The most frequent examples of negotiable instruments are bills Qualities of of exchange and promissory notes. Their exceptional qualities instru negotiable are concisely stated in the recent case of Crouch v. Crédit Foncier ments. Limiting of England (a) which has been already referred to:rules in Crouch . "Bills of exchange and promissory notes, whether payable to order Crédit or to bearer, are by the law merchant negotiable in both senses of the Foncier. word. The person who, by a genuine indorsement, or, where it is payable to bearer, by a delivery, becomes holder, may sue in his own name on the contract, and if he is a bona fide holder for value he has a good title notwithstanding any defect of title in the party (whether indorser or deliverer) from whom he took it." We may here notice the positions contained in the judgment of the Court, which in fact show the limits beyond which the special law of negotiable instruments cannot be extended. 1. It is extremely doubtful whether the seal of a corporation can be treated as equivalent to signature for the purpose of making an instrument under it negotiable at common law (b). (It must 2. A bond containing a contract not merely to pay the principal but to cause the bonds to be drawn for payment in a specified manner cannot be negotiable, since it violates the general rule that the contract to pay must be unconditional. also be a contract to pay money or to deliver another negotiable security representing money (c): therefore a promise in writing to deliver 1000 tons of iron to the bearer is not negotiable and gives no right of action to the possessor: Dixon v. Bovill, 3 Macq. 1, and see Byles on Bills, Ch. 7.) 3. Mere private agreement or particular custom cannot be admitted as part of the law merchant so as to introduce new kinds of negotiable instruments. But the fact that a universal mercantile usage is modern is no reason against its being judicially (a) L. R. 8 Q. B. 374. (b) But if a corporation is expressly enabled by statute to issue promissory notes under seal they may be sued on as ordinary promissory notes: Stark v. Highgate Archway Co. 5 Taunt. 792, and in any case the addition of the seal will not prevent an instrument from being a good bill or note if it is also signed by an agent or agents for the company so that it would be good without the seal, which may perhaps be regarded as an ear-mark (c) Goodwin v. Robarts, Ex. Ch. How instruments may cease to be nego tiable. . recognized as part of the law merchant. The notion that general usage is insufficient merely because it is not ancient is founded on the erroneous assumption that the law merchant is to be treated as fixed and invariable (a). The bonds of foreign governments issued abroad and treated in the English market as negotiable instruments are recognized as such by law (b). So is the provisional scrip issued in England by the agent of a foreign government as preparatory to giving definitive bonds (e). It is also to be observed that an instrument which has been negotiable may cease to be so in various ways, namely— Payment by the person ultimately liable (d). Restrictive indorsement (e). To a certain extent, in the case of bills payable to order, indorsement when overdue, which makes the indorsee's rights subject to what are called equities attaching to the bill itself, e.g. an agreement between the original parties to the bill that in certain events the acceptor shall not be held liable, but not to collateral equities such as set-off (ƒ). It has here been our business only to note in a very general way how the law of negotiable instruments oversteps the ordinary law of contract, and within what limits it is applied. It seems therefore unadvisable to enter further upon the special characteristics of the contracts involved in such instruments; but it may not be useless to annex references to some modern cases in which the nature of the contracts undertaken in a bill of exchange by the drawer, acceptor, and indorsers respectively, has been judicially defined or discussed (g): the bill of exchange being that type of negotiable instrument which is most frequent, most important, and most fully developed. (a) Goodwin v. Robarts, supra, overruling Crouch v. Crédit Foncier on this point. (b) Gorgier v. Mieville, 3 B. & C. 45. (c) Goodwin v. Robarts, L. R. 10 Ex. 76, affd. in Ex. Ch. July 7, 1875. As to the possibility of suing on a bill after it has been paid by some other person, see Cook v. Lister, 13 C. B. N. S. 594, 32 L. J. C. P 121. (d) Lazarus v. Cowie, 3 Q. B. 464. (e) 1 Sm. L. C. 479. (f) See Ex parte Swan, 6 Eq. 344, 359, where the authorities are discussed. (g) As to contracts of acceptor and drawer see Jones v. Broadhurst, 9 C. B. 173, 181, Lebel v. Tucker, L. R. 3 Q. B. 77, 84. As to the contract of an indorser, ib. at p. 83, Denton v. Peters, L. R. 5 Q. B. 475, 477. contracts where We have purposely left to the last the consideration of certain Transfer of important classes of contracts which may be roughly described as involving the transfer of duties as well as of rights. This duties as happens in the cases (A) Of transferable shares in partnerships and companies. (B) Of obligations (a) attached to ownership or interests in property. well as rights ferred. Shares in ferable A. The contract of partnership generally involves personal (A.) Partconfidence, and is therefore of a strictly personal character. But, nes as Mr. Justice Lindley tells us, "if partners choose to agree that ordinary any of them shall be at liberty to introduce any other person partnerships and into the partnership, there is no reason why they should not; nor unincorwhy, having so agreed, they should not be bound by the agree- porated companies ment" (b). At common law the number of persons engaged in may be a contract of partnership does not make any difference in the made transnature or validity of the contract; hence it follows that if in a at common partnership of two or three the share of a partner may be transferred on terms agreed on by the original partners, there is nothing at common law to prevent the same arrangement from being made in the case of a larger partnership, however numerous the members may be; in other words, unincorporated companies with transferable shares are not unlawful at common law. This is worked out by Mr. Justice Lindley in another part of his book, where he shows by an ingenious and convincing analysis that such a conclusion is demanded by principle, and by an examination of decided cases that it is consistent with authority (c). "Those who form such partnerships, [i. e. partnerships whether small or large in which shares are transferable] and those who join them after they are formed, assent to become partners with any one who is willing to comply with certain conditions" (d). tract and At first sight this may seem to involve the anomaly of a But no unfloating contract between all the members of the partnership for certain conthe time being, who by the nature of the case are unascertained no real persons when we look to any future time (e). It is somewhat anomaly (a) We use the word here in its wide sense SO as to denote the benefit or burden of a contract, or both, according to the nature of the case. (b) Lindley, 1. 719. (c) Lindley, 1. 196-201. (e) Cp. per Abbott, C. J. in Р in this. Practical of unincor would re curious that this line of objection does not appear to have been Notwithstanding the theoretical legality of unincorporated difficulties companies, there does not appear to be any very satisfactory porated way of enforcing either the claims of the company against an companies individual member (1), or those of an individual member against main, even the company (e). But the power of forming such companies is apart from so much cut short by the Companies Act 1862, which renders compulsory pro- (with a few exceptions) unincorporated and unprivileged (7) Companies Partnerships of more than twenty (e) persons positively illegal, that questions of this kind are not likely to have much practical importance in future. In like manner the transfer of shares in visions of Act. (a) Webb v. Whiffin, L. R. 5 H. L. 711, 727. (6) We have seen (supra, p. 194) that they cannot empower an officer to sue on behalf of the association. (c) See Lyon v. Haynes, 5 M. & Gr. 504, Lindley 2. 929. (d) i.e. such as but for the Act would have been mere partnerships at common law. (e) Ten in the case of banking: Companies Act 1862, s. 4, see Lindley, 1. 170, 203; as to transfer of shares, ib. 721-727; as to termination of shareholders' liability, ib. 476-481. companies as well as their original formation is almost entirely governed by modern statutes. tions B. Obligations ex contractu attached to ownership or interests Obliga in property are of several kinds. With regard to those attached attached to to estates and interests in land, which alone offer any great property. matter for observation, the discussion of them in detail is usually and conveniently treated as belonging to the law of real property. We shall have to dwell on them however so far as to point out the existence of a real conflict between common law and equity as to the right way of dealing with burdens imposed on the use of land by contract. A general statement in a summary form will serve both to shorten our subsequent remarks and to make them better understood. OBLIGATIONS ATTACHED TO OWNERSHIP AND INTERESTS IN I. Goods. PROPERTY. A contract cannot be annexed to goods so as to follow the property in the goods either at C. L. (a) or in Equity (b). General view thereof. By statute 18 & 19 Vict. c. 111 the indorsement of a bill of lading operates as a legal transfer of the contract, if and whenever by the law merchant it operates as a transfer of the property in the goods. II. Land (c). a. Relations between landlord and tenant on a demise. Burden: of lessee's covenants of lessor's covenants (a) 3rd resolution in Spencer's ca. 1 Sm. L. C. Splidt v. Bowles, 10 East 279. Leake on Contracts, 624. (b) De Mattos v. Gibson, 4 De G. & J. 276, 295. (c) On this generally see Dart V. & P. 2. 699; 3d Report of R. P. Commission, Dav. Conv. 1. 122 (4th ed.); and above all the notes As to an existing thing parcel of the demise, assignees are bound whether named or not. As to something to be newly made on the premises, assignees are bound only if named (d). runs with the reversion (32 Hen. 8. c. 34.) to Spencer's ca. in 1 Sm. L. C.: and (d) This distinction, made in |