under no circumstances, would they, on paying the holder, have any right either by subrogation or indemnity against the accommodation acceptor or maker. The authorities are unanimous against the discharge of the party accommodated, although he is only secondarily liable on the instrument.1 These subsections are not in the English act, and should either be eliminated from the American act or amended. Furthermore, if it is thought best to retain them in an amended form, another subsection should be added, to the effect that an accommodation acceptor or maker, although the party primarily liable on the instrument, will be discharged, if the holder, with knowledge of the accommodation, releases, or by a valid agreement undertakes to give time to the accommodated drawer or indorser. The authorities are almost unanimous on this point also, although in a few jurisdictions the accommodation party must resort to equity for his relief. the judgment of the writer, the wise course is to drop subsections 5 and 6 from the act.

In

SECTION 175 subrogates the payor for honor "to the rights of the holder as regards the party for whose honor he pays and all persons liable to the latter." This section is identical with section 68-5 of the English act. Since an accommodation acceptor is not liable to the drawer, one who pays for the honor of the drawer cannot charge such an acceptor. Lord Erskine so ruled in Ex parte Lambert,3 disapproving of Lord Loughborough's decision to the contrary in Ex parte Wackerbath.* But in Er parte Swan, Malins, V. C., condemned with some emphasis the doctrine of Lord Erskine, and Ex parte Lambert has since been regarded as an overruled case. In the face of this the English

5

1 Collott v. Haigh, 3 Camp. 281; Hill v. Read, 6 D. & Ry. N. P. 26; Sargent v. Appleton, 6 Mass. 85; Parks v. Ingram, 22 N. H. 283. The following cases turn on the same principle: Ludwig v. Iglehart, 43 Md. 39; Gloucester Bank v. Worcester, 10 Pick. 528; Bruen v. Marquand, 17 Johns. 58.

2 Ewin v. Lancaster, 6 B. & S. 571; In re Goodwin, 5 Dill. 140; Hall v. Capital Bank, 71 Ga. 715; Lacy v. Lofton, 26 Ind. 324; Adle v. Metoyer, 1 La. An. 254; Guild v. Butler, 127 Mass. 386; Canadian Bank v. Coumbe, 47 Mich. 358; Meggatt v. Baum, 57 Miss. 22; Westervelt v. Frech, 33 N. J. Eq. 451; T. N. Bank v. Hastings, 134 N. Y. 501 (semble); State Bank v. Smith, 85 Hun, 200 (semble); Shelton v. Hurd, 7 R. I. 403. The opposite rule obtains in Pennsylvania and perhaps in Alabama. Stevens v. Monongahela Bank, 88 Pa. 157; Wilson v. Isbell, 45 Ala. 142. But even these states lend no support to the discharge of the accommodated drawer or indorser by a release or time given to the accommodation acceptor or maker.

8

13 Ves. 179.

4 5 Ves. 574.

5 L. R. 6 Eq. 344-365.

Byles, Bills (roth ed. 1874), 266, 277, and in later editions. Chitty, Bills (11th ed. 1878), 352. "The case of Ex parte Lambert is no longer law." 4 Am. and Eng. Ency. of Law (2d ed.), 499.

Bills of Exchange Act and the American Negotiable Instruments Law have codified the overruled opinion of Lord Erskine. Mr. Chalmers in his excellent treatise is careful to indicate every instance in which the English act modifies the previous law. But he gives no intimation that section 68–5 introduces any change. One must infer that he was unconscious of any change. This inference is confirmed by the first edition of his Digest,1 published four years before the passage of the English act, in which he defines the right of the payor of honor in substantially the same language as that of the act. Mr. Chalmers's statement of the result of the decisions is in general so accurate that one wonders at this slip, which is all the more surprising, because in his Table of Cases Overruled he includes Ex parte Lambert as overruled by Ex parte Swan. Section 175 should be amended by substituting for "liable," the fourth word from the end, the word "prior." This amendment would make the section accord with the Continental Law,2 with the California Code, and with mercantile understanding.

SECTION 186 provides that the failure to present a check for payment within a reasonable time will discharge the drawer "to the extent of loss caused by the delay," but makes no provision for the effect of not giving due notice of dishonor when the check has been presented but not paid. Such a case must therefore be governed by section 89, with the result that the drawer is absolutely discharged, although the laches in giving notice has not caused any loss to him. This is obviously an undesirable rule, and is an innovation of the English and American codification. The courts and the text-writers give the same effect to delay in presentment and delay in sending notice of dishonor.*

It remains to mention briefly the omissions in the Negotiable Instruments Law. The English act deals with the effect of the loss or destruction of a bill or note,5 defines the liability of the acceptor to the drawer, and the liability of parties in default for

1 Page 192.

2 French Code de Commerce, Art. 159, translated in 3 Rand. Comm. Paper (2d ed.), 2836; German Wechselordnung, sect. 63, translated in 3 Rand. Comm. Paper (2d ed.), 2800.

8 Sec. 3205, 3 Rand. Comm. Paper (2d ed.), 2727.

4 Clark v. Nat. Bank, 2 MacArthur, 249; Griffin v. Kemp, 46 Ind. 172; Gregg v. George, 16 Kan. 546; Stewart v. Smith, 17 Ohio St. 82; Purcell v. Allemong, 22 Grat. 739; In re Brown, 2 Story, 502; Story, Prom. Notes, § 493; Dan. Neg. Inst. (4th ed.) § 1587; 2 Benj. Chal. (2d ed.) 270.

5 Secs. 69, 70,

6 Secs. 57 (1), 59 (2 a).

interest, damages, and reëxchange,1 and contains several provisions relating to the difficult subject of Conflict of Laws.2 There is nothing in the American act on any of these topics. Neither act mentions the duty of the drawee of a check to honor it, if in funds, nor the effect of the failure of the last indorser to receive or to transmit notices of dishonor, duly mailed with the notice to himself, to be forwarded to prior indorsers.3 These omissions, although marring the symmetry of the new code, cannot be urged as fatal objections to its general adoption.

But if the preceding criticisms are well founded, the errors and imperfections of the Negotiable Instruments Law are so numerous and so serious that, notwithstanding its many merits, its adoption by fifteen states must be regarded as a misfortune, and its enactment in additional states, without considerable amendment, should be an impossibility.

Uniformity of amendment would be secured, and the passage by all the states of a judicious code of Bills and Notes would be accelerated, if the commissioners would reconsider the present Negotiable Instruments Law and submit it, in a revised form, with their approval, and if also they would suggest the form of supplementary legislation requisite to secure the necessary amendments in the states which have already passed the Negotiable Instruments Law. If this action on the part of the commissioners is found to be impracticable, it is hoped that the amendments proposed in this paper may commend themselves to the state. legislatures. Fortunately the correction of many of the errors requires only the use of scissors.

In pointing out the defects in the new code the writer must not be understood as criticising either the zeal or the skill of the commissioners. They made a mistake, it is believed, but not an unnatural one, in view of the novelty of the work, in not securing an abundance of competent criticism, both public and private, from widely different sources, before issuing with their sanction the final draft of the proposed law. To the lack of adequate criticism must be ascribed the shortcomings of the Negotiable Instruments Law. JAMES BARR AMES.

1 Sec. 57 (1), (2), and (3).

2 Sec. 72 (1), (2), and (3).

8 Such failure discharges the prior indorsers according to Aldine Co. v. Warner, 96 Ga. 370; Van Brunt v. Vaughan, 47 Iowa, 145 (semble); Stix v. Matthews, 63 Mo. 371, 375. But Wamesit Bank v. Buttrick, 11 Gray, 387, is contra.

A DEFENSE OF THE NEGOTIABLE INSTRUMENTS

LAW.1

BY LYMAN D. BREWSTER,

PRESIDENT OF THE NATIONAL CONFERENCE ON UNIFORM LAWS.

It was with great pleasure that a sub-committee of the Conference of Commissioners on Uniform State Laws had the privilege of discussing the Negotiable Instruments Law with Professor James Barr Ames, the Dean of the Harvard Law School.

He had kindly consented, on request, to meet with us, at the annual session, at Saratoga, in August last.

It was with no less pleasure that, after two or three days' reexamination of the Act, with reference to the criticisms of the Dean, we were able to report that, in our judgment, no change in the Act was needed, and to have that report, after full explanation of the points discussed, unanimously approved by the Conference.

As the Dean has, with great courtesy, given us in advance substantially the same strictures to be published in the Harvard Law Review for December, 1900, it was suggested by members of the Conference that I should state in reply the reasons why the Conference did not adopt the views of the Dean. Finding that the Harvard Law Review could not publish a reply until late in the winter and that the Yale Law Journal could do so in January, I have availed myself of the early opportunity afforded of publishing it in this journal.

It is with diffidence that I undertake to reply to legal criticisms from such a source and upon such a subject. The Dean of the Harvard Law School has so long been, not merely an expert, but an authority, on this subject, that I would not rashly volunteer to attack his positions. But sometimes the point of view is quite as important as extensive knowledge, and I am constrained to believe that so keen a controversialist is somewhat affected by that "gaudium certaminis" which the most open-minded advocate cannot wholly resist. Then too, if it is a question of experts, nearly all of them disagree with the Dean, on the main points at issue, as I shall try to show. If it is a question largely of prac

1 Reprinted, by permission, from 10 Yale Law Journal 84.

tice and experience as a trier of cases, Professor Ames has none —while, on the other hand, on all questions of custom and convenience the practical knowledge of the hundred lawyers, and more, who framed the Negotiable Instruments Law, and the hundred bankers who adopted it, would seem to quite offset the mere conclusions of erudition.

One who, like Professor Ames, can approach the consideration of a legal subject from the purely academic point of view, unembarrassed by any preconceptions derived from practice at the bar, has a certain advantage in that the matter may present itself to his view in scientific arrangement and symmetry from the first. Yet, on the other hand, the want of just that every-day familiarity with commercial affairs and business men, which every lawyer in considerable practice necessarily acquires, sometimes unfits the mere scholar or book lawyer to see things as others see them, and may make him give undue weight to what is really of little or no importance. Accustomed to deal only with theoretical questions and to measure law by ideal standards, such a man may demand a fulness of expression which amounts to prolixity, and discern obscurities where to the ordinary lawyer or merchant everything would seem plain and simple.

But such questions are not settled by the "Rule of Thumb," or a majority vote, and the Negotiable Instruments Act must stand on its own merits. It is a great good fortune to all concerned to have it tested by so great an expert.

Now as to the tests.

It is my purpose to devote this paper to answering the specific objections submitted in the Dean's article, grouping them as far as possible for the sake of brevity.

As five of the more important strictures are equally strictures of the English Act, which has been the Law of England since 1880, the language being the same in both acts, the five can conveniently be considered together.

They are criticisms of sections 3-2, 9-5, 9-3, 29, 70. These sections in the Negotiable Instruments Law contain the following propositions:

(a) That a promise is not rendered conditional by "a statement of the transaction which gives rise to the instrument." (b) That an instrument is payable to bearer though it is “payable to the order of a fictitious person" or payable to bearer; (c) "Where the only or last indorsement is in blank."