Argument for Plaintiff in Error. Parsons Bills and Notes, 30; Chitty on Bills, 12 Am. ed. 134 et seq.; Story on Bills, $$ 4-47. The statute of Illinois does not change the ordinary rules further than to allow a note to be payable in personal property as well as money. These cardinal principles are undisputed, and the only difficulty that has ever arisen has been in their application. That instruments of the character of those in question here evidence a conditional sale by which no title passes until conditions are performed rather than an absolute sale with mortgage back for the purchase price, was held by this court in the recent case of Harkness v. Russell, 118 U. S. 663, where in an exhaustive decision considering an instrument very similar in its provisions to those in question in the present case, it reviews nearly all the authorities in this country on the subject. While in that case, as well as many others where this class of papers has come up, the question was as to the title to the property acquired by the maker of the instrument, and the holding that, prior to compliance with the conditions, he had none whatever, regardless of where the possession might be, it follows as a logical sequence that his final obligation to pay must be dependent upon his getting what forms the consideration for the promise, otherwise there is an absolute want or failure of consideration. Until the executory agreement is performed, and the conditions fulfilled or waived, there is a contingency, it may be more or less remote, that the property may be destroyed or the vendor incapacitated from performance when the time for performance arrives. The obligation to pay is affected by this contingency from the time the agreement is made, and is not changed by its subsequent transfer. See Third Nat. Bank v. Armstrong, 25 Minnesota, 530; Sloan v. McCarty, 134 Mass. 245; Swallow v. Emery, 111 Mass. 355; Killam v. Schaeps, 26 Kansas, 310; South Bend Iron Works v. Paddock, 37 Kansas, 510; Stevens v. Johnson, 28 Minnesota, 172; Deering v. Thom, 29 Minnesota, 120; Fletcher v. Thompson, 55 N. H. 308; Bannister v. Rouse, 44 Michigan, VOL. CXXXVI-18 Argument for Plaintiff in Error. Apparently opposed to this application of the rule is Mott v. Havana Bank, 22 Hun, 354; Heard v. Dubuque County Bank, 8 Nebraska, 10; and Newton Wagon Co. v. Diers, 10 Nebraska, 284. Had the transaction been in the nature of sale absolute, with mortgage back to secure deferred payments, the instruments might be said to come within the authorities holding that the negotiable character of promissory notes is not to be affected by an agreement that is merely collateral to the promise to pay. But here the parties have by the express terms of their agreement evidenced a positive intention that the title should not pass until all the conditions of payment were fully complied with, and there is nothing in the instruments that will operate to modify or change this positive intention so expressed. See Call v. Seymour, 40 Ohio St. 670; Fosdick v. Schall, 99 U. S. 235; Harkness v. Russell, 118 U. S. 663, and cases cited; Dom. Sewing Mach. Co. v. Arthurhultz, 63 Indiana, 322; Cole v. Mann, 62 N. Y. 1. The vendor, who seeks to protect himself may do this either by a conditional sale retaining the ownership with or without the possession until all the conditions are complied with and full payment made, or by an absolute sale and transfer of the title with a mortgage back; and no matter what the form of the instrument the question is one of intention, as evidenced by the instrument itself. Hervey v. Rhode Island Locomotive Works, 93 U. S. 664; Murch v. Wright, 46 Illinois, 487; Fosdick v. Schall, 99 U. S. 235; Call v. Seymour, 40 Ohio St. 670; Harkness v. Russell, 118 U. S. 663. As this is not a question between claimants of the property sold, the chattel mortgage act of Illinois cannot affect the matter one way or the other. The Illinois statute on negotiable instruments does not interfere with either of the positions here taken. In several cases determined by the Supreme Court of that State, it has been held that to come within the operation of the statute the promise must be an absolute and unconditional See Husband v. Epling, 81 Illinois, 172; Turner v. Peoria &c. Railroad, 95 Illinois, 134; Canadian Bank v. McCrea, 106 Illinois, 281. one. Opinion of the Court. Mr. John P. Wilson for defendant in error. Mr. Charles Noble Gregory and Mr. J. C. Gregory filed a brief for defendant in error. MR. JUSTICE HARLAN, after stating the case in the opinion of the court as above reported, continued: Are the writings in suit to be regarded as promissory notes to be protected, in the hands of bona fide holders for value, according to the rules of general mercantile law as applicable to negotiable instruments, or are they anything more than simple contracts subject, in the hands of transferees, to such equities and defences as would be available between the original parties? This is the question upon which, it is conceded, depends the correctness of the several rulings to which the assignments of error refer. By the statute of Illinois revising the law in relation to promissory notes, bonds, due bills and other instruments in writing, approved March 18, 1874, and in force July 1, 1874, (Rev. Stats. Illinois 1874, p. 718; 2 Starr & Curtis' Anno. Stat. 1651, c. 98; Rev. Stats. 1845, p. 384,) it is provided: "SEC. 3. All promissory notes, bonds, due bills and other instruments in writing, made or to be made, by any person, body politic or corporate, whereby such person promises or agrees to pay any sum of money or articles of personal property, or any sum of money in personal property, or acknowledges any sum of money or article of personal property to be due to any other person, shall be taken to be due and payable, and the sum of money or article of personal property therein mentioned shall, by virtue thereof, be due and payable as therein expressed. "SEC. 4. Any such note, bond, bill or other instrument in writing, made payable to any person named as payee therein, shall be assignable, by endorsement thereon, under the hand of such person, and of his assignees, in the same manner as bills of exchange are, so as absolutely to transfer and vest the property thereof in each and every assignee successively." Other sections of the statute throw some light on the ques Opinion of the Court. tion before us. The fifth section provides that any assignee to whom such sum of money or personal property is by endorsement made payable, or, he being dead, his executor or administrator, may, in his own name, institute and maintain the same kind of action for the recovery thereof against the person making and executing the note, bond, bill or other instrument in writing, or against his heirs, executors or administrators, as might have been maintained against him by the obligee or payee, in case it had not been assigned. By the sixth section no maker of, or other person liable on, such note, bond, bill or other instrument in writing, is allowed to allege payment to the payee, made after notice of assignment, as a defence against the assignee. The eighth section provides: "Any note, bond, bill, or other instrument in writing, made payable to bearer, may be transferred by delivery thereof, and an action may be maintained thereon in the name of the holder thereof. Every endorser of any instrument mentioned in this section shall be held as a guarantor of payment unless otherwise expressed in the endorsement." The ninth section allows the defendant, when sued upon a note, bond or other instrument in writing, for the payment of money or property, or the performance of covenants or conditions, to prove the want or failure of consideration, "provided that nothing in this section contained shall be construed to affect or impair the right of any bona fide assignee of any instrument made assignable by this act, when such assignment was made before such instrument became due." The eleventh section provides that "if any such note, bond, bill or other instrument in writing, shall be endorsed after the same becomes due, and any endorsee shall institute an action thereon against the maker of the same, the defendant, being maker, shall be allowed to set up the same defence that he might have done had the action. been instituted in the name and for the use of the person to whom such instrument was originally made payable, or any intermediate holder." Under the twelfth section, if the instrument has been assigned or transferred by delivery to the plaintiff after it became due, "a set-off to the amount of the plaintiff's debt may be made of a demand existing against any Opinion of the Court. person or persons who shall have assigned or transferred such instrument after it became due, if the demand be such as might have been set off against the assignor, while the note or bill belonged to him." If the instrument is assigned before the day the money or property therein mentioned becomes due and payable, then, by the thirteenth section, the defendant, in an action brought by the assignee, is allowed to give in evidence at the trial any money or property actually paid on the note, bond, or bill or other instrument in writing, before it was assigned to the plaintiff, on proving that the plaintiff had "sufficient notice of the said payment before he accepted or received such assignment." It is contended by the defendant that these statutory provisions, so far as they embrace instruments not negotiable at common law, relate only to the manner of their endorsement or transfer, and that the endorsee takes them, as before the statute, subject to all the defences that might be interposed in an action between the original parties. This view is inconsistent with the decisions of the Supreme Court of Illinois. Some of these decisions will be referred to as indicating the scope and effect of the local statute, as well as the views of that court upon the general principles of commercial law involved in this case. In Stewart v. Smith, 28 Illinois, 397, 406, 408, the principal question was as to the negotiability under the above statute of the following instrument: "Chicago, 21st of January, 1859. Received from teams in our pork-house, No. 114 West Harrison Street, 280 hogs, weighing 45,545 pounds, the product of which we promise to deliver to the order of Messrs. Stevens & Brother endorsed hereon. G. & J. Stewart." The court said: "Testing the writing by this statute, there cannot be a doubt upon its assignability. It is an instrument in writing; it purports to be made by persons; by it, those persons promise and agree to deliver a certain article of personal property, to the order of certain other persons. By force of the statute, this article of personal property mentioned in the instrument of writing so made, by virtue of its being so mentioned and in such form of words, must be |