tracts in general are now as much assignable as any other property; and even to this technical prohibition, there is a class of contracts

In England, bills and notes payable in notes of the Bank of England are not negotiable. Ex parte Iveson, 2 Rose, 225; Ex parte Davison, Buck, 31.

The addition of the words "with current exchange " does not affect the negotia bility of the instrument. Hill v. Tod, 29 Ill. 101; Bullock v. Taylor, 39 Mich. 137; Leggett v Jones, 10 Wis. 34.

A promissory note must contain a promise to pay. A mere acknowledgment of indebtedness is not a negotiable instrument, though the law implies therefrom a promise. The instrument must contain either an express promise or words which amount in legal effect to a promise. A form in common use in England, “I. O. U. £110," is not a promissory note. A mere due-bill, “Due A. B. $100," has been held to be negotiable. Jacquin v. Warren, 40 Ill. 459; Brady v. Chandler, 31 Mo. 28; Kimball v. Huntington, 10 Wend. 675; Lowe v. Murphy, 9 Ga. 338. The contrary has been held. Currier v. Lockwood, 40 Conn. 348; Read v. Wheeler, 2 Yerg. 50. If in the form "Due A. B. or bearer," "Due A. B. or order,” “Due A. B. on demand," it is, without contest, negotiable.

The engagement to pay must be absolute. Hence, if the instrument is payable only out of a particular fund, it is not negotiable. Read v. Buffalo, 67 N. Y. 526. But if the engagement is absolute, the appropriation of a particular fund to the payment, or the recital that the maker has deposited securities upon certain conditions as collateral, does not affect the negotiability. Littlefield v. Hodge, 6 Mich. 326; Towne v. Rice, 122 Mass. 67. If payable "when A. shall come of age," it is not negotiable, for A. may die a minor. Kelley v. Hemingway, 13 Ill. 604. But if payable “on demand after my decease" Bristol v. Warner, 19 Conn. 7; or "one day after date or at my decease" -Conn v. Thornton, 46 Ala. 588, it is negotiable, for death is certain. So, if it is to be paid "in the course of the coming season.' Cota v. Buck, 7 Metc. (Mass.) 588. A note to be paid "by 20th May, or when he completes the building according to contract," is held to be payable on or before the 20th May, and therefore negotiable. Stevens v. Blunt, 7 Mass. 240; Goodloe v. Taylor, 3 Hawks, 458.

Various stipulations or recitals are sometimes incorporated with bills and notes. The question is then presented, are such stipulations or recitals independent, leaving the separate engagement to pay money absolute, and therefore negotiable; or are they inseparable, making the engagement to pay conditional or uncertain, and therefore not negotiable. A stipulation that if the bill or note be not paid at maturity, or be sued, the obligor will pay to the holder a collection fee or attorney's fee, has been held to be an independent agreement, not affecting the negotiability of the instrument. Dietrich v. Bayhi, 23 La. An. 767; Gaar v. Louisville B. Co., 11 Bush, 180; Stoneman v. Pyle, 35 Ind. 103; Nickerson v. Sheldon, 33 Ill. 373; Bullock v. Taylor, 39 Mich. 137; Sperry v. Horr, 32 lowa, 184; Seaton v. Scoville, 18 Kansas, 433; Heard v. Bank, 8 Neb. 10. In other States it is held that such a stipulation makes the instrument non-negotiable. Woods v. North, 84 Pa. St. 407; Bank v. Gay, 63 Mo. 33. In some States such stipulation is held, not only an independent agreement, but also one that is invalid, either as being a stipulation for usury, or as being against public policy. Witherspoon v. Messenger, 14 Bush, 214; Martin v. Bank, 13 Ohio R. 250; Meyer v. Hart, 40 Mich. 517. It has been made illegal in Indiana by statute of 1875. Nelson v. White, 61 Ind. 139.

A note with a power of attorney to confess judgment is held in Pennsylvania not to be negotiable. Sweeney v. Thickstun, 77 Pa. St. 131. In Ohio it is negotiable. Osborn v. Hawley, 19 Ohio R. 130. A power of attorney is not a negotiable instrument; hence, if the power is simply to confess judgment in favor of the payee, it does not enure to the benefit of an indorsee. Osborn v. Hawley. But if made “in favor of the holder of the note," it is valid in accordance with its terms, for the benefit of every holder. Clements v. Hull, 35 Ohio St. 141.

The negotiability of a note is not affected by a recital therein that it is given in payment of specified property-Collins v. Bradbury, 64 Maine, 87; nor by the additional recital that a lien is reserved on the property - Duncan v. Louisville, 13 Bush, 378; or that the maker has deposited certificates upon certain conditions as collateral; or that the thing sold is also warranted - Mitchel v. McCabe, 10 Ohio R. 405. A note payable on its return to the maker is negotiable. Frank v. Wessel, 64 N. Y. 155. But if payable on the return of it and also of other independent writings, it is not. Smilie v. Stevens, 39 Vt. 316.

A negotiable instrument altered in any material particular becomes a different contract from the one which the obligor made, and is nullified and destroyed as a legal obligation. In England, the consequence is the same whether the change is made by

denominated negotiable, which have always formed an exception; it being the very essence of these contracts that they can be trans

a party to the instrument or by a stranger. Davidson v. Cooper, 13 M. & W. 778. In the United States, when the change is made by a stranger to the instrument, it is called a spoliation, has no more effect than an accidental obliteration, and does not affect the validity of the instrument in the hands of a bona fide holder, if the instrument in its original form can be discerned and identified. Bigelow v. Stephen, 35 Vt. 521; Ford v. Ford, 17 Pick. 418; Davis v. Carlisle, 5 Ala. 707; Crocket v. Thomason, 5 Sneed, 342; Lee v. Alexander, 9 B. Monroe, 25; Cochran v. Nebeker, 48 Ind. 459; Vogle v. Ripper, 34 Ill. 106; Lubbering v. Kohlbrecker, 22 Mo. 596; Bank v. Roberts, 45 Wis. 373. If the alteration, by a party, is fraudulent, not only is the instrument destroyed, but the debt for which it was given is extinguished. Wheelock v. Freeman, 13 Pick. 165. If the alteration is innocent, the instrument only is destroyed, the indebtedness for which it was given can still be recovered. Clute v. Small, 17 Wend. 242; Merrick v. Boury, 4 Ohio St. 60; Clough v. Seay, 49 Iowa, 111; Matteson v. Ellsworth, 33 Wis. 488. A note which has been altered and then restored to its original form, in which condition it passes into the hands of a bona fide holder, is valid in the hands of such holder. Shepherd v. Whetstone, 51 Iowa, 457. When the drawer or maker is guilty of contributory negligence, as where he leaves a blank which is subsequently filled so skilfully as not to excite suspicion, or writes a stipulation in pencil, which is rubbed out, or on the margin, which is cut off, so that the suspicions of a prudent man would not be aroused, the instrument in its altered form is valid in the hands of a bona fide holder. Zimmerman v. Rote, 75 Pa. St. 188; Seibel v. Vaughan, 69 Ill. 257; Bank v. Armstrong, 62 Mo. 59; Vischer v. Webster, 8 Cal. 109. But the contrary has been held in Kitchen v. Place, 41 Barb. 465; Bank v. Clark, 51 Iowa, 264. If the drawer or maker, leaving blanks in the instrument, hand it to one who is authorized to fill such blanks in a specified manner before delivery, and such agent, exceeding his authority, fills the blanks otherwise, the instrument is valid as filled in the hands of a bona fide holder.

A blank indorsement on negotiable paper by a party to it is a written contract, the unexpressed terms of which are supplied by the law, and cannot be varied by parol proof. Martin v. Cole, Cent. L. J. Jan. 1882, 46. As between such indorser and his transferee and others having notice, the effect of such indorsement may be qualified by a contemporaneous writing. Davis v. Brown, 94 U. S. 127. A stranger to the instrument, who indorses in blank below the indorsement of the payee, is an indorser, and such liability cannot be varied by parol proof. Daniel on Negotiable Instruments, 707, and cases cited. The rule, perhaps, is otherwise in Ohio. Robinson v. Abell, 17 Ohio R. 36. A stranger to the instrument, who indorses in blank before the payee, is, in most of the States, prima facie a joint maker; in Ohio and Illinois he is prima facie a guarantor - Champion and Lathrop v. Griffith, 13 Ohio R. 223; Parkhurst v. Vail, 73 Ill. 343; Boynton v. Price, 79 Ill. 145; in Indiana he is prima facie indorser-Browning v. Merritt, 61 Ind. 425. If the evidence simply shows that such indorsement was made at the time of the execution of the note, or before delivery to the payee, he is held to be a joint maker. As between such person and the payee, it is competent to show by parol evidence just what the understanding of the parties was, and fix the consequent liability as maker, or guarantor, or indorser. In New York and Pennsylvania such person is an indorser. Phelps v. Vischer, 50 N. Y. 69; Shafer v. Bank, 59 Pa. St. 144. This whole topic of blank indorsement before the payee is fully discussed in Good v. Martin, 95 U. S. 90.

A guarantor differs from a surety. A surety is, along with his principal, an original and primary debtor; his liability is not affected by notice being given or not given of his principal's default, or by demand being made or not made upon the principal. The liability of a guarantor is collateral, and he may be discharged by the creditor's failure to make demand on the principal or give notice of his default to the guarantor. The guarantor differs from an indorser. The indorser's liability is conditional; he is entirely discharged unless demand and notice be promptly and strictly given; or, rather, he does not become liable except upon such prompt and strict demand and notice. The guarantor is entitled only to reasonable demand and notice, and is discharged only so far as he is damaged by the creditor's delay.

Negotiable paper payable to order could be assigned at common law and under the statute of Anne only by indorsement. But an assignee without indorsement was recognized as owner in equity; and, all titles that were valid in equity being valid under the code, such assignee is owner, and can sue in his own name in States that have adopted the code of civil procedure. But such assignee, having not the legal title, but only an equitable title, he holds the paper subject to the equities between the ori

ferred absolutely from hand to hand, so as to authorize the holder to sue at law in his own name.

ginal parties which grow out of the transaction in which the instrument was given. And this rule is the same whether the note is negotiable or non-negotiable. Eversole v. Maule, 50 Md. 95; Reddish v. Ritchie, 17 Fla. 807; Garratt v. Jaffray, 10 Bush, 413; Combes v. Chandler, 33 Ohio St. 178; Thompson v. Shoemaker, 68 Ill. 256; Patterson v. Cave, 61 Mo. 439; Hayward v. Stearns, 39 Cal. 58. If the instrument is negotiable, and has come into the hands of a bona fide indorsee so as to be discharged of equities, the assignee, without indorsement of such indorsee, would also undoubtedly hold it discharged of equities.

A bona fide indorsee must be a purchaser in good faith, in the ordinary course of business, and for value. This was the rule from the first. In 1824 Lord Tenterden pronounced the judgment of the Court of Common Pleas, that in the case of a lost or stolen bill or note, although the holder had given value for it, yet, if he took it under circumstances which ought to have excited the suspicions of a prudent man, he could not recover. Gill v. Cubitt, 3 Barn. & Cress. 466. The effect of this ruling was to discredit English paper on the Continent. Twelve years later the Court of King's Bench restored the old rule, holding that gross negligence alone would not defeat the title of the holder; gross negligence sometimes being proof of, or tending to prove, mala fides, but not being the same thing. Goodman v. Harvey, 4 Ad. & El. 870. The rule as restored in Goodman v. Harvey remains, without question, the rule in England. For a time, Gill v. Cubitt was accepted as authority in the United States, and was followed in a number of the States, but the rule as restored in Goodman v. Harvey now prevails. Farrell v. Lovett, 68 Me. 326; Bank v. Savery, 127 Mass. 75; Insurance Co. v. Hachfield, 73 N. Y. 226; Hamilton v. Vought, 34 N. J. Law, 187; Battles r. Laudenslager, 84 Pa. St. 446; Bank v. Hooper, 47 Md. 88; Matthews v. Poythress, 4 Ga. 287; Johnson v. Way, 27 Ohio St. 374; Shreeves v. Allen, 79 Ill. 553; Hamilton v. Marks, 63 Mo. 167; Helbrun v. Krolick, 36 Mich. 371; Pond v. Agricultural Works, 50 Iowa, 596; Murray v. Lardner, 2 Wall. 710; Collins v. Gilbert, 94 U. S. 753.

In order to be a purchaser for value, it is of course not necessary to pay the face of the note or bill. A purchase of a note secured by mortgage for half its faceBaily v. Smith, 14 Ohio St. 402, and the purchase of the unsecured note of a maker known to be solvent for less than half-Phelan v. Moss, 67 Pa. St. 59, have been held to constitute the purchaser a bona fide holder. Any amount, indeed, seems to be sufficient, unless it is so inconsiderable as to be evidence of bad faith, evidence that the purchaser must have known of the existing infirmities in the instrument. Whether or not it is such evidence is a question for the jury.

Chancellor Kent, in Bay v. Coddington, 5 Johns. Ch. 54, held that an indorsee who took the indorsed paper only as security for a precedent debt was not a bona fide holder. This decision was affirmed by the Court of Errors in Coddington v. Bay, 20 Johns. 637. The Supreme Court of the United States, in Swift v. Tyson, 16 Pet. 1, declared that taking negotiable paper in payment of, or as collateral security for, a precedent debt, is taking it for value and in due course of trade, and such indorsee, acting in good faith, is a bona fide holder. The Court of Errors of New York subsequently, in Stalker v. McDonald, 6 Hill, 93, criticised the reasoning in Swift v. Tyson, and reaffirmed Coddington v. Bay. It would be a vain labor to assort the countless decisions in the United States bearing upon this vexed question. To a certain extent, there is now a general accord. The fact seems to be, as stated by Justice Harlan in Railroad Co. v. Bank, 102 U. S. 14, see p. 25, that, in the absence of statute to the contrary, where negotiable paper is received in payment of an antecedent debt, or where it is transferred by indorsement as collateral security for a debt created, or a purchase made, at the time of the transfer; or the transfer is to secure a debt not due, under an agreement, express or to be clearly implied from the circumstances, that the collection of the principal debt is to be postponed or delayed until the collateral matured; or where time is agreed to be given, and is actually given, upon a debt overdue, in consideration of the transfer of negotiable paper as collateral security therefor; or where the transferred debt takes the place of other paper previously pledged as collateral security for a debt, either at the time such debt was contracted or before it became due, in each of these cases the holder who takes the transferred paper, before its maturity, and without notice, actual or otherwise, of any defence thereto, is held to have received it in due course of business, and, in the sense of the commercial law, becomes a holder for value." 'Upon these propositions there seems at this day to be no substantial conflict of authority." The courts of New York, however, still dissent as to one of the above clauses. "A mere receipt of a bill or note in payment of, or as security for, an antecedent debt, has never, in this State, been held suf

Requisites of Negotiability. Negotiable contracts were introduced in modern times for the benefit of commercial intercourse. They are designed to circulate readily from hand to hand, and thus multiply the facilities of traffic and credit; and in order to answer this purpose, they must evidently carry upon their face all the means of determining their worth. Accordingly, the following properties are requisite to render a contract negotiable; first, it must be in writing; secondly, it must be for the payment of money only, and not for other property; thirdly, it must be for the payment of a sum certain, and not for unliquidated damages; fourthly, the sum promised must be payable absolutely, and without conditions; fifthly, the contract must contain words of negotiability, as "to order," "to assigns," or "to bearer;" and sixthly, it must import a consideration, so as to preclude the necessity of inquiry and proof. A contract possessing these properties is fitted for negotiation, since it is liable to no other question than what relates to the responsibility of the parties.

Mode of Transfer. The transfer is effected in two ways: first, where the contract is payable "to order," or "to assigns," it is negotiable by indorsement: that is, by writing upon the back; and secondly, where it is payable "to bearer," it is negotiable by mere delivery, without writing. (a) Indorsements are of two ficient to protect the title of the holder as against the equities of third persons; and some new credit must be given, new advance made, or some prior security parted with, or a debt absolutely satisfied and extinguished, in order to complete the title of the holder." Weaver . Barden, 49 N. Y. 286, see p. 294; Turner, Adm'x v. Treadway, 53 N. Y. 650; Moore v. Rider, 65 N. Y. 438. A note taken in payment of a simple-contract debt, no securities being surrendered, is subject to equities. Turner v. Treadway, 56 How. Pr. R. 56.

The rule in Ohio is, "When a debt is created without any stipulation for further security, and the debtor afterward, without any obligation to do so, voluntarily transfers a negotiable instrument to secure the pre-existent debt, and both parties are left in respect to the pre-existent debt in statu quo, no new consideration, stipulation for delay, or credit, being given, or right parted with, by the creditor, he is not a holder of the collateral for value in the usual course of trade, and receives it subject to all the equities existing against it at the time of the transfer." Roxborough v. Messick, 6 Ohio St. 448. This rule prevails in New York, as seen by the cases above cited, and in some other States. Nutter v. Stover, 48 Me. 163; Rice v. Riatt, 17 N. H. 116; Royer v. Bank, 83 Pa. St. 248; Fenouille v. Hamilton, 35 Ala. 319; Bowman v. Van Kuren, 29 Wis. 220; Craighead v. Wells, 8 Baxter, 38; and see Tyrrell v. Railroad Co., 7 Mo. App. 294. The Supreme Court of the United States holds that even in the case described in Roxborough v. Messick, the transfer is in the due course of trade, and the assumption of responsibility by the indorsee by the mere fact of the indorsement is sufficient consideration, and such indorsee holds the instrument discharged of equities. Railroad Company v. National Bank, 102 U. S. 14. The rule as laid down by the Supreme Court of the United States is also the rule in England - Poirier v. Morris, 2 El. & Bl. 89: Currie v. Misa, L. R. 10 Ex. 153; and in many of the States, Fisher v. Fisher, 98 Mass. 303; Osgood v. Bank, 30 Conn. 27; Cobb v. Doyle, 7 R. I. 550; Straughan v. Fairchild, S. C. Ind. Apl. 1882; Morris v. Preston, 93 Ill. 215. The Supreme Court of Ohio declines to follow Railroad Co. v. National Bank, 102 U. S. 14; Pitts, Graham, & Co. v. Foglesong, 37 Ohio St.

An indorsee who, taking negotiable paper as collateral security, is held to take subject to equities between the original parties, still has legal title to the paper, and can recover against an accommodation indorser who indorsed without restriction as to the use to be made of the paper. Grocers' Bank v. Penfield, 69 N. Y. 502; Lord v. Ocean Bank, 20 Pa. St. 384; Pitts, Graham, & Co. v. Foglesong, 37 Ohio St.

(a) Under the Ohio statute, it is held that a promissory note, payable to a person or bearer, is negotiable by delivery, and a sealed bill or note in the same form is only negotiable by indorsement. Avery v. Sawyer, 14 Ohio, 542.

kinds: first, a blank indorsement, where the holder simply writes his name, without any other words, which is equivalent to an order to pay to bearer, for it thenceforth passes by mere delivery; and any subsequent holder may fill up the indorsement so as to make the contract payable to himself; and secondly, a special indorsement, which specifies the person to whom the contract is transferred. If it be indorsed to him or his order, he can only transfer it by another indorsement. But the indorsement does not require negotiable words. The first indorser may stop the negotiability by expressing that intention; as by indorsing to one person only, to one person and no other, and the like; but in the absence of such restrictive words, the negotiability remains; and it is said that none but the indorser can, even by express words, restrict the negotiability.

What Contracts are Negotiable. At common law, bills of exchange were the only negotiable contracts; by the statute of Anne, promissory notes were placed upon the same footing; and by our statute, bills, notes, and bonds are made equally negotiable; but this statute does not vary the requisites of negotiability before enumerated; indeed it is sufficient, so far as negotiability is concerned, to consider all negotiable instruments as divided into two classes, orders and promises: for a bill of exchange is a written order for the payment of money; which definition equally embraces checks, drafts, and orders commonly so called: and a promissory note is a written promise for the payment of money, which definition equally embraces promises under seal, whether denominated bonds or single bills. The parties are thus designated. In a bill, the person who makes the order is called a drawer: the person in whose favor it is made, the payee and the person to whom the order is addressed, the drawee, and after acceptance, the acceptor. In a note, the person who makes the promise is called the maker; and the person to whom it is made, the payee. When the payee, either of a bill or note, has indorsed it to a third person, it is then said to be negotiated. He becomes the indorser, and the person to whom it is transferred, the indorsee. He may in his turn become the indorser, and so on indefinitely. The person having a right to the bill or note at any particular time is called the holder.

Common form of Notes and Bills. No set form of words is necessary, either for a note or bill. (a) It is usual and expedient to begin with naming the place and date, but not indispensable; since these may be proved by parol. The bill then proceeds substantially in a form like this: "Three months after date, pay to the order of C. one thousand dollars for value received." This is signed

(a) As to the words which will constitute a bill or note, see cases cited in 1 Am. Leading Cases, 312-27. Weidler v. Kauffman, 14 Ohio, 455; Mitchell v. M'Cabe, 10 id. 405; Moore v. Gano, 12 id. 300; Osborne v. Hawley, 19 id. 130. Jury v. Barker, 1 Ellis, B. & E. 459; Watson v. Evans, 1 Hurl. & Colt. 662; Ives v. Farmers' Bank, 2 Allen, 236; Arnold v. Sprague, 34 Vt. 402; Carver v. Hayes, 47 Maine, 257; Yates v. Nash, 8 C. B. (N. s.) 581.