part of, the common law. The law merchant grew out of the necessity and convenience of business, and, although different from the general rules of the common law, it was ingrafted into, and became a part of, it." The usage adopted by the courts is the origin of all of the so-called law merchant as to negotiable securities,10 but the law merchant is not fixed and stereotyped but is expanded and enlarged to meet the requirements of trade.11 It is frequently arbitrary and not deducible from logical considerations.12 ![[ocr errors]](https://books.google.co.kr/books/content?id=8308AAAAIAAJ&hl=ko&output=html_text&pg=PA33&img=1&zoom=3&q=%22or+both,+according+to+its+tenor,+and+that+if+it+be+dishonored+and+the+necessary+proceedings+on+dishonor+be+duly%22&cds=1&sig=ACfU3U1a5v8Jho3seMeDRCbRoND7jfYFcg&edge=0&edge=stretch&ci=332,254,6,8){kind=small} 13 The Negotiable Instruments Law, where it has been enacted, takes the place of the law merchant,1 but in cases not provided for therein the law merchant is expressly made applicable.14 [3] B. Commercial Paper. The term "commercial paper" is broader than the scope of this article because it is sometimes used as including instruments other than bills, checks, and notes. It fining the term it was said to be a system of law, which does not rest essentially on the positive institutions and local customs of any particular country, but [consists] of certain principles of equity and usages of trade, which general convenience and a common sense of justice [have] established to regulate the dealings of merchants and mariners in all the commercial countries of the civilized world). is defined as "bills of exchange, promissory notes, bank checks, and other negotiable instruments for the payment of money which, by their form and on their face, purport to be such instruments as are by the law merchant recognized as falling under the designation of commercial paper.' 97 15 [4] C. Bills of Exchange-1. In General. The Negotiable Instruments Law expressly provides that a bill of exchange is an unconditional order. in 1 writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money, to order or to bearer.16 This definition, in almost the same words, is contained in the Canadian Bills of Exchange Act. Both were evidently copied from the Bills of Exchange Act of England.17 This statutory definition is merely declaratory of the former law.18 As the term is generally used in the books Mo. 583; Allen v. Leavens, 26 Or. 164, 37 P 488, 46 AmSR 613, 26 LRA 620; Vaughn v. Farmers', etc., Nat. Bank, 59 Tex. Civ. A. 380, 126 SW 690; McDougall v. McLean, 1 Terr. L. 450. more nor less than the usages of merchants and traders in the different departments of trade, ratified by the decisions of Courts of law, which, upon such usages being proved before them, have adopted them as settled law with a view to the interests of trade and the public convenience, the Court proceeding herein on the well-known principle of law that, with reference to transactions in the different departments of trade, Courts 8. Woodbury v. Roberts, 59 Iowa of law, in giving effect to the con348, 349, 13 NW 312, 44 AmR 685; tracts and dealings of the parties, Pomeroy First Nat. Bank v. McCul- will assume that the latter have lough, 50 Or. 508, 513, 93 P 366, 126 dealt with one another on the footAmSR 758, 17 LRANS 1105 [cit Cyc]. ing of any custom or usage prevailAnd see Common Law [8 Cyc 3721. ing generally in the particular deSee also 1 Blackstone Comm. 75 partment. By this process, what be(where it is said: "A particular sys-fore was usage only, unsanctioned by tem of customs used only among one legal decision, has become engrafted set of the king's subjects which, upon, or incorporated into, the comhowever different from the general mon law, and may thus be said to rules of the common law, is yet in- form part of it"). grafted into it, and made a part of it: being allowed, for the benefit of trade, to be of the utmost validity in all commercial transactions"). ... "Bills of exchange are commercial paper, that is to say, they, by international law, are governed by the law-merchant, the lex mercatoria being in fact a part of the law of nations. 1 Black Comm. 273; 4 id. 67. The law of nations, including the lex mercatoria, is a part of the English law. Id. The English common law is a part of the law of Indiana. 1 R. S. by G. & H. p. 415. Whatever paper, then, is governed by the lawmerchant under the English common law, is governed by the law-merchant in Indiana, independent and in the absence of any special statute on the subject." Bartholomew County V. Bright. 18 Ind. 93. 95. 9. Irwin v. Marquett, 26 Ind. A. 383, 59 NE 38, 84 AmSR 297. 10. Goodwin v. Robarts, L. R. 10 Exch. 337 [aff 1 App. Cas. 476, 5 ERC 199]. 11. Goodwin v. Robarts, L. R. 10 Exch. 337, 346 [aff 1 App. Cas. 476, 5 ERC 199] (where Cockburn, C. J., said: "It is founded on the view that the law merchant thus referred to is fixed and stereotyped, and incapable of being expanded and enlarged so as to meet the wants and requirements of trade in the varying circumstances of commerce. It is true that the law merchant is sometimes spoken of as a fixed body of law, forming part of the common law, and as it were coeval with it. But as a matter of legal history, this view is altogether incorrect. The law merchant thus spoken of with reference to bills of exchange and other negotiable securities, though forming part of the general body of the lex mercatoria, is of comparatively recent origin. It is neither [8 C. J.-3] "The law of commercial paper, like all other substantive law, is the creature of growth. Founded on the custom and usages of merchants, it is the combined result of reason and experience slowly modified by the necessities and changes in commercial affairs." Holliday State Bank v. Hoffman, 85 Kan. 71, 77, 116 P 239, 35 LRANS 390, AnnCas1912D 1. 12. Farmers' Nat. Bank v. Sutton Mfg. Co., 52 Fed. 191, 3 CCA 1, 17 LRA 595. 13. See infra §§ 35-49. 15. Black L. D. [quot Newport Bank v. Cook, 60 Ark. 288, 296, 30 SW 35, 46 AmSR 171, 29 LRA 7611; In re Hercules Mut. L. Assur. Soc., 12 F. Cas. No. 6,402, 6 Ben. 35, 38. 16. Clayton Townsite Co. v. Clayton Drug Co., 20 N. M. 185, 147 P 460, 461; Amsinck v. Rogers, 189 N. Y. 252, 265, 82 NE 134, 121 AmSR 858, 12 LRANS 875, 12 AnnCas 450; State v. Garland, 65 Wash, 666, 672, 118 P 907; Frederick v. Spokane Grain Co., 47 Wash. 85, 87, 91 P 570; Columbian Banking Co. v. Bowen, 134 Wis. 218, 222, 114 NW 451; Westberg v. Chicago Lumber, etc., Co., 117 Wis. 589, 595, 94 NW 572. [a] Illustration.—A draft addressed by a firm doing business in New York to a firm doing business in Austria, requiring the drawee to pay on demand a specified sum to the order of the drawers and to charge the same to a cargo shipped to the foreign firm by a specified steamship is a bill of exchange within the definition in the Negotiable Instruments Law. Amsinck v. Rogers, 189 N. Y. 252, 82 NE 134, 121 AmSR 858, 12 LRANS 875, 12 AnnCas 450 [aff 103 App. Div. 428, 93 NYS 87]. 17. McLean v. Clyesdale Banking Co., 9 App. Cas. 95. 18. See Janney v. State Bank, 12 [a] Other definitions.—(1) "An order by which one person draws on another for a certain sum of money." Worcester D. [quot State v. Warner, 60 Kan. 94, 96, 55 P 342]. (2) "An open letter by one person to a second, directing him in effect to pay absolutely, and at all events, a certain sum of money, therein named, to a third person, or to any other to whom that third person may order to be paid; or it may be payable to bearer, or to the drawer himself." Daniel Neg. Instr. § 27 [quot Culbertson v. Nelson, 93 Iowa 187, 191, 61 NW 854, 57 AmSR 266, 27 LRA 222]. (3) "An unconditional written order from A. to B. directing B. to pay C. a certain sum of money therein named." Byles Bills 1. (4) "An order drawn by one person on another to pay a third a certain sum of money, absolutely and at all events." Munger v. Shannon, 61 N. Y. 251, 255 [quot Hibbs v. Brown, 190 N. Y. 167, 174, 82 NE 1108; Schmittler v. Simon, 101 N. Y. 554, 560, 5 NE 452, 54 AmR 737]. (5) "An order or request by one to another to pay a specified sum of money to a person." Newman v. Frost, 52 N. Y. 422, 425. (6) "An order in writing, drawn by one party on another, requesting the latter to pay a certain sum of money to a third party, at all events; depending upon no contingency, and payable out of no particular fund." Hoyt V. Lynch, 4 N. Y. Super. 328, 332. "An order drawn by one person, upon another, in favor of a third person, for a specific amount." FairclothByrd Mercantile Co. v. Adkinson, 167 Ala. 344, 346, 52 S 419. (8) "A written order or request by one person to another for the payment of a specified sum of money to a third person absolutely." Vaughn v. Farmers', etc., Nat. Bank, 59 Tex. Civ. A. 380, 382, 126 SW 690. (9) “A written order or request by one person to another, for the payment, absolutely and at all events, of a specified sum of money to a third person." Luff v. Pope, 5 Hill (N. Y.) 413, 416 [aff 7 Hill 577]. (10) "An order drawn by one man on another requesting him to pay a sum of money to a third." Pratt v. Thomas, 21 S. C. L. 654, 656. (11) "An open letter of request by one person to another to pay money," Rice v. Ragland, 10 Humphr. (Tenn.) 545, 550, 53 AmD 737. (12) "An open letter of request from one person to another, desiring him to pay, on his account, a sum of money therein mentioned, to a third person." Chittenden v. Hurlburt, 2 Aik. (Vt.) 133, 135. (13) "Instruments purporting a (7) it includes drafts,1 19 orders,20 ,20 and checks.21 Moreover the Negotiable Instruments Law especially defines a check as a "bill of exchange" drawn on a bank and payable on demand.22 However, an or der' has been defined as an informal bill of exchange on paper which requires one person to pay or to deliver to another goods on account of the maker, to a third party;23 and it is held that the legal definition of an order does not ordinarily mean a cash draft.24 29 fect.20 Thus, an instrument is a bill, although it uses the words "please pay'' 27 or the like,28 or although it is a request to pay the drawer's note written under the note and accepted by the drawee,2 or a request to pay for goods, written under the bill.30 The drawee need not be a banker,31 and may even be the drawer himself.32 So the drawer may be the payee, or the drawee and payee,33 and the bill may be payable at the place where it is drawn.34 So an indorsement on a certificate of deposit,35 on a certificate of indebtedness,36 on a nonnegotiable or negotiable 38 note, or on a bond,a is in effect a bill. On the other hand, instruments not containing the necessary elements of a bill will not be considered as such.10 An order is not a 37 from their wages for the payment of] the holder of the orders as mine physician were bills of exchange); Frederick v. Spokane Grain Co., 47 Wash. 85, 91 P 570. Compare Buttrick Lumber Co. v. Collins, 202 Mass. 413, 418, 89 NE 138 (where the court said: "The order and its acceptance, while improperly declared on as an inland bill of exchange, has been treated throughout by the parties and the trial judge as the written promise of the defendant to pay the amount named to the plaintiff from the final payment due to the drawer under a building contract in process of performance"). [5] 2. Form. In its simplest form a bill of exchange names precisely the time and place of payment as well as the amount and the parties to it.25 Informal instruments, however, are often construed to be bills of exchange and are so in efrequest, or order, from one person to another, to pay a certain sum of money. to a third person therein named, or his order." Dunlop v. Harris, 5 Call (9 Va.) 16, 28. (14) "An open letter of request from one man to another, desiring him to pay a sum named therein to a third person on his account." 2 Blackstone Comm. 466 [quot Henderson v. Pope, 39 Ga. 361, 363]. (15) "An open letter of request from, and order by, one person on another, to pay a sum of money therein mentioned to a third person.' Bouvier L. D. [quot Biesenthall v. Williams, 1 Duv. (Ky.) 329, 333, 85 AmD 629; Hinnemann v. Rosenback, 39 N. Y. 98, 100]. (16) "A draft' as defined by Bouvier, is an order for the payment of money, drawn by one person on another.' Prehm v. State. 22 Nebr. 673, 676, 36 NW 295. (17) "A written order or request by one person to another for the payment of money absolutely and at all events." 3 Kent Comm. 74 [quot Adams v. Boyd, 33 Ark. 33, 47; Henderson v. Pope, 39 Ga. 361, 363; Ivory v. State Bank, 36 Mo. 475, 478, 88 AmD 150]: Gaar v. Louisville Banking Co., 11 Bush (Ky.) 180, 186, 21 AmR 209. (18) "A written order for the payment of a certain sum of money unconditionally." Smith Merc. L. 362 [quot Adams v. Boyd, 33 Ark. 33, 47]. (19) "An open letter of request addressed by one person to a second, desiring him to pay a sum of money to a third, or to any other to whom that third person shall order it to be paid, or it may be payable to bearer." Story Bills of Exch. [quot Ivory v. State Bank, 36 Mo. 475, 478, 88 AmD 150]. (20) "An instrument, negotiable in form, by which one, who is called the drawer, requests another, called the drawee, to pay a specified sum of money." Cal. Civ. Code § 3171. [b] Distinguished from "bill obligatory."-"Bills of exchange and bills obligatory are very different things. Each have their particular privileges or advantages, but there is no privilege or advantage which is common to both." Farmers', etc., Bank v. Greiner, 2 Serg. & R. (Pa.) 114, 115. As equitable assignment see Assignments §§ 81-87. 19. Woodall v. People's Nat. Bank, 153 Ala. 576, 45 S 194; Hinnemann v. Rosenback, 39 N. Y. 98, 101; Cole v. Dalton, 6 Daly (N. Y.) 484 (where it is held that there is no important distinction between the terms "draft" and "bill of exchange." except that "draft" is more particularly used for an inland bill); Union Nat. Bank v. Rowan, 23 S. C. 339, 55 AmR 26. See also infra § 19. 20. Windsor Cement Co. v. Thompson, 86 Conn. 511, 86 A 1 (need not be payable to order or bearer); Hunter v. Simrall, 5 Litt. (Ky.) 62; Sheets v. Coast Coal Co., 74 Wash. 327, 133 P 433 (holding that orders by employees on their employers, authorizing a deduction of one dollar a month [a] An order by a subcontractor on the contractor, payable to a materialman, to be charged to the account of the subcontractor, is a nonnegotiable bill of exchange. Windsor Cement Co. v. Thompson, 86 Conn. 511, 86 A 1. 21. Cal.-Du Brutz v. Visalia Bank, 4 Cal. A. 201, 87 P 467, 469. Kan.-State v. Warner, 60 Kan. 94, 55 P 342 (“draft" including check). La. Hewitt v. Goodrich, 10 La. Ann. 340 (holding that checks, like bills, are negotiable instruments, requiring, as essentials, a drawer, a drawee, and a payee). N. Y.-Douglass v. Wend. (N. Y.) 637. Wilkeson, Oh. Morrison v. Bailey, 5. Oh. St. 13, 64 AmD 632. Eng-McLean v. Clydesdale Banking Co., 9 App. Cas. 95. See also infra §§ 12-18. [a] Demand bills of exchange are much in the nature of bank checks, and are intended to be paid without any delay, having in view the reasonable convenience of the holders. Angaletos v. Meridian Nat. Bank, 4 Ind. A. 573, 31 NE 368. 22. Van Buskirk v. Rocky Ford State Bank, 35 Colo. 142, 83 P 778, 117 AmSR 182. 23. Bouvier L. D. [quot Hinnemann v. Rosenback, 39 N. Y. 98, 100]. 24. Hinnemann v. Rosenback, 39 N. Y. 98. 25. McPherson v. Johnston, 3 B. C. 465. [a] Form of bill.-"New York, Jan. 2, 1902. Three months after date pay to A B or order five hundred dollars. Value Received. Payable at Charing Cross Bank, London. To Messrs. C. C. London N. H." 26. Biesenthall v. Williams, 1 Duv. (Ky.) 329, 333, 85 AmD 629 (where the following writing was held to be a bill: "Thomas Williams, Esq. Please let the bearer have $50.00. I will arrange it with you this noon. Yours, most obedient, S. R. Biesenthall"); McDougall v. McLean, 1 Terr. L. 450. See also infra §§ 208-210. [a] A statement of account with an order on the debtor. "Please pay Flanner & Miller the above bill, and oblige." and signed by the creditor, is a bill of exchange. Knefel v. Flanner, 66 Ill. A. 209, 211 [aff 166 Ill. 147, 46 NE 762]. 39 27. Whatley v. Strobe, 12 Cal. 92, 73 AmD 522; Jarvis v. Wilson, 46 Conn. 90, 33 AmR 18 ("Please pay and charge the same to me"); McDougall v. McLean, 1 Terr. L. 450. See also infra §§ 208-210. 28. Regina v. Tuke, 17 U. C. Q. B. 296. 29. Leonard v. Mason, 1 Wend. (N. Y.) 522. 30. O'Donnell v. Smith, 2 E. D. Smith (N. Y.) 124. 31. Champion v. Gordon, 70 Pa. 474, 10 AmR 681. 32. See infra § 309. [a] Illustration.-An order drawn on another to pay a sum certain to the order of the drawer and to charge the same to the drawer's account is a bill of exchange. Woodall v. People's Nat. Bank, 153 Ala. 576, 45 S 194. 33. See infra § 299. 34. Southern Bank v. Brashears, 1 Disn. 207, 12 Oh. Dec. (Reprint) 578. 35. Kilgore v. Bulkley, 14 Conn. 362; State v. Garland, 65 Wash, 666, 118 P 907. 36. Bowes v. Industrial Bank, 58 Ill. A. 498. 37. Brenzer v. Wightman, 7 Watts & S. (Pa.) 264. 38. 39. 40. Irvin v. Maury, 1 Mo.' 194. 133. [a] Illustrations.-(1) An order to A to pay the writer's note to B is not a bill. Cook v. Satterlee, 6 Cow. (N. Y.) 108, 16 AmD 432. (2) Nor is a letter to A requesting him to pay such note (Gillilan v. Myers, 31 Ill. 525), (3) a letter to A requesting him to make a payment to B (Woolley v. Sergeant, 8 N. J. L. 262, 14 AmD 419), (4) an order by a partnership on its clerk to pay bearer on his presenting certain tickets (Dillahunty v. Parry, 1 Stew. (Ala.) 251), (5) a receipt for wool, payable in six months, at a bank (Martin v. Butler, Wright (Oh.) 553), (6) a receipt for coal "for which I promise to pay three hundred and sixty-five dollars and seventy-four cents" (Smith v. Cromer, 66 Miss. 157, 5 S 619), (7) or a receipt for a note to be collected (Runnels v. Spencer, Walk. (Miss.) 362; Eason v. Dickson, 24 N. C. 243). (8) A writing signed by a contractor, directing the qwner to pay to another a certain sum and to deduct it from any amount due him on final payment, was improperly treated as a bill. Buttrick Lumber Co. v. Collins, 202 Mass. 413, 89 NE 138. [b] A voucher (1) draft containing a statement of indebtedness, a form of receipt, and stating that, when properly receipted, the voucher would become a draft on the debtor, payable through a certain bank and signed by the debtor, is not a "bill of exchange," as defined by the statute; but it was within the power of the debtor to make it such, when properly accepted and receipted by the payee. Val Blatz Brewing Co. v. Inter-State Ice, etc., Co., 161 Mo. A. 531, 143 SW 542. (2) A warrant is ![[blocks in formation]](https://books.google.co.kr/books/content?id=8308AAAAIAAJ&hl=ko&output=html_text&pg=PA35&img=1&zoom=3&q=%22or+both,+according+to+its+tenor,+and+that+if+it+be+dishonored+and+the+necessary+proceedings+on+dishonor+be+duly%22&cds=1&sig=ACfU3U13koiF75htrAaSg17pZel49KJiZQ&edge=0&edge=stretch&ci=29,71,479,167) The acceptance of an order for assignment of money due, or to become due, does not change the character of the assignment so as to make it a bill of exchange.45 [6] 3. Analogy between Bills and Notes. Bills and notes are governed by the same rules with respect to the certainty required in their terms and their general elements, but, at its inception, a note differs from a bill in the parties thereto. Only the rights of the maker and the payee are involved in a promissory note. When, however, the payee transfers the note to an indorsee the similarity of the note to an accepted bill is perfected; it is then an order from the payee upon the maker for the payment of money to the indorsee; the indorser (payee) is the drawer, the maker of the note is the acceptor, and the indorsee is the payee. Remembering this analogy, decisions with regard to bills may be apsued by one department of a city on another department is not a bill of exchange nor a negotiable instrument, but is only a voucher. The apparent drawer and drawee are in reality the same person. Charlebois | Op. 706. v. Montreal, 15 Que. L. R. 96. 41. McPherson v. Johnston, 3 B. C. 465; Forward v. Thompson, 12 U. C. Q. B. 103. 42. Knowlton v. Cooley, 102 Mass. 233 (holding that an order of a workman to his employer to "Please pay to Hezekiah Cooley my wages as fast as they become due, to the amount of $150, accepted in writing by the employer, is not a bill of exchange or a money order). 43. National Park Bank v. Berggren, 110 L. T. Rep. N. S. 907. 44. Reg. v. Kinnear, 2 M. & Rob. 117. 45. 233. Knowlton v. Cooley, 102 Mass. 46. Heylyn v. Adamson, 2 Burr. 669, 97 Reprint 503, 4 ERC 445. See also Winnebago County State Bank v. Hustel, 119 Iowa 115, 83 NW 70; Bank of America v. Woodworth, 18 Johns. (N. Y.) 315. 47. See infra §§ 8-11. [a] In Alaska the distinctions between foreign and inland bills of exchange, as defined by the law merchant, are in no way changed by the code. Miller v. American Gold Min. Co., 3 Alaska 1. 48. See Amsinck v. Rogers, 189 N. Y. 252, 82 NE 134, 121 AmSR 858, 12 LRANS 875. [a] Illustration.—A check drawn in Texas, payable in that state and indorsed in Illinois, is a foreign bill of exchange. Sublette Exch. Bank v. Fitzgerald, 168 Ill. A. 240. [b] Special statute in bank charter. (1) In some of the states special statutes are contained in bank charters. Thus the provision of the charter of the bank of Kentucky, that all bills discounted by it shall be considered as foreign bills of exchange, applies, although all the parties to the bill are residents of the state. Battertons v. Porter, 2 Litt. (Ky.) 388; State Bank v. Brooking, 2 Litt. (Ky.) 41; Farmers', etc., Bank v. Turner, 2 Litt. (Ky.) 13. Such statutory provision was repealed by the Negotiable Instruments Law. (2) A bill drawn, made payable, and negotiated in a city in the state must plied mutatis mutandis to notes.46 The Negotiable Instruments Law applies to notes as well as to bills, except in so far as the statute refers solely to bills, including rules peculiarly applicable to bills, such as those relating to acceptance, presentment for acceptance, protest, payment for honor, etc. [7] 4. Kinds-a. In General. Bills are classified as foreign, or inland; and also as bills payable on demand or at sight, or bills payable at some fixed date.47 [8] b. Foreign Bills. The Negotiable Instruments Law expressly provides that an inland bill of exchange is a bill which is, or on its face purports to be, both drawn and payable within the state, and that any other bill is a foreign bill.48 Keeping in mind that it will be presumed that the drawee's address or residence is the place of payment, it follows that a bill drawn in one state. on a drawee in another state or country is a foreign bill.50 40 So, irrespective of statute, in distinguishing between inland and foreign bills, the states of the United States are regarded as foreign to one another,51 and a bill of exchange drawn in one state on a drawee residing in another state,52 or made payable in another state,53 is a foreign bill. So an indorsement of a note or the like is so far similar be treated as an inland bill, unless the act of negotiating it to a bank has the effect, under its charter, of placing it on the footing of a foreign bill. Sanders v. Merchants' Bank, 7 Ky. 49. See infra § 155. 50. Laddonia Bank v. Bright-Coy Comm. Co., 139 Mo. A. 110, 120 SW 648. [a] Illustration.-A bill of exchange drawn in a foreign country by a New York corporation directed to itself in New York, requiring itself to pay in New York, to the order of the drawee, a specified sum three days after sight, is a foreign bill of exchange, and not a simple order for the payment of money. Pavenstedt v. New York L. Ins. Co., 203 N. Y. 91, 96 NE 104, AnnCas1913A 805 [aff 113 App. Div. 866, 99 NYS 614]. 51. U. S. Bank v. Daniel, 12 Pet. (U. S.) 32, 9 L. ed. 989; Dickins v. Beal, 10 Pet. (U. S.) 572, 9 L. ed. 538; Buckner v. Finley, 2 Pet. (U. S.) 586, 7 L. ed. 528; Ocean Nat. Bank v. Williams, 192 Mass. 141; Commercial Bank v. Varnum, 49 N. Y. 269. 52. U. S.-Armstrong v. American Exch. Nat. Bank, 133 U. S. 433, 10 SCt 450, 33 L. ed. 747; Knickerbocker L. Ins. Co. v. Pendleton, 112 U. S. 696, 5 SCt 314, 28 L. ed. 866; Dickins v. Beal, 10 Pet. 572, 9 L. ed. 538; Buckner v. Finley, 2 Pet. 586, 7 L. ed. 528; Townsley v. Sumrall, 2 Pet. 170, 7 L. ed. 386; Lonsdale v. Brown, 15 F. Cas. No. 8,494, 4 Wash. 148. Ala.-Turner v. Patton, 49 Ala. 406; 101. La. Schneider v. Cochrane, 9 La. Ann. 235, 61 AmD 204; New Orleans City Bank v. Girard Bank, 10 La. 562. Me.-Warren v. Coombs, 20 Me. 139; Green v. Jackson, 15 Me. 136. Mass.-Phoenix Bank v. Hussey, 12 Pick. 483. Mo.-Linville v. Welch, 29 Mo. 203. N. H.-Carter v. Burley, 9 N. H. 558. N. Y.-Commercial Bank v. Varnum, 49 N. Y. 269; Halliday v. McDougall, 20 Wend. 81; Wells V. Whitehead, 15 Wend. 527. But see Miller v. Hackley, 5 Johns. 375, 4 AmD 372. Pa. Lennig v. Ralston, 23 Pa. 137 (holding that a bill drawn and dated in Pennsylvania with blanks to be filled by a partner in London, who negotiated it there, is a foreign bill). R. I.-Aborn v. Bosworth, 1 R. I. 401. S. C.-Cape Fear Bank v. Stinemetz, 19 S. C. L. 44. Tenn.-Gardner v. State Bank, 1 Swan 420. Va.-Brown v. Ferguson, 4 Leigh (31 Va.) 37, 24 AmD 707 (but not if payable where drawn). [a] Illustration.-An instrument, dated in Iowa, directing defendant to pay a specified sum one year after date, to be charged to the drawer's account, and accepted by defendant in Indiana, is a foreign bill of exchange and not a note. Johnson County Sav. Bank v. Kramer, 42 Ind. A. 548, 86 NE 84. [b] Presumption as to place of drawing.-If the bill does not designate the place where it was drawn, but the evidence and circumstances show that the drawer resided in Kentucky and the drawee in Ohio, the legal presumption is that it was drawn at the drawer's residence. Harmon v. Wilson, 1 Duv. (Ky.) 322. 53. Fla.-Joseph v. Salomon, 19 Fla. 623. Ill. Mason v. Dousay, 35 Ill. 424, 85 AmD 368 (holding that a bill of exchange drawn in Michigan in favor of a Michigan payee on a person residing and having his place of business in Illinois, and which was accepted in Illinois, is a foreign, and not an inland, bill, notwithstanding | 400. the drawee also had a place of business in Michigan where he spent a portion of his time). Ky.-Gray, Tie, etc., Co. v. Farmers' Bank, 109 Ky. 694, 60 SW 537, 22 KyL 1333; Harmon v. Wilson, 1 Duv. 222; Chenowith v. Chamberlin, 6 B. Mon. 60, 43 AmD 145 (especially if it is expressly payable in the drawee's state); Rice v. Hogan, 8 Dana 133. Ind. State Bank v. Hayes, 3 Ind. Ky.-Gray Tie, etc., Co. v. Farmers' Bank, 60 SW 537, 22 KyL 1333. Me.-Ticonic Bank v. Stackpole, 41 Me. 302; Warren v. Coombs, 20 Me. 139; Freeman's Bank v. Perkins, 18 Me. 292. N. H.-Grafton Bank v. Moore, 14 N. H. 142. N. Y. Halliday v. McDougall, 22 Wend. 264. 36 [8 C. J.] BILLS AND NOTES to a bill of exchange that, where executed in one state and made payable in another, it is in effect a foreign bill.54 In England, under the present statute,55 all bills are foreign except those which are drawn in the British Islands and drawn on a resident of the British Islands or payable there.50 [§ 9] c. Inland Bills. The Negotiable Instruments Law expressly provides that an inland bill of exchange is a bill which is, or on its face purports to be, both drawn and payable within the state; and that unless the contrary appears on the face of the bill the holder may treat it as an inland bill.57 The first clause merely reiterates the rule of the law merchant.58 So a bill is an inland one, although it is drawn in another state or addressed At comto a person in another state, if it is made expressly payable in the state where it is drawn.59 mon law inland bills included only bills that were drawn and payable in England and Wales and BerThese limits are now extended British Islands wick on Tweed. whole body of the to the but not to other realms of the pire.60 Okl.-Morrison v. British Em 199 the face of it purports to be, both drawn and payable within Canada, or drawn within Canada on person resident therein.1 some [10] d. Presumptions from Date. The place of drawing is in general indicated by the date of the bill;62 but a place of date will not be judicially recognized as foreign and must be proved to be such.63 [11] e. Importance of Distinction. The difference between foreign bills and inland bills is that foreign bills must be protested before a public notary before the drawer can be charged, but inland the bills need no protest,64 notice of dishonor being sufficient.65 So the damages recoverable from drawer for the failure of the drawee to accept or to the pay a bill, where duly presented for acceptance and payment, are different according to whether bill is a foreign or an inland one. [12] D. Checks-1. Definition-a. In General. A check is a draft or order on a bank or banking a deposit of house, purporting to be drawn on funds 7 for the payment, at all events, of a certain sum of money to a certain person therein named, It is personal propor to him or his order, or to bearer, and payable instantly on demand.68 In Canada an inland bill is a bill which is, or on Farmers', etc., in England on a Boston house was a foreign bill, although actually acceptBank, 9 Okl. 697, 60 P 273. Although all the parties re-ed by the drawee in England and [a] 6 Mass. 157. Bank v. State 57. side in the state where it was drawn, payable there. Grimshaw v. Bender, See statutory provisions. true. this is still 58. Young v. Bennett, 7 Bush (Ky.) And see Kaskaskia Bridge Co. Rodgers, 3 Ind. 53; Freeman's Bank v. Perkins, 18 Me. 292; Atwater v. v. Shannon, 6 Ill. 15. Streets, 1 Dougl. (Mich.) 455; Graf- 474. ton Bank v. Moore, 14 N. H. 142. [b] A bill drawn in Alaska and Miller v. made payable in Massachusetts is a foreign bill of exchange. American Gold Min. Co., 3 Alaska 1. v. Clary, 17 B. Mon. 54. Piner (Ky.) 645 (a certificate of deposit issued in one state and indorsed by the payee in another state); Ticonic Bank v. Stackpole, 41 Me. 302; Simpson v. White, 40 N. H. 540 (indorsement of a note which is payable in another state); Carter v. Burley, 9 N. H. 558 (indorsement of a note payable to a person residing in another state). But see Case v. Heffner, 10 Oh. 180 (where a bill was drawn in New York Ohio on a New York resident and afterward indorsed in Ohio to an resident, the latter, in suing his indorser in Ohio, was allowed to elect to treat it as an inland bill). 55. Bills Exch. Act § 4; 33 & 34 [a] Until a recent date (1) (1 & 2 56. Snaith v. Mingay, 1 M. & S. [a] If delivered in a foreign couna foreign bill, although try, it is blanks are left to be filled and are Barker v. Sterne, 9 filled in London. Exch. 684; Snaith v. Mingay, 1 M. & S. 87, 105 Reprint 33. [b] If drawn in England on another country (1) it is a foreign bill, if it is payable in the other country (Rothschild v. Currie, 1 Q. B. 43, 41 ECL 428, 113 Reprint 1045), (2) but it is an inland bill if drawn and payable in England, although drawn on another country (Amner v. Clark, 2 C. M. & R. 468, 150 Reprint 202). (3) Formerly, however, a bill drawn [a] In Indiana (1) a note executed Virginia formerly made the [a] The actual place of drawing Under Mississippi statute, if 62. But Strawbridge v. Robinson, 10 66 statutes (Steadman v. Duhamel, 1 C. 63. Riggin v. Collier, 6 Mo. 568; Hoxie, 5 Tex. 171; Cook v. Crawford, Yale v. Ward, 30 Tex. 17; Andrews v. 4 Tex. 420. 64. Lord Holt in Buller v. Crips, 6 Mod. 29, 87 Reprint 793. [a] Distinction not abolished by viding that the remedy on bills of exchange, foreign and inland, and on statute.-In Alabama the statute propromissory notes payable in bank, shall be governed by the rules of the law merchant as to days of grace, any distinction recognized by the law protest, and notice, does not destroy merchant between foreign and inland bills and promissory notes, but its 247. intention is that the law merchant as applicable to each class shall prevail. Quigley v. Primrose, 8 Port. (Ala.) 65. Scrutton Merc. L. 30. See also infra § 868. 66. Pavenstedt v. New York L. Ins. 67. Camas Prairie State Bank v. same 68. U. S.-Rogers v. Durant, 140 U. Bowen v. Needles Nat. Bank, 87 Fed. S. 298, 301, 11 SCt 754, 35 L. ed. 481; 430, 437 [aff 94 Fed. 925, 36 CCA 5531. Ga.-Byrd Printing Co. v. Whitaker Paper Co., 135 Ga. 865, 868, 70 SE v. Johnson, 134 Ga. 486, 490, 68 SE 85, 137 AmSR 242, 30 LRANS 697. 798, AnnCas1912A 182; Farmers' Bank Ill-Ridgely Nat. Bank v. Patton, 109 III. 479, 484. Kan.-Noble v. Doughten, 72 Kan. 336, 343, 83 P 1048, 3 LRANS 1167 Mo.-State v. Murphy, 141 Mo. 267, Nebr.-Connor v. Becker, 56 Nebr. [cit Cyc]; State v. Warner, 60 Kan. 94, 96, 55 P 342. 269, 42 SW 936. Oh.-Cincinnati Oyster, etc.. Co. v. 343, 345, 76 NW 893. 106, 109, 36 NE 833. National Lafayette Bank, 21 Oh. St. For later cases, developments and changes in the law see cumulative Annotations, same title, page and note number, erty.69 The Negotiable Instruments Law expressly provides that a check is a bill of exchange drawn on a bank payable on demand and that except as otherwise provided (provisions as to time for presentment, certification of checks, and effect as assignment of funds), the provisions of the act applicable to a bill of exchange payable on demand apply to a check.TO This definition does not change the common-law definition, except perhaps in so far as it Tex.-Farmersville First Nat. Bank v. Greenville Nat. Bank, 84 Tex. 40, 43, 19 SW 334. Wash.-State v. Garland, 65 Wash. 666, 672, 118 P 907. Wyo.-Brown v. Cow Creek Sheep Co., 21 Wyo. 1, 17, 126 P 886. Ont.-Agricultural Sav., etc., Assoc. v. Federal Bank, 6 Ont. A. 192, 197 (where the court said: "A cheque is generally defined to be a draft on a banker payable to bearer on demand, and although no doubt an instrument of the same kind payable to order is perfectly valid, there being nothing in point of law to prevent a cheque being drawn to order, practically all cheques were payable to bearer in England before the passing of the 16 & 17 Vic. ch. 59"). ![[ocr errors]](https://books.google.co.kr/books/content?id=8308AAAAIAAJ&hl=ko&output=html_text&pg=PA37&img=1&zoom=3&q=%22or+both,+according+to+its+tenor,+and+that+if+it+be+dishonored+and+the+necessary+proceedings+on+dishonor+be+duly%22&cds=1&sig=ACfU3U1fhIneGgb42g-nJsOctUYqCoJqUQ&edge=0&edge=stretch&ci=337,333,4,14){kind=small} confines checks to instruments "payable on demand.' 9971 " [e] A sight bill drawn on a bank and concluding with a request to charge to the drawer's account is said to be a bill and not a check. Pope v. Albion Bank, 57 N. Y. 126 [rev 59 Barb. 226]; Olshausen v. Lewis, 18 F. Cas. No. 10,507, 1 Biss. 419. a [f] Effect of words "to be retained."-Defendant gave a check to plaintiffs on a blank form check and wrote on the face of it the words "To be retained," promising to send check on one of his bankers' printed forms in substitution for it. This he failed to do, and the check was dishonored. It was held, in an action on the check, that as defendant had not fulfilled his promise plaintiffs were at liberty to use the check as an ordinary check and were therefore entitled to recover. Robert v. Marsh, 30 T. L. R. 14. [§ 13] b. As Including Draft Drawn by Bank. The phrase "banker's check" has no place in legal or financial terminology, it has been suggested; but the popular significance of the term is a check drawn by a banker, as distinguished from a bank check which may be drawn on the bank by anybody.72 A check includes a draft drawn by a bank on another bank,73 even though the drawee bank | ten order or request addressed to per- v. Bowes, 165 Ill. 70, 73, 48 NE 10, sons carrying on the business of 56 AmSR 228 [rev 64 Ill. A. 300]. bankers, drawn on them by a party having money in their hands, requesting them to pay, on presentment to a person therein named, or to bearer, a specified sum of money.' Chitty Bills 322 [quot Douglass v. Wilkeson, 6 Wend. (N. Y.) 637, 643]. (13) "A written order of a depositor to his bank to make a certain payment." Morse Banking § 398 [quot Framell v. Farmers' Nat. Bank, 11 KyL 900, 901; Carroll Exch. Bank v. Carrollton First Nat. Bank, 58 Mo. A. 17, 26]. (14) "A brief draft or order on a bank or banking house, directing it to pay a certain sum of money." 2 Parsons Notes & B. [quot Rogers v. Durant, 140 U. S. 298, 391, 11 SCt 754, 35 L. ed. 481; Ridgely Nat. Bank v. Patton, 109 Ill. 479, 484; Connor v. Becker, 56 Nebr. 343, 345, 76 NW 893]. (15) “A written order or request, addressed to a bank or to persons carrying on the business of bankers, by a party having money in their hands, requesting them to pay on presentment, to another person, or to him or bearer, or to him or order, a certain sum of money specified in the instrument." Story Prom. N. 487 [quot Rogers v. Durant, 140 U. S. 298, 301, 11 SCt 754, 35 L. ed. 481; Connor v. Becker, 56 Nebr. 343, 345, 76 NW 893]. (16) "An unconditional order in writing addressed to a banker requiring him to pay a sum certain in money at a fixed or determinable future time, that is to say, on presentation." McLean V. Clydesdale Banking Co., 9 App. Cas. 95, 106; Boyd v. Nasmith, 17 Ont. 40, 44. (17) "A bill of exchange sometimes defined, an inland bill of exchange." State v. Fraley, 71 W. Va. 100, 101, 76 SE 134, 42 LRANS 498. (18) "Nothing more or less than a request by its maker upon his banker to pay over a certain amount of his, the maker's funds, to the payee." Leipschitz v. Montreal St. R. Co., 9 Que. Q. B. 518, 529. [a] Other definitions.-(1) "A written order, or request, for the payment of money, addressed to a bank or banker." Thompson v. State, 49 Ala. 16, 18. (2) "An order to the bank to pay the money of the drawer to the payee." Georgia Nat. Bank v. Henderson, 46 Ga. 487, 491, 12 AmR 590. (3) An order addressed to a bank to pay a certain sum to the order of another. Weiand v. State Nat. Bank, 112 Ky. 310, 65 SW 617, 66 SW 26, 23 KyL 1517, 56 LRA 178. (4) "An order for the payment_of money, State v. Crawford, 13 La. Ann. 300 [cit Burrill L. D.; Edwards Bills & N. pp 57, 1]. (5) "An order to pay the holder a sum of money at the bank, on presentment of the check and demand of the money." Bullard v. Randall, 1 Gray (Mass.) 605, 606, 51 AmD 433 [quot Minot v. Russ, 159 Mass. 458, 459, 31 NE 489, 32 AmSR 472, 16 LRA 510; Hawley v. Jette, 10 Or. 31, 35, 45 AmR 129]. (6) "A bill of exchange, drawn by a customer upon his banker, payable on demand.' Peo. v. Kemp, 76 Mich. 410, 415, 43 NW 439; Lawson Rights, Rem. & Prac. § 530 [quot Connor v. Becker, 56 Nebr. 343, 345, 76 NW 893]. (7) "A bill of exchange payable on demand." Duncan v. Berlin, 60 N. Y. 151, 153; Chapman v. White, 6 N. Y. 412, 417, 57 AmD 464; Harker V. Anderson, 21 Wend. (N. Y.) 372, 373; Hobart Nat. Bank v. McMurrough, 24 Okl. 210, 211, 103 P 601. (8) "A written order, or request, addressed to a bank, or to persons carrying on the business of bankers, by a party having money in their hands, requesting them to pay on presentment, to a person named therein, or to him or bearer, or order, a named sum of money." Hawley v. Jette, 10 Or. 31, 34, 45 AmR 129. (9) "A written order on a bank directing it to pay a certain sum of money.' Grissom v. Commercial Nat. Bank, 87 Tenn. 350, 364, 10 SW 774, 10 AmSR 669, 3 LRA 273. (10) "An inland bill of exchange, drawn on a banker, payable to bearer on demand." Byles Bills (Sharswood's ed.) 84 [quot Rogers v. Durant, 140 U. S. 298, 301, 11 SCt 754, 35 L. ed. 481]. (11) "A written order or request, addressed to a bank, or to persons carrying on the business of bankers, by a party having money in their hands, requesting them to pay on presentment, to a person named therein, or to him, or bearer, or order, a named sum of money." Burrill L. D. [quot Bowen v. Newell, 7 N. Y. Super. 326, 328]. (12) “A writ-exchange. [b] "Occasionally the expression is used 'payable on presentation,' but evidently-except perhaps in Story on Bills-as synonymous with payable on demand.'" Harrison v. Nicollet Nat. Bank, 41 Minn. 488, 489, 43 NW 336, 16 AmSR 718, 5 LRA 746. [c] Illustration.-A written order on a bank in which the drawer had a deposit ordering payment of a specified sum to the payee if countersigned by the drawer and presented in his lifetime, and if presented after his death to pay without being countersigned, is a check under Civ. Code § 3254, defining a check as a bill of exchange, etc. Nassano V. Tuolumne County Bank, 20 Cal. A. 603, 130 P 29. [d] Check or bill of exchange.An indorsement on an architect's certificate, reciting that a certain amount is due the contractor, "Peabody, Houghteling & Co.: 'Pay to the order of the Empire Building Company.'" (the contractor), and signed by the owner of the building, P., H. & Co. having in their hands funds of the owner to be paid out as required for the construction of the building, is a check and not a bill of Chicago Industrial Bank [g] Indorsed certificate of deposit.-Under Remington & B. Code § 3516, 3575, defining a "bill of exchange" as an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay, on demand or at a fixed or determinable future time, a specified sum, to order or bearer, and defining a "check" as a bill of exchange drawn on a bank payable on demand, a certificate of deposit properly indorsed by the depositor is a "check" within an information charging larceny of a check by means of false pretenses. State v. Garland, 65 Wash. 666, 118 P 907. Effect as assignment of funds see Assignments §§ 81-87. Check as payment see Payment [30 Cyc 1207]. Liability of bank to holder of check see Banks and Banking § 402. 69. U. S. v. Wickersham, 20 Philippine 440, 447. 70. Mo.-National Bank of Commerce v. German-American Bank, 148 Mo. A. 21, 127 SW 434; National Bank of Commerce v. Mechanics' American Nat. Bank, 148 Mo. A. 1, 127 SW 429. N. Y.-Riddle V. Montreal Bank, 145 App. Div. 207, 130 NYS 15 (holding that a bill of exchange drawn on a bank and payable on demand, as it is under Negotiable Instruments Law when mentioning no specific date of payment, is by express provision of § 321 a check). Wash.-State v. Garland, 65 Wash. 666, 118 P 907. Wis.--Columbian Banking Co. V. 71. See infra § 17. Holland v. Mutual Fertilizer 73. U. S.-Bowen v. Needles Nat. Bank, 87 Fed. 430 [aff 94 Fed. 925, 36 CCA 553]. Ind. Harrison v. Wright, 100 Ind. 515, 50 AmR 805. Iowa.-Roberts v. Corbin, 26 Iowa 315, 96 AmD 146. Md.-Exchange Bank V. Sutton Bank, 78 Md. 577, 28 A 563, 23 LRA 173. Mo.-State v. Vincent, 91 Mo. 662, 4 SW 430. N. Y.-Little v. Phenix Bank, 2 Hill 425. |