covered those intermediate terms, those minor propositions, which seemed wanting to connect the newly developed principles of commercial law with the ancient doctrines of the common law, and to adapt the accustomed forms to the great and important purposes of substantial justice, in mercantile transactions." The law merchant, after having been at first administered in special courts, next passed under the jurisdiction of the admiralty courts, and finally became merged in the general • "During the time of the Tudors this court claimed a wide jurisdiction. In fact it drew to itself practically all cases in any way dependent upon the principles of the law merchant. It comprised all mercantile and shipping cases. All contracts made abroad, foreign bills of exchange, charter parties, insurance, average, freight questions arising out of negligent navigation, breaches of warranty of seaworthiness, as well as torts committed on the sea and matters of salvage, were all litigated in the Admiralty Court. It was in fact during the sixteenth century the great organ through which the principles of the law merchant were declared. "But scarcely had the Admiralty Court attained to this position, when the commonlaw judges began to look with envious eyes at the wide and rich field which the development of commerce brought within the jurisdiction of the admiral. Accordingly, in the reign of Elizabeth, the common-law judges began war upon him. The most effective instrument was found to be the writ of prohibition, and this weapon was accordingly used with vital effect. Coke was raised to the bench in 1606 body of the common and took the lead in the contest. As was once said by Buller, Coke seemed to have not only a jealousy, but a positive enmity against the admiralty jurisdiction. "Notwithstanding the fact that the procedure of the Admiralty Court was vasty better adapted to the settlement of controversies over which that court had acquired jurisdiction, political events told heavily against it in the contest. The common - law judges were in closer touch with the revolutionary forces. The result of the Civil War and the establishment of the Commonwealth insured the victory of the common-law over its rival. The jurisdiction of the Admiralty Court was thereby reduced to a low ebb. Much of the lost ground has been recovered to this court by modern legislation. The point here to be noted is that the common-law judges under the leadership of Coke wrested from the admiralty general jurisdiction over commercial causes. The extent of the victory could not at the time be fully appreciated, for English commerce was destined to expand beyond the most sanguine expectations.' Street's Foundation of Legal Liability, Vol. II, p. 332-3 law, and administered in the regular common law courts of the country. SECTION 2. BILLS AND NOTES. Bills of exchange are undoubtedly of Italian origin, and were first used about the beginning of the thirteenth century. The use of these instruments was rapidly spread throughout all Western Europe by the Italian bankers and money-changers. Early bills of exchange contained no words of negotiability. All of the early specimens of these instruments which are extant are written in Italian, even when neither drawn nor payable in Italy. "The precise era of that most useful invention does not appear to have been exactly ascertained; but that it originated * * *in the usages and customs observed and in the regulations adopted at fairs, from considerations of general security and convenience, there is every reason to believe. And after it was once established upon a small scale, the utility and convenience of the invention behooved gradually to lead to its more extensive adoption, particularly in foreign and maritime com merce. Indeed, it seems proba- tended commerce carried on by the maritime cities of Italy, and of the south of France and Spain, under their comparatively free and well-administered governments. Weber in his Ricerche sull' Origine e sulla Natura del Contratto di Cambrio, published at Venice in 1810, states positively that such documents were in use at Venice in 1171; and a law of Venice of 1272 clearly designates bills of exchange. The unpublished statute of Avignon, of 1243, contains a paragraph entitled De Litteris Cambii. A statute of Marseilles, dated 1253, presents evident traces of them; and a transaction of this description is attested by a document of 1256, relative to England.' Reddie's Historical View of Laws of Maritime Commerce. CHAPTER II. NEGOTIABLE INSTRUMENTS. SECTION 3. BILLS OF EXCHANGE. A bill of exchange is an unconditional order in writing for the payment of a certain sum of money absolutely and at all events.1 Bills of exchange are either inland or foreign. An inland bill of exchange is one payable in the same state or country in which it is drawn. A foreign bill of exchange is one payable in some state or country other than that in which it is drawn. There are three original parties to a bill of exchange: the drawer (who draws the order, or in other words, orders the payment of the money), the payee (in whose favor the order is drawn), and the drawee (on whom the order is drawn). SECTION 4. THE ORDER. The most essential characteristic of a bill of exchange is the order to pay. No particular words are necessary, but there must be an absolute order to pay. There must be something more than the asking of a favor, or the conferring the authority to make payments if the drawee chooses to do so.* 1 Some other definitions are 88 follows: "An unconditional order from A to B directing B to pay Ca certain sum of money therein named." Byles on Bills. "An unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money tr or to the order of a specified person or to • Patterson vs. Poindexter, 6 W & Exch., 200. " SECTION 5. PROMISSORY NOTE. 5 A promissory note is an unconditional promise in writing for the payment of a certain sum of money absolutely and at all events. There are only two original parties to a promissory note, the maker (who makes the note and promises to pay the money) and the payee (in whose favor the note is made). SECTION 6. ESSENTIALS OF BILLS AND NOTES. Although bills and notes differ from each other in the nature of the contract created by each, the law governing each is in most of its essentials the same. The common essential characteristics of these two species of negotiable instruments will be considered in the following sections. SECTION 7. CERTAINTY OF TERMS. One of the most striking characteristics of the laws governing bills and notes is the necessity for certainty in the terms of the contracts. First of all American and Eng. Ency. of Law, Vol IV, p. 77. This is the definition of Chancellor Kent slightly modified. Other definitions are as follows:"An open promise in writing by one person to pay another person therein named, or to his order or to bearer, a specified sum of money absolutely and at all events." Daniels on Negotiable Instruments, Sec. 28: "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 certain sum in money to or to the order of a specified person or to bearer." Eng. Bills of Exchange Act, Sec. 83. "Bills and notes are governed by the same rules with respect to the certainty required in their terms and their general elements, but, at its inception, a note differs from a bill in the parties thereto. Only the rights of the maker and the payee are involved in a promissory note; when, however, the payee transfers the note to an indorsee the similarity of the note to an accepted bill is perfected; it is then an order from the payee upon the maker for the payment of money to the indorsee; the indorser (payee) is the drawer, the maker of the note is the acceptor, and the indorsee is the payee. Remembering this analogy, decisions with regard to bills may be applied mutatis mutandis to notes." Am. & Eng. Ency. of Law, Vol. IV, p. 79. there must be certainty of payment. The order or promise must be for the payment of a definite sum of money, absolutely and under all circumstances. Certainty as to time of payment is essential to a bill or note, and any contingency in this respect will render the instrument containing it non-negotiable." Exceptions to this last rule exist in conditions sanctioned by commercial usage as to demand, presentment, or sight, and contingencies when the payment depends on an event which is bound to ultimately happen." The amount of the payment to be made must be certain at the time the order or promise is given. It is sufficient if the amount to be paid at any given time can be ascertained from the face of the note,10 but it is not sufficient that the amount payable is capable of being rendered certain at some future time."1 SECTION 8. NECESSITY FOR PAYMENT IN MONEY. Except as modified by statutory provisions, bills of exchange and promissory notes must be for the payment of money only. "Instruments ordering or promising the payment of a certain amount in specific articles," or in bonds, notes or checks,13 or ordering or promising the delivery of certain goods or chattels," are not obligations for money, and consequently are not valid bills of exchange or promissory notes. But, by statute in many states, such instruments are given the qualities of negotiable instruments.16 ' Protection Ins. Co. vs. Bill, 31 American and English Ency. of 10 Smith vs. Crane, 33 Minn., 144; 11 Stillwell vs. Craig, 58 Mo., 24. |