APPENDIX A.

NEGOTIABLE INSTRUMENTS.

§ 2. What is meant by the "custom of merchants," or the "law merchant"?

What relation did it have to the law of negotiable instruments? §3. What is the difference between a common law debt, and the obligation expressed in a promissory note or bill of exchange?

§§ 4, 5. Richards sells to White a horse with a warranty of soundness, taking in exchange White's promissory note for $100, and also a contract by which White agrees to work for him for six months. Richards assigns the note and the contract to Donlin. The horse proves unsound, whereby the warranty is broken. What are Donlin's rights on the note and on the contract?

§ 6. Suppose, in the preceding case, that Richards, instead of assigning the note to Donlin, had indorsed it in blank and had lost it, and Donlin had found it and had sold it to a bona fide purchaser for value, without notice. What would have been the rights of the latter?

§§ 8a-28. Which, if any, of the following are good negotiable instruments?

(§ 8a.)

"Chicago, July 1, 1909. Pay to the order of John Carson five hundred dollars.

$500.

(§ 10, 11.)

RICHARD STEVENS."

"Chicago, Feb. 1, 1910.

I have borrowed from Richard Smith One Hundred Dollars ($100.)

(§ 13.)

CHARLES ASHER."

"Boston, Feb. 1, 1905.

Three months after date I promise to pay to the order of William Jones his bill against Thomas Williams, amounting to Two Hundred Dollars.

(§ § 14, 15.)

JOHN SMITH."

"Chicago, Feb. 1, 1910.

Pay to the order of Robert Morse fifty dollars ($50), if the amount now due and owing to me on account of com

missions, on sales made by me last month equals said amount, and charge the same against such commissions.

HARRY BURSON.

To the Lee and Henry Mfg. Co., Chicago."

"Akron, Ohio, July 1, 1909. Please pay to James Holt, or his order, twenty-five dollars ($25), for which you may re-imburse yourself by holding the amount out of my next month's salary.

To the Diamond Rubber Co.

"$5,000.

HENRY JOHNSON."

Buffalo, New York, Aug. 10, 1909. Six months after date, for value received, I promise to pay to the order of Joseph Weingarten Five Thousand Dollars out of the proceeds of the sale of five thousand (5,000) tons of iron ore now registered in my name at the docks of Norton & Co., in this city.

(§ 16.)

66

$10,000.

W. S. BURCHARD."

Chicago, June 1, 1909. For value received I promise to pay George Willams or order Ten Thousand Dollars, three months from date. This note is given in consideration of a promise by said George Willams (contained in a writing of even date herewith) to convey on the day of the maturity of this note an estate described in said writing.

(§ 17.) "$100.

EDWARD MOSS."

Grand Rapids, Mich., Sept. 3, 1909. Thirty days after date, for value received, I promise to pay to the order of J. D. Graff, one hundred dollars, together with 10 per cent. of the amount which may be paid to me by the Grand Rapids Furniture Co., as commissions on sales made by me during said thirty days.

S. K. WHEELER."

(§ 22.) "$500.

Chicago, Dec. 1, 1909.

For value received, I promise to pay to the order of

L. M. Whitford Five Hundred Dollars.

B. J. LEWIS."

"$100.

Chicago, May 15, 1909. Ten days after sight, pay to the order of Henry Ashton, One Hundred Dollars and charge to my account.

To George Sullivan & Co."

(§ 23.) "£50.

R. L. MURPHY.

Chicago, June 15, 1905.

Sixty days from date, for value received, I promise to pay to Roscoe Mason or order, Fifty Pounds Sterling, payable at the Commercial National Bank in Chicago.

(§ 26.) "$100.

S. K. BIDWELL."

Chicago, Aug. 5, 1908.

Ninety days after date, for value received, we promise to pay to the holder hereof, One Hundred Dollars; or at his option to deliver to him a good warranty deed conveying a lot in Shufeldt's addition to Chicago.

THE AMERICAN LAND & INVESTMENT CO.

By T. H. Lathrop, President."

(§ 27, 28.) "$1000.

Chicago, Oct. 11, 1906.

One year after date, for value received, I promise to pay to the order of myself, One Thousand Dollars, with interest at six per cent per annum.

J. H. HAMMOND."

§§ 30, 31. In the following note, can the Rookwood Mfg. Co., be held liable as a maker?

"$2,000.

Newark, N. J., March 10, 1903.

Thirty days after date, for value received, we promise to pay to the order of L. M. Conley, Two Thousand Dollars. P. H. ASHTON, President of Rockwood Mfg. Co. F. O. FISHER, Secretary."

§ 35. Is the following a good negotiable instrument?

"Chicago, March 5, 1910.

The Hibernian Banking Association.

Pay to the order of the County Treasurer of Cook County, Two Hundred Thirty-Seven Dollars.

($237.)

R. M. MURPHY."

§ 47. Defendant wrote his name on a blank piece of paper and left it with the proper officers of his bank for the purpose of having them use it to identify his signatures. One of the bank employes took the paper and wrote upon it a promissory note above defend

ant's signature. The paper passed to an innocent purchaser, who sought to hold the defendant liable upon it. What decision?

§ 48. Caswell, who was on friendly terms with defendant, represented to him that he had purchased shares of a corporation at 25 cents a share, which was less than their market value, and would sell one-half of his purchase to defendant at the price he had paid. for it, and that the stock would not be issued until some time in the future, at which time, if defendant should so elect, Caswell would return to him the note given for the stock and take it in his own name. Caswell had in fact paid only 10 cents a share for the stock, which was its full market value. Caswell indorsed the note to plaintiff, who was a bona fide purchaser for value without notice of any of the facts above set out. What are plaintiff's rights on the note?

§ 49. Baker sold to Davidson a horse with a warranty of soundness, and in payment therefor, Davidson made a promissory note to Baker's order, which however he retained in his possession and did not deliver. Shortly afterward, Davidson claimed that the horse was unsound, and refused to pay for it, destroying the note. Baker brought suit against Davidson, declaring upon the note as a lost instrument. What decision?

§ 52. Brown made and executed a promissory note payable to the order of Stuart, and delivered it to the latter upon condition that Stuart should also abtain the signature of Brown's brother to the note, before attempting to give it any effect. Stuart, without obtaining the other signature, sold and transferred the note to the plaintiff, who paid value for it and had no notice of the condition. What are his rights upon the note?

§§ 53, 54. Defendant signed a promissory note to the order of Clark, leaving a blank for the amount of the note, and delivered it to Clark, authorizing him to fill in the blank with the amount $100. Clark, in excess of his authority, inserted in the blank the amount $200, and transferred the note to the planitiff, who was a holder in due course without notice of the fact that the note had been executed and delivered in blank. What are plaintiff's rights upon the note!

§§ 57-60. Is a consideration necessary to support a negotiable instrument?

Is a consideration necessary to support the promise of an indorser?

Is an antecedent or pre-existing debt sufficient consideration to support a negotiable instrument payable on demand?

§ 63. Defendant made a negotiable promissory note to the order of the plaintiff and presented it to him as a gift. Plaintiff brought suit against defendant upon the note, but made no attempt to prove a consideration; nor was the question of consideration raised by the defendant as a defense. Defendant appealed from a judgment against him on the ground that the note was invalid for want of a consideration. What decision?

§ 64. Burrows was indebted to Friedman in the amount of $100 on a grocery bill. Friedman drew a bill of exchange on Burrows for $100 payable to the order of Lawson, and delivered it to the latter. Burrows refused to accept the bill and Lawson brought suit against him. What decision?

§ 65. Is an oral acceptance of a bill of exchange binding under the Negotiable Instruments Law?

§ 67. A bill of exchange drawn on Rogers and Co., was presented to them for acceptance, and instead of writing their acceptance upon the bill, they wrote a letter to the payee, stating that they accepted the bill. The payee negotiated the bill to the plaintiff, showing him the letter, and the latter purchased the bill in reliance upon the letter. Can he hold the drawees as acceptors?

Would the result be any different in the preceding case if the plaintiff had not been shown the drawees' letter?

§ 68. What is meant by a "virtual acceptance?"

A banking firm made an oral contract with one of their customers to accept any bill which he might draw upon them. He drew a bill upon them for $100 and negotiated it to the plaintiff, who had full knowledge of the oral contract and purchased in reliance upon it, paying full value for the bill. Can he hold the drawees as acceptors?

870. What is meant by a general acceptance as distinguished from a qualified acceptance?

Can a virtual acceptance be qualified?

§ 77. A bill drawn upon Rush & Co., was presented to them for acceptance and acceptance was refused. The payee then took the bill to the defendant with whom the drawer also dealt and the