16 "Mercantile paper may be given for the payment of a certain sum in denominations of foreign money,' but whether an instrument payable generally in money or currency of a foreign state is negotiable is not settled."' 17 18 A bill or note may be made payable in one particular denomination or kind of money.1o The most striking characteristic of both bills and notes at the present day is their negotiability. This quality, however, did not exist at first.20 16 King vs. Hamilton, 12 Fed Rep., 478. 17 Souther vs. Wallace, 20 Nova Scotia, 509; 16 Can. Sup. Ct., 717. 18 Am. & Eng. Ency. of Law, Vol. IV, p. 105. 10 Chryster vs. Renois, 43 N. Y., 209. 20 "It now becomes necessary to begin again near the same point of departure and trace the gradual recognition of the transferability of bills of exchange. Hitherto we have observed no traces of a custom to make bills of exchange payable to order or bearer. Just when this custom originated cannot be stated with certainty. It embodied a happy thought. That the bill of exchange should become negotiable was indispensable to growing commerce. Hartmann, a late German writer on bills of exchange, states that the first known instance of the endorsement of these instruments occurs in the Neapolitan Pragmatica of 1607. Savary is said by the French writer, M. Nougier, to have assigned it to a later date, to-wit, 1620. In England the law of bills was somewhat less advanced than on the continent, and we have good evidence that bills were never, in Eng land, made payable to order or bearer until after 1622." "John Marius published, in 1651, a small treatise concerning bills of exchange. It was republished about 1670 with some emendations and additions. In the preface to this edition he says his work is the fruit of twenty-four years' experience as a Notary Public in the Royal Exchange of London." "It is to be inferred from his preface that the usage and practice concerning bills of exchange were substantially the same in 1651 and 1670, and whatever advances in theory his treatise shows over Malynes's earlier essay (1622) belongs to the period between 1622 and 1651, rather than to the period from 1651 to 1670. This inference is corroborated by what we learn from other Even today, "while negotiability is the characteristic quality of bills and notes, it is not essential to their validity." Non-negotiable instruments may be declared upon as bills and notes," have been held to import a consideration," and are entitled to days of grace. 24 By By indorsing such an instrument the payee becomes liable to the questioned in England. The other phrase belongs to bills going into foreign parts or drawn in a foreign language.' "Another equally striking feature is that the custom of merchants now includes bills drawn in England upon another city within the realm. Marius describes himself as a notary of twenty-four years' standing for both inland and outland bills. In 1608, John Trenchant had observed in his arithmetic, printed at Lyons, that real exchange could only take place between cities subject to different lords. Neither does Malynes give recognition to inland bills. Marius takes some pains to vindicate their right to be placed upon the same footing as foreign bills. "A bill of exchange which shall be made for moneys taken up in Edinborough, York, Bristol, Exon, Plymouth, Dover, or any other part of England or Scotland, and payable at London, is in all things as effectual and binding as any bill of exchange made beyond the seas and payable here in and * The inland and outland bills ought to be esteemed of equal worth and the custom of merchants on both equally observed." "Both classes of bills being made payable to order or assigns, they were now transferable by indorsement, or, as he calls it in both cases, by assignment. He gives the following illustration of assignment by two successive holders: 'Pay the contents on the other side hereof to Mr. Humfrey N., or assigns, value of Mr. indorsee,25 but the latter Joseph B., Rotterdam, Oct. 4, 1654. Roger C.' The second indorsement is briefer: 'Pay the contents hereof to Mr. John D. (Signed) Humfrey N.' "He carefully states the effect of an indorsement in blank. It was sufficient to pass the title and authorize the holder to write a special indorsement to himself or receipt in full over the signature. "The effect of the absence of words of negotiability is stated in these terms: 'If the bill be made payable positively to such a man, and not to such a man or his assigns, or order, then an assignment on the bill will not serve the turn, but the money in the strictness of the letter must be immediately paid to such a man in person, and he must be known to be the same man mentioned in the bill of exchange, so that the money may not be paid to a wrong party, and so the acceptor forced to pay it twice. And if the bill be made payable positively to such a man as hath been said, such a man's name written on the back side of the bill in blank, is no sufficient warrant for another man to come (as in his name) to receive the money, but the man himself, to whom the bill is payable, must appear in person." Street's Foundations of Legal Liabilities, Vol. II, pp. 354 et seq. Coursin vs. Ledlie, 31 Pa. St., 506. "Kendall vs. Galvin, 15 Me., 131; 52 Am. Dec., 141. 23 Arnold vs. Sprague, 34 Vt., 402. "Reed vs. Murphy, 1 Ga., 236. 25 Bristol vs. Warner, 19 Conn., 7. cannot, independently of statute, sue the maker or drawer.'' 26 27 In the case of Arnold vs. Sprague's the Court said: "It is not essential to the validity of a bill of exchange or promissory note that it should be negotiable. The advantages arising from the negotiability of such instruments were originally the reason why they were held to be exceptions to the general rule of the common law that cases in action were not assignable; hence it was once considered that negotiability was essential to such instruments. But for a long time, both in this country and in England, it has been held, and is now settled law, that they need not be negotiable." SECTION 10. CONSIDERATION. Between the immediate parties a consideration is as necessary in the case of a bill or note as in the case of any other kind of contract." One who signs or indorses a note after it has been negotiated does not incur any liability, unless there is some other consideration.30 Bills and notes, however, are presumed to be given for a consideration, and the burden of proof is on the party alleging the contrary." 31 A Circuit court of the United States said on this point in Lipsmeier vs. Vehslage 32 "This suit is based on a promissory note negotiable in form. The plaintiff sues as indorsee of said note. The ordinary rule of law governing paper of this kind is that it imports on its face a consideration, in other words, that the party who gave the note entered into an obligation to pay the same, for pecuniary reasons, whereby the payee would be entitled to recover on the face of the paper. This note was transferred, as admitted, after maturity. If it had been transferred for value, to an innocent party, before maturity, the defenses that are submitted to you would not be considered. But it so happens, admittedly, that this note was transferred long after maturity; consequently you are to determine the respective rights of the parties as if Mr. Beckerman, the payee in the note, himself was suing here. In other words, the equities of the original transaction are open for inquiry. "This note was given, it seems, February 1, 1878, negotiable by its terms-a note payable in one year, and transferred long thereafter to this plaintiff. Some very nice questions have been presented to the court, under the statute of the United States, as to the jurisdiction of this tribunal, concerning which, in the present aspect of the case, it is unnecessary to trouble you. The court decides that the party is rightfully in court, and consequently the matter is submitted to you, and the questions of fact are "First, was there any consideration for this note? If not, you must find for the defendant. But the duty of showing that there was no consideration rests on the defendant. Notes of this character import consideration. In other words, the plaintiff is not bound to prove that the note was given for consideration, because, when a party signs paper of this kind, he admits, impliedly, that there was a good reason for so doing a valid reason. Consequently the burden is cast upon the defendant to show that there was no consideration. Notes sometimes may be given for the accommodation of the payee, or for any other than valid reasons. If so, it being the nature of a gift, the mere voluntary act from one to another, there is no obligation in law, if he chooses not to pay the note, for him so to do, by judicial process." 33 No contract is made and no rights are created upon a bill of exchange or promissory note until its delivery. The delivery of such bill or note is included in its making." Until delivery a bill or note is revocable and unenforceable." By delivery is meant a transfer of the possession of the instrument with intent to transfer the title thereto, and the acceptance thereof with the intention of receiving title.se SECTION 12. DAYS OF GRACE. "Days of grace are days added to the nominal time of payment of all bills or notes except those impliedly or expressly payable on demand, and are computed by excluding the day of date and including the day of payment." "7 37 Days of grace were originally only allowed to the drawee of a foreign bill to allow him to provide funds for its payment. They were later extended by the common law to other forms of negotiable instruments, but have now been very largely abolished by statute. "Dexter Savings Bank vs. Cope land, 77 Me., 263. Mitchell vs. Conley, 13 Ark., 414. "Hinsdale College vs. Thomas, 40 Wis., 661; Roberts vs. McGrath, 38 Wis., 52. se Am. & Eng. Ency. of Law, Vol. 40. |