b IKDEX. iHiriiiiruphs marked §.] 
 
 ESTOPPEL. 
 
 defenses excluded by, 214. 
 
 good faith essential to. 215. 
 
 by adoption of forged signature as genuine, 422. 
 
 to deny genuineness of signature, position of drawer, indorser, 
 
 drawee, acceptor, and transferrer, 273, 423, 424. 
 by acceptance, 273-277. 
 
 EVIDENCE. See also Parol Evidence. 
 
 statute of limitations cannot be given in, under general issue, 414. 
 place of date prima facie evidence of maker's residence and place of 
 
 business. 337. 
 protest exclusive evidence of dishonor of foreign bill, 347. 
 certificate of protest as, 355-357. 
 possession prima facie evidence of ownership, 406. 
 questions of, governed by lex fori, 496. 
 
 EXCHANGE. 
 
 instrument payable with, negotiable, 83. 
 
 EXCHANGE, BILLS OF. -See Bills of Exchange. 
 
 EXCUSES FOR NONPRESENTMENT, PROTEST, AND NOTICE, 
 
 war, 384. 
 
 interdiction of commerce, 384. 
 
 military disturbances, 384. 
 
 political disturbances, 385. 
 
 epidemics, 385. 
 
 overwhelming calamities, 385. 
 
 when drawer has no right to require, 387. 
 
 when presentment, protest, and notice have been waived, 388. 389. 
 
 when no one in existence upon whom to make demand, 390. 
 
 when bill or note is void, and drawer or indorser knows it to be so,. 
 391. 
 
 when party cannot be found after due diligence, 392. 
 
 when place of business or payment closed, 393. 
 
 when party traveling, absent from home, etc., 393. 
 
 when instrument acquired too late to make demand or give notice, 
 394. 
 
 sudden illness or death of liolder, 395. 
 
 when drawer or indorser has received funds to pay instrument, or 
 has received .security or indemnity, 396. 
 
 when maker or acceptor has absconded or removed his domicile, 397. 
 
 when impediment ceases, duty to make demand or give notice re- 
 vives, 383. 
 
 inability to find maker or acceptor does not excuse want of notice 
 to drawer or indorser, but inability to find latter does, 393. 
 
 EXECUTION. 
 
 formalities of. governed by lex loci contractus, 486. 
 
 place of, what constitutes, 488. 
 
 place of, when domicile of maker or acceptor presumed to be, 489. 
 
 exemptions from, governed by lex fori, 498. 
 
 EXECUTORS AND ADMINISTRATORS. 
 
 cannot bind estate by negotialjle instrument, 117. 
 
 are individually bound, 117, 118. 
 
 how individual liability excluded, 118. 
 
 may transfer instrument pavnblc 1o order of deceased, 119. 
 
 one of several, may transfer by indorsement, 119.
 
 [Hrfrrrncrs are to iv,„.v *o,Ui 
 
 puraijraijtt.s marked §.] i.m)i..\. oJJ 
 
 i:XECUTOHS AND ADMINISTRATORS — con^i/iuct/, 
 prescntiiRiil foi- aciciitaNcc to. 201. 
 presentment for payment by, .S15. 
 presentment for payment to, 318. 
 notice of dishonor by, 'M\i'i. 
 notice of dishonor to, 371. 
 
 EXEMI'TIOXS. 
 
 from execution, j^overned by hx fori, 498. 
 
 EXPRESS ACCEPTANCE. See Acceptance. 
 
 EXPRESS NOTICE. See Notice. 
 
 FALSE REPRESF:NTATI0NS. See Fraud. 
 
 FEDERAL COURTS. 
 
 rules of decision of, in respect to negotiable instruments, 8. 
 sometimes disregard State statutes in applyin<r law merchant, 25fi. 
 have jurisdiction of suits between citizens of dillerent States, 483. 
 
 FEES, ATTORNEY'S. 
 
 effect on negotiabilitj-, of stipulation to pay, 84, 85. 
 
 FELONIES. 
 
 compounding, illegal., 103. 
 
 FEME COVERT. See Married ^YoMEN. 
 
 FEME SOLE. 
 
 presentment for payment in case of marriage of, 315. 
 
 FICTITIOUS NAME. 
 
 signing of, with intent to defraud, is forgery, 419. 
 
 FIDUCIARIES AS PARTIES. See Executors and Administrators: 
 Guardians ; Trustees. 
 
 FORBEARANCE. 
 
 to sue, as a consideration, 97. 
 
 FOREIGN BILLS OF EXCHANGE. Sec Bili.s of Exchange. 
 
 FOREIGN LAWS. 
 
 courts will not take judicial notice of, 499. 
 
 FORGERY. 
 
 definition ofj 418. 
 
 illustrations of, 418, 419. 
 
 alteration is, when, 420, 427. See Alteration. 
 
 making must be counterfeit and false in order to amount to, 420. 
 
 if real, though fraudulently procured, does not amount to, 420. 
 
 intent to defraud, and uttering, essential, 421. 
 
 adoption of forged signature, 422. 
 
 estoppel to deny genuineness of signature, position of drawer, in- 
 
 dorser, drawee, accejUnr. and transferrer, 423. I2."i. 
 acceptance no admission of indorser's signature. 42."). 
 recovery of money paid on forged instrument. 27S. 280. 424-42G. 
 good defense against bona fide holder. 222.
 
 A(\(\ ' -, r [_Refcrnf(Ts are to 
 
 "^^^ liN'DEX. pcira(jrai)}is marked §.] 
 
 FORMAL REQUISITES OF NEGOTIABLE INSTRUMENTS, 
 no particular form required, 57. 
 siirnature, 58. 
 
 material on \\hioh written, 58. 
 whole instrument must be in writing, 59. 
 date, 62. 
 
 words of negotiability, G3. 
 stamps, 67, 68. 
 delivery, 69-71. 
 
 FRAt'D. 
 
 detined, 446. 
 
 efi'ect of, 446. 
 
 defense of, generally available only between immediate parties, 206, 
 210, 446. 
 
 when a good defense against a lona fide holder, 220, 446. 
 
 when price paid by purchaser conveys notice of, 231, 232. • 
 
 material alteration fraudulently made, effect of, 440. 
 
 immaterial alteration fraudulently made, effect of, 442. 
 
 fraudulently procuring signature is not forgery, 420. 
 
 amount of recovery by bona fide holder when instrument has incep- 
 tion in, 217. 
 
 effect of, on surety's liability, 477. 
 
 FUNDS. 
 
 al)sence of. in drawee's hands as excuse for nonpresentment, etc., 387. 
 withdrawal of, by drawer, as excuse for nonpresentment, etc., 387. 
 receipt of, by maker or indorser, as excuse for nonpresentment, etc., 
 
 396. 
 check purports to be drawn on deposit of, 31. 
 
 FUTURES, 102. 
 
 GENERAL ISSUE. 
 
 statute of limitations cannot be given in evidence under, 414. 
 
 GENUINENESS. 
 
 warranty of, by indorsement, 175. 
 
 acceptance no admission of genuineness of terms in body of bill, 280. 
 
 GIVING TIME. 
 
 effect of, on surety's liability, 479, 480. 
 
 GRACE, DAYS OF. 
 
 origin and nature of, 326. 
 
 what instruments entitled to, 34, 327. 
 
 number of days allowed. 328. 
 
 presentment for payment when last day of grace falls on Sunday or 
 
 holiday. 330. 
 how dispensed with, 332. 
 whether paper deemed overdue when transferred on last day of grace, 
 
 244. 
 whether action can be instituted on last day of grace, 410. 
 by what law governed, 500. 
 
 GREGORIAN CALENDAR, 331. 
 
 GROSS NEGLIGENCE. See Negligence.
 
 [Rrfrrrnccs are to tvdfy 401 
 
 Vaiuijraiihs marked §.] i>ut.x. tyji. 
 
 GUARANTOR. 
 
 contract of, 19G. 
 
 difference between liability of, and of indorser and surety, 195, 196. 
 
 GUARANTY. 
 
 diirprence between, and suretj'ship, 195. 
 difTeronce between, and indorsement, 196. 
 
 GUARDIANS. 
 
 as parties to negotiable instruments, 120. 
 
 HOLDER. Sec Bona Fide Hoideb. 
 
 HOLIDAY. 
 
 presentment for payment when instrument falls due on, 330. 
 
 HONOR. See Acceitance Supra Protest; Acceptor Supra Protest; 
 Payment Supra Protest. 
 
 HOUR. 
 
 at what hour of day presentment for payment should be made, 322, 
 323. 
 
 IDIOTS. See Insane Persons. 
 
 ILLEGAL CONSIDERATIONS, 
 examples of, 101-104. 
 by what law legality of consideration determined, 105, lOG. 
 
 ILLNESS. 
 
 of holder, as excuse for nonprcsentment, etc., 395. 
 
 IMBECILES. See Insane Persons. 
 
 IMMATERIAL ALTERATION. -See Alteration. 
 illustrations of, 437. 
 effect of, 437, 442. 
 
 IMMEDIATE P.\RTIES. 
 who are, 110. 
 defenses admissible between, 110, 113, 445-447, 473. 
 
 IMPLIED ACCEPTANCE. 
 
 what will amount to, 299. 
 
 IMPLIED AUTHORITY, 
 of agents, 124, 125. 
 of one partner to bind firm, 134-137. 
 of corporations, 143, 144. 
 
 IMPLIED NOTICE. See Notice. 
 
 INCAPACITY'. See Alien Enemies: Drunken Persons; Infants; 
 Insane Pkhsons: Married Women. 
 defense of, 444. 
 defense of, good against 60/10 fide holder, 219, 444. 
 
 INDEMNITY. 
 
 receipt of, bv maker or indorser as excuse for nonpresentraent. etc., 
 390. 
 
 26
 
 ino Txn-.TrY [References arc to 
 
 ■*^- iisDh^x. iHirayntphs marked §.) 
 
 INDORSEMENT. See also Indouser. 
 
 when negotiable instiiiments transferable by, 168. 
 
 of instrmnent payable to bearer or indorsed in blank, efTect of, 108. 
 
 transfer not completed without delivery, 1G9. 
 
 meaning of term, 170. 
 
 is a separate and independent contract, 171. 
 
 liabilities created by, 172-178. 
 
 liabilities created by indorsement without recourse, 173. 
 
 Avarrantics by, 172-178. 
 
 place of, 179. 
 
 may be on separate paper, 180. 
 
 allon£;e, 180. 
 
 indorsement in full_. 182. 
 
 indorsement in blank, 183. 
 
 absolute and conditional indorsements, 184. 
 
 restrictive indorsements, 185. 
 
 indorsements without recourse, 186. 
 
 joint indorsements, 187. 
 
 successive indorsements, 188. 
 
 irregular indorsements, 189-194. 
 
 difference between guaranty and, 196. 
 
 who may sue on instrument indorsed in blank, 398, 403. 
 
 rights of holder under blank indorsement, 404. 
 
 who can sue on instrument indorsed in full, 405. 
 
 filling lip blank indorsement, 404. 
 
 where indorsement s])ecial to particular person, none but such per- 
 
 .son or his representative can sue, 398. 
 infant may transfer title by, 153. 
 right to strike out indorsements, 404 
 
 INDORSEMENT IN BLANK, 
 defined, 183. 
 effect of, 183. 
 
 INDORSEMENT IN FULL. 
 
 defined, 182. 
 effect of, 182, 183. 
 
 INDORSEMENT WITHOUT RECOURSE, 
 effect of, 180. 
 liabilities created by, 173. 
 
 INDORSER. 
 
 contract of, 172-178, 196, 311. 
 
 warranties by, 172-178, 424. 
 
 joint and successive indorsers, 187, 188. 
 
 irregular indorsers, 189-194. 
 
 difference between liability of, and guarantor, 196. 
 
 when suit can be begun against, 412, 413. 
 
 action against, for nf)nacceptance, 413. 
 
 acceptance no admission of signature of, 278, 425. 
 
 is surety of acceptor or maker, 475. 
 
 new promise or part payment by, effect on statute of limitations, 
 
 482. 
 by what law liability of, governed, 492. 
 
 INDORSER WITHOUT RECOURSE, 
 liability assumed by, 173. 
 
 liability of, contrasted with liability of regular indorser, 173. 
 warranties by, 173.
 
 UMerences are to index. 403 
 
 parayruiJiis tnarkcd gj 
 
 INFANTS. 
 
 who arc, loO. 
 
 contracts of, f,'enerally voidable, 150. 
 
 may bind themselves for necessaries, 151. 
 
 liable for torts, 151. 
 
 cannot bind themselves on negotiable instrument, 152. 
 
 may be payee, ISIJ. 
 
 may transfer by indorsement, 1 ."):!, 154. 
 
 ratification by adult of nej,'otiable instrument executed when an 
 
 infant, 155, 156. 
 what will amount to ratification, 155, 15G. 
 may act as agents, 121. 
 
 where drawee is, bill may be treated as dishonored, 281. 
 defense of infancy good against bona fide holder, 219, 444. 
 
 INITIALS. 
 
 sullicient as signature, 58. 
 
 INLAND BILLS OF EXCHANGE. See Bills of Exchange. 
 
 INSANE PERSONS. 
 
 sanity i)resumed, 157. 
 
 insaiiity must be specially ))lpa<led, 157. 
 
 negotiable contracts of. void, 157. 
 
 what degree of incapacity sutlices to render contract void, 158. 
 
 ignorance of incapacity, eflect of, 159. 
 
 contracts of, for necessaries, valid, ItiO. 
 
 ratification after recovery, l(i2. 
 
 where drawee insane, bill may be treated as dishonored, 281. 
 
 insanity revokes agency, 1:^0. 
 
 insanity good defense against iona fide holder, 219, 444. 
 
 INSANITY. Sec Insane Persons. 
 
 INSOLVENCY LAWS. See Bankruptcy and Insolvency Laws. 
 
 INSTALMENTS. 
 
 instruments payable in, when deemed overdue, 243. 
 presentment for payment when instrument ])ayable in, 321. 
 maker entitled to grace on each instalment, 327. 
 action lies for each instalment as it falls due, 413. 
 
 INTENT. 
 
 to defraud, essential to constitute forgery, 421. 
 
 INTERDICTION OF COiLMERCE. 
 
 as excuse for nonpresentment, etc., 384. 
 
 INTEREST. . 
 
 whether paper deemed overdue when instalment of, remains unpaid, 
 
 243. 
 note payable on demand with, is continuing security, 324. 
 whether separate action may 1m^ maintained for, 401. 
 may be recovered without barring action for principal, 401. 
 change in rate of, constitutes material alteration, 431. 
 
 INTERPRETATION, 
 meaning of, 48(5. 
 governed by lex loei contractus, 480. 
 
 INTOXICATION. See Drunken Persons.
 
 404 TNDFX [References are to 
 
 *"* UNUJiA. paragraphs marked §.1 
 
 IRREGULAR IJsT)ORSEMENTS. 
 
 examples of, 189-1!)!. 
 
 liability of one not payee writing his name on paper before delivery 
 to payee, 191. 
 
 conflict of decisions as to, 192. 
 
 parol evidence of intention admissible between immediate parties, 
 193. 
 
 whether parol evidence of intention admissible between remote par- 
 ties, 194. 
 
 JOINT DRAWEES. 
 
 if not partners, all must accept, 284. 
 
 if drawn on firm, may be accepted by one partner in firm name, 284. 
 
 JOINT PARTIES, 
 suits by, 399. 
 
 new promise by one, effect of, on statute of limitations, 481. 
 several paj-ees not partners must indorse jointly, 187. 
 acceptance by, 284. 
 
 effect of indorsement by one of several payees, 187. 
 presentment for payment to, 319. 
 notice of dishonor to, 369. 
 
 JUDICIAI- NOTICE. 
 
 of seal of notary public, 348. 
 
 of days of grace allowed by law merchant, 328. 
 
 when taken of bankinj? hours, 322. 
 
 courts will not take, of laws of another State or country, 484, 499. 
 
 JUDICIAL SALE. 
 
 purchase at, not in usual course of business, 238. 
 
 JULIAN CALENDAR, 331. 
 
 JURY. 
 
 what are business hours is question for, 322. 
 
 LACHES. 
 
 in presentment for acceptance, effect of, 28, 39, 268. 
 
 LADING, BILLS OF. See Bills of Lading. 
 
 LAW MERCHANT. 
 
 principles of, when applied by Federal courts, 8, 499, 
 
 LEGAL HOLIDAYS. 
 
 presentment for payment when instrument falls due on, 330. 
 
 LEGAL TENDER. 
 
 instrument must be payable in, 87, 88. 
 what constitutes a, 404. 
 
 LEGAL TITLE. 
 
 must be vested in plaintiff to entitle him to sue in own name, 448. 
 
 LEX DOMICILI^E. See Conflict of Laws. 
 
 LEX FORI. See Conflict of Laws. 
 
 LEX LOCI CONTRACTUS. See Conflict of Laws.
 
 [References are to index -iOS 
 
 parayraphs marked §.] 
 
 LEX LOCI REI SIT.E. See Conflict of Laws, 
 LKX LOCI SOLUTIONIS. See Conflict of Laws. 
 LIMITATION OF ACTIONS. See Statute of Limitations. 
 LIMITATIONS, STATUTE OF. See Statute of Limitations. 
 LUNATICS. See Insane Persons. 
 
 MAIL. 
 
 presentment for payment by, 340. 
 
 customary demand by bank.s by notice tliroxiph, 34.3, 344. 
 
 when notice of dishonor may be given by, 373, 375-377. 
 
 MAKER. 
 
 obligation of, 311. 
 
 presentment for payment not necessarj' to bind, 311. 320. 
 not entitled to notice of dishonor, 358, 307. 
 death of, presentment for payment in case of, 318. 
 estopped to deny capacity of pavee, 133. lt!<i. 
 
 warrants genuineness of signatures on paper when i)Ut in circula- 
 tion, 424. 
 by what law liability of, governed, 492. 
 
 MAI^ FIDKS. 
 
 negligence as evidence of, 228, 229. 
 
 MARK. 
 
 as a signature, 58. 
 
 MARRIAGE. 
 
 of feme sole, presentment for payment in case of, 315. 
 
 MARRIED WOMAN'S ACTS, 
 reference to, 1G7, 400. 
 
 MARRIED WOMEN. 
 
 incapacity of, to contract at common law, 1G5. 
 
 as payee and indorser, ItJG. 
 
 exceptions to rule of incapacity to contract, 107. _ 
 
 statutory changes as to contractual powers of, 107, 400. 
 
 may act as agent, 121. 
 
 presentment for payment in case of marriage of feme sole, 315. 
 
 husband must join in suit on bill or note given to feme sole who 
 
 afterward marries, 400. 
 on death of husband, right of action survives to wife, 400. 
 on deatii of wife, riglit of action goes to her personal representative, 
 
 400. 
 where bill or note given to married woman, husband may join wife 
 
 or sue alone, 400. 
 wife cannot sue husband. 400. 
 
 coverture, defense of, good against bona fide holder. 219. 444. 
 suits on negotiable instrtunonts held by, 400. 
 Avhere drawee is a, bill may be treated as dishonored. 281. 
 
 MATLTRITY. See Overdue Paper. 
 
 MEDIUM OF PAYMENT, 80-89, 457.
 
 [References are io 
 40G INDEX. paragraphs marked §.1 
 
 l^nLITARY DISTURBANCES. 
 
 as excuse for nonpresentment, etc., 384. 
 
 MINORS. See Infants. 
 
 MISDESCRIPTION. 
 
 in notice of dishonor, 362. 
 
 MISREPRESENTATION. See also Ebaud. 
 
 where instrument executed under, rights of bona fide holder, 210, 
 
 220. 
 effect of, on surety's liability, 477. 
 
 MISTAKE. 
 
 where instrument executed under, rights of bona fide holder, 210. 
 of fact and law, payments made under, 452. 
 
 MONEY. 
 
 negotiable instrument must be payable in, 86-89. 
 payment must be made in. 457. 
 nothing but money constitutes lawful tender, 464. 
 recovery of, when paid on forged instrument, 424-426. 
 
 :month. 
 
 what constitutes, at common law and under law merchant, 329. 
 computation of months, 329. 
 
 MORTGAGE. 
 
 lex rei sitce governs instrument secured by, on real estate, 491. 
 
 MUNICIPAL BONDS. 
 
 can only be issued for public purpose, 22. 
 what are public purposes, 23. 
 
 MUNICIPAL CORPORATIONS. 
 
 definition and examples of, 142. 
 
 power of, to execute negotiable instruments, 147. 
 
 power of, to issue bonds, 22, 23. 
 
 NECESSARIES. 
 
 contracts of infants, insane persons, and married women for, 151, 
 
 160, 167. 
 
 NEGLIGENCE. 
 
 effect of. on bona fides, 228, 229. 
 line of demarcation between, and notice, 232. 
 
 leaving room for alteration, by negligent execution, renders party 
 liable to bona fide holder, 439. 
 
 NEGOTIABILITY, 
 meaning of, 1. 
 words of, 03. 
 addition or change in words of, is material alteration, 430. 
 
 NEGOTIABLE INSTRUMENTS. Hec Bills of Exchange; Promis- 
 sory NOTES; Coupon Bonds; Municipal Bonds; Bank Bills or 
 Notes; Certiiticates of Deposit; Checks; Bills of Credit; 
 Certificates of Stock ; Bills of Lading ; Warehouse Receipts. 
 
 peculiarities ofj 1. 
 
 words of negotiability, 63.
 
 [Rrfcirtwcs are to . , . , _ 
 
 puiuijruijhis marked §.] INDEX. 4U» 
 
 NEGOTIABLE INSTRUMENTS — contitiued. 
 dilFerfiit kinds of, 15-55. 
 
 hills of I'xcliaiitfi', 15, 17. 
 
 promissory T\otcs, 1(1, 17. 
 
 oovij)on Worlds, 18-21. 
 
 nuinici[)iil bonds, 22, 23. 
 
 bank notes, 24, 25. 
 
 certilicatfs of deposit, 20, 27. 
 
 cheeks, 28-41. 
 
 hills of credit: 42, 43. 
 quasi-nejrotiahle instruments, 44-55. 
 
 certificates of stock, 45-4JI. 
 
 bills of ladinf,', 50-52. 
 
 Marelioiise or dock receipts, 53-55. 
 essential ri'ipiisites of — 
 
 must be open — i. e., unsealed, 73, 74. 
 
 enpapement to pay must be certain. 75, 70. 
 
 fact of payment must he certain. 77-81. 
 
 amount to l)e i)aid nnist he certain, K2-S5. 
 
 niediiun of ])ayment must be money, 80-89. 
 formal requisites of — 
 
 no particular form required, 57. 
 
 signature, 58. 
 
 material on vhich \\ritlen, 58. 
 
 whole instrument nmst be in writing, 59. 
 
 date. 02. 
 
 words of negotiability, 03. 
 
 stamps, 07, 08. 
 
 delivery, 09-71. 
 parol evidence generally inadmissible to vary, GO. 
 when parol evidence admissible, 01. 02. 
 contemporaneous written agreements, when admissible, 01. 
 
 NEW fro:mise. 
 
 by joint maker, surety, indorser, etc., efTect of, on bar of statute 
 of limitations, 481, 482. 
 
 NONACCEPTANCE. 
 
 action upon dishonor for, 413. 
 
 NOTARY PUBLIC. See also Protest. 
 
 may make presentment for payment, 312. 
 
 generally protest should be made by, 348. 
 
 seal of. courts take judicial notice of. 348. 
 
 seal of, prima facie proof of authenticity of certificate of protest, 
 348. 
 
 must have personal knowledge of presentment and demand of pay- 
 ment in order to make certificate of protest, 350. 
 
 not part of oilicial duty to give notice of dishonor, 300. 
 
 NOTICE. 
 
 bona fidr holder must acquire instrument witliout. 245-2.'>5. 
 
 but one taking with notice from bona fide holder acquires title of his 
 
 transferrer, 201. 
 of dishonor by nonacceptance or nonpayment, 245. 
 of fraud, defect of title, illegality of consideration, etc., 240. 
 time of acquiring, 247. 
 of accommodation character of paper, 200, 248.
 
 [References are to 
 40» lNDi.x. paragraphs marked §.] 
 
 NOTICE — continued. 
 
 of diversion of accommodation paper, 248. 
 
 express, 250. 
 
 constructive, 251, 252, 254. 
 
 of particular fraud, illegality, etc., not necessary, 253. 
 
 when price paid by purchaser conveys notice of fraud, 231, 232. 
 
 line of demarcation between negligence and, 232. 
 
 notice to agent, 255. 
 
 of dissolution of partnership, when necessary, 140. 
 
 NOTICE OF DISHONOR. 
 
 necessity of, to parties secondarily liable, 358. 
 
 primarj' debtor not entitled to, 358. 
 
 applies onlv to negotiable instruments, 358. 
 
 effect of failure to give, 311, 358, 350. 
 
 may be verbal or written, 360. 
 
 knowledge of dishonor does not constitute, 360. 
 
 form and contents of, 361-364. 
 
 by whom given, 365, 366. 
 
 when notice by one inures to benefit of another, 365. 
 
 notice by agent, 366. 
 
 when holder dead, 366. 
 
 to whom should be given, 367-371. 
 
 drawer and indorsers entitled to, but maker and acceptor not, 358, 
 
 367. 
 notice to agent, 368. 372. 
 notice to partners and joint indorsers, 369. 
 notice to indorsers for collection and to accommodation and fixed 
 
 indor.sers, 370. 
 notice when drawer or indorser is dead or bankrupt, 371. 
 how served — 
 
 when parties in same place, 372. 
 
 what is meant by same place, 373. 
 
 exceptions to rule that service must be personal where parties 
 
 live in same place, 374. 
 when parties reside in different places, 375-377. 
 drawer or indorser may direct to what place notice shall be 
 
 sent, 376. 
 where party lives in one place and has place of business in an- 
 other, 376. 
 where party resides temporarily in certain place, 376. 
 time within which given — 
 
 may be given immediately on dishonor, 378. 
 
 holder has until expiration of day following dishonor in which 
 
 to give, 378. 
 when parties reside in different places, notice must be sent by 
 first mail of day succeeding dishonor, unless unreasonably 
 early, 379. 
 each holder has a day within which to give, to his predecessor, 
 
 380. 
 transmission of notice over seas, 381. 
 excuses for failure to give. See Excuses fob Nonpresent- 
 
 MENT, rROTp:ST, AND NoTICE. 
 
 what law governs, 500. 
 NOTING DISHONOR, 351. 
 
 NOVATION. 
 
 effect of, 471.
 
 [RrforucrH arc to index. 409 
 
 paruyruijhfs marked §.] 
 
 OBLIGATION. 
 
 of loiitract dot t-r mined by hx loci contractus, 486. 
 
 meaning of, 487. 
 
 OCCUPATION OF COUNTRY BY ENEMY, 
 as excuse for nonpresentraent, etc., 384. 
 
 OVEUDUE PAPER. 
 
 transferee of, takes subject to what equities, 201-20.5, 474. 
 
 when instruments payable on sij,'ht or demand deemed overdue, 240. 
 
 acconiinodation pajjer aoqiiired overdue, 205, 242. 
 
 rule where instalment of principal or interest overdue, 243. 
 
 whether deemed overdue when transferred on last day of grace, 244. 
 
 OVERWHELMING CALAMITY. 
 
 as e.vcuse for nonpresentment, etc., 385. 
 
 PAROL EVIDENCE. Sec also Eviuence. 
 
 generally inadmissible to vary or contradict written instrument, 00. 
 when admissible, 9, 01. 62. , . , 
 
 admissibility of, to show intention in cases of irregular indorsement, 
 
 193 194. " 
 when admissible to supply omissions in certificate of protest, 357. 
 
 PARTICULAR FUND. 
 
 instrument not negotiable when payable out of, 81. 
 
 PARTIES TO NEGOTIABLE INSTRUMENTS, 
 executors and administrators, 117-119. 
 guardians, 120. 
 trustees, 120. 
 agents, 121-133. 
 partners. 134-141. 
 corporations, lt2-149. 
 infants, 150-1.56. 
 
 lunatics, imbeciles, and drunkards, 157-162. 
 alien enemies, 163, 164. 
 married women, 16.5-167. 
 immoiiiate .nnd remote, who are, 110, 111. 
 defenses admi.ssible between immediate parties, 110, 113, 445-44,, 
 
 473. 
 warranty of capacity of, 153. 160, 1 , ,. 2,5. 276. 
 parties to bills and notes, 50. 
 change in personality, number, or relation of, constitutes material 
 
 alteration, 433. 
 
 PARTNERS. 
 
 general authority of one jjartner to bind firm. 134, 135. 
 
 trading partnerships, negotiable instruments executed by one part- 
 ner bind firm, 136. 
 
 one member of nontrading partnership_ cannot execute negotiable 
 instrument without consent of all. 137^ 
 
 examples of nontrading ])artnerships. 137. 
 
 accommodation paper executed by one partner not binding on firm. 
 
 138. 
 where one partner signs firm name as surety, firm not bound. I.'IS. 
 firm not liable on jiaper issued in firm name for private debt of one 
 
 partner, 139.
 
 410 TNDFX [Referetices are to 
 
 ^^"^^- panujraphs marked §.] 
 
 PARTNERS — continued. 
 
 dissolution of partnership, how caused, and eflfect of, 140, 141. 
 
 when notice of dissolution necessary, 140. 
 
 presentment for acceptance to, 259. 
 
 acceptance by, 284. 
 
 presentment for payment by and to, 315, 319. 
 
 notice of dishonor to, 309. 
 
 payment by, approjjriation of, 460. 
 
 satisfaction by one discharges all, 467. 
 
 suits by, 399. 
 
 PARTNERSHIP. See Partners. 
 
 PART PAYMENT. 
 
 ordinarily only payment 2^ro tanto, 468. 
 when operates as satisfaction, 408. 
 by drawee does not amoiuit to acceptance, 298. 
 after maturity, as waiver of nonpresentment and notice, 389. 
 by joint maker, indorser, etc., etlect of, on statute of limitations, 
 481, 482. 
 
 PAYEE. 
 
 capacity of, to indorse admitted by acceptance, 153, 106, 276. 
 signature of, acceptance no admission of, 278, 475. 
 infants and married women as, 153, 166. 
 
 PAYTVIENT. 
 
 defined, 449. 
 
 distinguished from sale, 449. 
 
 fact of, must be certain, 77-81. 
 
 time of, need not be definitely ascertained, if sure to come, 78. 
 
 who may make, 450. 
 
 payor should see that holder's title is genuine, 451. 
 
 payments under forged indorsement and under mistake of fact and 
 
 law, 451, 452. 
 payor should demand surrender of instrument, and take receipt, 453. 
 to whom ])ayment may be made, 454. 
 when payment mav be made, 455, 456. 
 medium of, 86-89," 449. 457. 
 by check, note, etc., 457. 
 
 acceptance of depreciated currency by creditor absolute, 458. 
 appropriation of payments, 459, 460. 
 payments by partners and joint debtors, 460. 
 change in time, nlace, or medium of, is material alteration, 429, 
 
 430, 432. 
 part payment. See Part Payment. 
 payment supra protest. See Payment Supra Protest. 
 
 PAYMENT SUPRA PROTEST, 
 when may be made, 461. 
 effect of, 461. 
 
 applies only to bills of exchange, 461. 
 pavor subrogated to rights of party for whose honor payment made, 
 
 461, 462. 
 mode of making, 463. 
 payor should notify party for whose honor payment made, 463. 
 
 PENCIL. 
 
 signature inj 58.
 
 [Rrfnrnces are to ^^.^^^ 4^1 
 
 paraijruphs marked §.] 
 
 PERFOR>L\XCE. 
 
 law of place of, governs when. 400. 
 
 PERSONAL DEFENSES, 
 dclined. 'lib. 
 admissible between whom, 225. 
 
 PERSONAL REPRESENTATIVES. See Executors and Admixistra- 
 
 TOKS. 
 
 PLAINTIFFS. 
 
 to actions on negotiable instruments, 398-40G. 
 
 wlio are proper parties plaiiilirF dotcnnincd h\ lex fori, 494. 
 
 must have legal title in order to sue in own name, 448. 
 
 PLEADING. 
 
 plea of tender, profert of money must accompany, 404. 
 Btatute of limitations must be specially pleaded. 414. 
 
 PLEDGE. 
 
 of negotiable instruments, 234-23G. 
 
 POLITICAL DISTURBANCES. 
 
 as excuse for nonpresentment, etc., 385. 
 
 POSSESSION. 
 
 presumi)tions from, 259. 
 
 when sullicieut evidence of right to present for payment, 312-314. 
 
 prima facie evidence of ownership. 403, 400. 
 
 not always necessary in order to institute suit, 406. 
 
 POST-OFFICE. See Mail. 
 
 PRE-EXISTING DEBTS. 
 
 as a consideration for negotiable instruments, 100, 234, 235. 
 
 PRESENTMENT. 
 
 excuses for want of. See Excuses for Nonpresentment, Protest, 
 AND Notice. 
 
 PRESENTMENT FOR ACCEPTANCE. 
 
 acceptance applies only to bills of exchange, 256. 
 
 what bills do and do not rciiuire presentment for acceptance. 257. 
 
 when drawer Ixniiul without presentment, 258. 
 
 by whom made, 259. 
 
 to whom made, 259-261. 
 
 where drawees joint, 259. 
 
 where drawees partners. 259. 
 
 presentment to agent of drawee, 260. 
 
 where drawee dead. 261. 
 place of. 262-264. 
 how made. 265. 266. 
 time of. 267-269. 
 
 duty of collecting hanks as to. 132. 
 what law governs, 500. 
 
 PRESENTM1<:XT FOR PAYMENT. 
 
 not necessary to bind acceptor or maker, 311, 320. 
 drawer and indorsers discharged unless duly made and notice of 
 dishonor given, 311, 320.
 
 . ^ ^ [Rrfcrcnccs arc to 
 
 ^1^ INDEX. paragraphs marked §.] 
 
 PRESENTMENT FOR PA YIMENT — cowfinwed. 
 by whom made — 
 
 may be made by any hona fide holder or his agent, 312. 
 
 when mere possession sufficient evidence of right to present,, 
 312-314. 
 
 if holder is dead, representative must make, 315. 
 
 if holder is bankrupt, assignee must make, 315. 
 
 if partner die, survivor must make, 315. 
 
 if feme sole marry, husband must make, 315. 
 to whom made — 
 
 may be made to acceptor or maker or their agents, 316. 
 
 personal demand not necessary, 316. 
 
 sufficient if made to any person found on premises, 316, 317. 
 
 where no one to answer, presentment at dwelling sufficient, 317. 
 
 when maker or acceptor dead, should be presented to personal 
 representative, 318. 
 
 if no representative, should be made at dwelling of deceased, 
 or at place where payable, 318. 
 
 where several promisors not partners, should be made to each, 
 319. 
 
 presentment to one partner sufficient, even after dissolution, 
 319. 
 
 on death of copromisor or partner, should be made to sur- 
 vivor, 319. 
 time of — 
 
 should be on day of maturity, 320. 
 
 if before maturity, nugatory, 320. 
 
 if after maturity, without effect, unless excused, 320. 
 
 when payable on demand, 321, 324, 325. 
 
 when pavable in instalments, 321. 
 
 at what "hour of day, 322, 323. 
 
 when entitled to grace, 320-328, 332. 
 
 when day of maturity falls on Sunday or holiday, 330. 
 
 computation of time, 329-331. 
 mode of — 
 
 instrument should be actually exhibited, 339. 
 
 presentment by mail, 340. 
 
 leaving instrument in debtor's hands, .341. 
 
 when payable at bank, 342. 
 
 customary demand by notice through the mails, 343, 344. 
 place of — 
 
 when payable generally. 333. 
 
 when place of payment specified, 333. 
 
 when at place of business and when at residence. 334, 335. 
 
 when presentment made in person, place unimportant, 336. 
 
 whether due diligence to find maker at place where instrument 
 dated is sufficient, 337. 
 
 when payable at either of several places, 338. 
 by holder of check, laches in, 28, 39. 
 of checks, time of, 39. 
 duty of collecting banks as to, 132. 
 what law governs, 500. 
 
 PRESUMPTIONS. 
 
 as to consideration, 1, 90, 91. 445. 
 
 as to legality of consideration, 446. 
 
 as to fact and place of delivery, 70, 488.
 
 llfrfdrucfs arc i<, tvi i \ ATI 
 
 puia<jrui>h.f marked §.J i-Mn-A. ^iO 
 
 PRESUMTTIOXS — continued. 
 as to sanity, 157. 
 
 that one producing inHtrument is bona fide holdpr, 199. 
 that instniMR-iit acquired before maturity, 241. 
 arisinf^ from possession, l!t!l, 259. 
 as to date of acceptance, 288. 
 in favor of protest, 357. 
 
 when domicile of maker or acceptor presumed to 1)p place of execu- 
 tion, 489. 
 as to foreign laws and as to law merchant, 499. 
 
 PRINXIPAL. See also Agent. 
 
 undisclosed, not liable on negotiable instrument, 127. 
 ratification by, of acts of agent, 129. 
 
 whether can sue on instrument given to "A. B., agent for C. D.," 402. 
 change in amount of, constitutes material alteration, 431. 
 
 PRINCIPAL AND SURETY. See Surety. 
 
 PRIVY PARTIES, 
 who are, 110. 
 defenses admissible between, 110, 113, 444-447, 473. 
 
 PROCURATION. 
 
 authority by, 123. 
 
 PROFERT. 
 
 of money must accompany plea of tender, 464. 
 
 PROMISE. 
 
 to pay, as waiver of nonpresentment, etc., 389. 
 
 PROMISES TO ACCEPT, 303-305. 
 
 PROMISSORY NOTES. See also Negotiable Instruments. 
 defined, 16. 
 
 origin and history of, 2, 4. 
 whetlier negotiable at common law, 4. 
 
 declared negotiable by statute 3 and 4 Anne, chap. 9, 4. 
 parties to, 16, 56. 
 
 difTerence between, and bills of exchange. 17. 
 certainty of promise in, 76. 
 protest of. under statute, 347. 
 foreign, whether protest essential on dishonor of, 347. 
 
 PROOF, BURDEN OF. See Burden of Proof. 
 
 PROTEST. 
 
 meaning of, 345. 
 
 must be made for nonacceptance and nonpa^Tnent. 340. 
 
 what instruments must or may be protested. 0. 347. 
 
 certificate of, exclusive evidence of dishonor of foreign bills, 347. 
 
 by whom made, 348. 
 
 how authenticated, 348. 
 
 place of. .349. 
 
 notary nuist have personal knowledge of presentment and demand of 
 
 payment , 350. 
 time within which certificate of, must be prepared. 351. 
 skeleton or initial protest, 351.
 
 , . , [References are to 
 
 "^^^ INDEX. paragraphs marked §.] 
 
 PROTEST — continued. 
 
 what certiticate of, must contain. 352-354. 
 certificate of, as evidence, 355-357. 
 what h\w governs, 500. 
 
 excuses for want of. IScc Excuses for Nonpresentment, Protest, 
 AND Notice. 
 
 PUBLIC ENEMY. 
 
 occupation of country by, as excuse for nonpresentment, etc., 384. 
 
 PUBLIC POLICY. 
 
 examples of considerations opposed to, 103. 
 
 PUBLIC PURPOSE. 
 
 municipal bonds can only be issued for, 22. 
 what are public purposes, 23. 
 
 PURCHASER, BONA FIDE. See Bona Fide Holder. 
 
 QUALIFIED ACCEPTANCE, 262, 309. 
 
 QUASI-NEGOTIABLE INSTRUMENTS. 
 
 possess some but not all qualities of negotiable instruments, 44. 
 different kinds of, 44-55. 
 
 certificates of stock, 4.5-49. 
 
 bills of lading, 50-52. 
 
 warehouse or dock receipts, 53-55. 
 
 RATIFICATION. 
 
 by principal of unauthorized acts of agent, 129. 
 of contracts made while an infant, 155, 156. 
 of contracts made while insane or drunk^ 162. 
 of forged signature, 422. 
 
 REAL DEFENSES, 
 defined, 225. 
 admissible against iona fide holder, 225. 
 
 REAL ESTATE. 
 
 goAcrned by law of place where situated, 491. 
 
 REASONABLE TIME. 
 
 instruments payable on sight or demand must be presented in, 268. 
 what is, 269. 
 
 RECEIPT. 
 
 payor should take, 453. 
 
 RECEIVERS. 
 
 do not acquire instruments in usual course of business, 238. 
 
 RECOURSE, INDORSEMENT WITHOUT. See Indorsement With- 
 out Recourse. 
 
 RECOURSE, INDORSER WITHOUT. See Indorser Without Re- 
 course. 
 
 RECOVERY. 
 
 of money paid on fnrgpd instrument, 278, 280. 424-426. 
 amount of, when less than full value paid, 216, 217.
 
 [Refcrniccs arc lo txdex. 415 
 
 paniijraphs marked §.] 
 
 RELHASK. 
 
 elFect of, 4Uy. 
 
 RKMEDY. 
 
 governed by lex fori, 4R4, 493. 
 
 REMOTE PARTIES, 
 who are. 111. 
 
 REMOVAL. 
 
 of maker or acceptor, as excuse for nonprescntment, etc., 397. 
 
 RENEWAL NOTES, 114, 115. 
 
 RESIDENCE. 
 
 pri'sentnicnt for acceptance at, 204. 
 
 prosentnient for ])ayiiient at, :n(i, 32.3, 334, 33"). 
 
 pn'seiitnieiit niav be iimdc to imtsoii found at, 317. 
 
 presentment at," sullicifiit when inak.T or acceptor dead, and no 
 
 personal representative appointed, 318. 
 notice of dishonor to, 372, 37U, 378. 
 
 RESTRICTIVE INDORSEMENT, 
 defined, 185. 
 examples of, IS.'), 
 rights of indorsee under, 185. 
 
 REVOCATION. 
 
 of agency, 130. 
 
 SALE. 
 
 payment distinguished from, 449. 
 
 SANITY. 
 
 presumption of, 157. 
 
 SATISFACTION. See Accord and Satisfaction ; Payment. 
 
 SEAL. 
 
 effect of. on negotiability, 21, 73, <4. 
 
 what is sealed instrument, 73. 
 
 imports a consideration, 90. 
 
 doctrine that corporations can only bind themselves by contracts 
 
 under, obsolete, 21. 
 adding or detacliing, constitutes material alteration, 434. 
 
 SECURITY. See Collateral Security. 
 
 SERVICES. 
 
 as a consideration, 99. 
 
 SET-OFF. 
 
 defined. 472. 
 
 unknown at common law, 472. 
 
 to what actions applicable. 472. 
 
 may be pleaded only between immediate partie9.^473. 
 
 not an equity attaching to overdue paper, 204, 474. 
 
 governed by lex fori, 498. 
 
 SETS. 
 
 of foreign bills of exchange, 64-66.
 
 [References are to 
 *1" INDEX. paragraphs marked §.] 
 
 SICKNESS. 
 
 as excuse for nonpresentment, etc., 269, 385, 395. 
 
 SIGHT. 
 
 when instruments payable on, deemed overdue, 240. 
 bills payable at, do not require presentment for acceptance, 257. 
 time of presentment for payment where bill payable at or after, 268. 
 " on demand at sij^ht " equivalent to " at sight," 321, 327. 
 whether instruments payable at, entitled to grace, 327. 
 meaning of " after sight." 327. 
 
 when statute of limitations begins to run on instrument payable 
 at, 415. 
 
 SIGNATURE, 
 place of J 58. 
 how made, 58. 
 what will suffice for, 58. 
 by agents, 126. 
 
 of drawer admitted by acceptance, 273, 424. 
 of payee or indorser, acceptance no admission of, 278, 425. 
 
 SPECIAL INDORSEE. 
 
 where indorsement special, none but indorsee or his representative 
 can sue, 398. 
 
 STALE CHECKS. 
 status of, 39. 
 
 STAMPS. 
 
 upon negotiable instruments, 67, 68. 
 
 STATES. 
 
 of Union, foreign to each other, 7, 483. 
 
 prohibited from emitting bills of credit, 42. 
 
 power of, to enact bankruptcy and insolvency laws, 465. 
 
 STATUTE OF LIMITATIONS, 
 origin of, 414. 
 
 does not destroy debt, but merely bars remedy, 414. 
 must be specially pleaded, 414. 
 governed bj' lex fori, 414, 495. 
 begins to run when, 28, 415. 
 
 new promise or part payment by joint maker, joint and several 
 maker, indor.ser or surety, effect of, 481, 482. 
 
 STOLEN INSTRUMENTS. 
 
 rights of bona fide holder where undelivered instruments stolen and 
 
 put in circulation, 207, 208, 223. 
 thief may transfer good title to negotiable instrument when payable 
 
 to bearer, 1. 
 
 STOPPAGE IN TRANSITU. 
 
 effect of transfer of bill of lading on, 51. 
 
 STRANGER. 
 
 acceptance by, 282. 
 
 SUBROGATION. 
 
 of payor supra protest to rights of party for whose honor he pays, 
 46L 462.
 
 [References are to ^^^^ 4I7 
 
 paraijruphs marked §.] 
 
 SUBSTITUTION. 
 
 of another obligation, effect of, 471. 
 
 SUITS. iSee Actions. 
 
 SUNDAY. 
 
 presentment for payment when instrument falls due on, 330. 
 
 SUPRA FllOTEST. Hee Acceptance Supra Pbotest; Acceptor Supba. 
 Protest; Payment Supra Protest. 
 
 SURETY. 
 
 contract of, 105. 
 
 difference between liability of, and of guarantor, 19,5. 
 
 not entitled to notice of dishonor, 307. 
 
 drawer (after acceptance) and indorsers are sureties to acceptor or 
 
 maker, 475. 
 not cosureties, and not entitled to contribution, 475. 
 each prior party is a principal as between himself and each sub- 
 sequent party, 475. 
 what will discliarge — 
 
 whatever discharges principal debtor will discharge surety, 47C. 
 misrepresentation, duress, diversion, alteration, tender, etc., 
 
 477. 
 parting with .security, etc., 478. 
 extension of time, 479, 480. 
 
 new promi.se or j)art payment by, effect of, on bar of statute of limi- 
 tations, 481, 482. 
 
 TELEORAPH. 
 
 acceptance by, 297. 
 
 TENDER. 
 
 what is a sufficient, 464. 
 
 etTect of, 464, 477. 
 
 plea of, must be made with profert of money, 464. 
 
 THIEF. 
 
 may tran.sfer good title to negotiable instrument when payable to 
 bearer, 1. 
 
 TIME. 
 
 computation of. 329-.331. 
 
 extension of. effect of, on surety's liability, 479, 480. 
 
 TITLE. 
 
 thief may transfer good, to negotiable instrument if payable to 
 
 bearer, 1. 
 legal, any holder with, may sue. 398. 
 legal, must be vested in plaintiff to entitle him to sue in own name, 
 
 448. 
 
 TRADING PARTNERSHIPS. 
 
 negotiable instrument executed by one partner binding on firm. 136. 
 
 TRANSFER. See Delivery ; Indorsement. 
 
 TRAVELING. 
 
 when party is. as excuse for nonpresentment, etc., 393. 
 
 TRUSTEES. 
 
 as parties to negotiable instruments, 120.
 
 i -, o [References are to 
 
 *-^° INDEX. parayraphs marked §.] 
 
 USAGE. 
 
 as to proper hour for presentment for acceptance, 267, 268. 
 of banks, as to days of grace, may alter law merchant, 328, 
 
 USUAL COURSE OF BUSINESS. See Business. 
 
 USURY, 104. 
 
 UTTERING. 
 
 meaning of, 421. 
 
 essential to constitute forgery, 421. 
 
 VALIDITY. 
 
 governed by lex loci contractus, 486. 
 
 VALUABLE CONSIDERATION. See Consideration. 
 
 VERBAL. 
 
 acceptances, 300. 
 notices of dishonor, 360. 
 
 VOID. 
 
 where instrument declared void by law, good defense against bona 
 
 fide holder, 221. 
 when instrument known by drawer or indorser to be, nonpresent- 
 
 ment, etc., excused, 391. 
 
 WAGERS, 102. 
 
 WAIVER. 
 
 of presentment, protest, and notice, 388, 389. 
 
 WAR. 
 
 eflFect of, on intercourse, 163. 
 
 does not revoke agency, 130. 
 
 as excuse for nonpresentment, etc., 384. 
 
 WAR BETWEEN THE STATES, 
 cases growing out of, 80. 
 citizens of United States and Confederate States alien enemies, 164. 
 
 WAREHOUSE RECEIPTS. 
 
 description and nature of, 53, 54. 
 difference between, and bills of lading, 53. 
 statutory enactments in regard to, 55. 
 
 WARRANTIES. 
 
 by indorsement, 172-178, 424. 
 by acceptance, 273-277, 424. 
 by acceptance for honor, 295. 
 
 WITHOUT RECOURSE. See Indorsement Without Recourse; In- 
 dorser Without Recourse. 
 
 WITNESS. 
 
 adding name of, is material alteration, when, 434. 
 
 [Whole Number of Pages 452.]
 
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