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the State. Any other bill is a foreign bill. Unless the contrary appears on the face of the bill, the holder may treat it as an inland bill.30 Independent of this statutory rule it is now well established that a bill drawn in one State upon a person who is a resident of another State, and payable there, is a foreign bill.31 This doctrine was controverted and was only settled after a considerable discussion by both the courts and text-writers. The reason for the rule is clear. Each State is foreign as to every other, in respect to its individual sovereignty; it is governed by separate laws, having a separate and distinct municipal jurisprudence, and exists as an independent and supreme governing power, except so far as it is controlled and limited by the supreme sovereignty conferred upon the Federal Government by the Con
30. Neg. Inst. L. (N. Y.), § 213. Indiana.— American Express Co. v.
The English Bills of Exchange Act Haire, 21 Ind. 4, 83 Am. Dec. 334; of 1882 provides (in § 4) that “an State Bank of Indiana v. Hayes, 3 Ind. inland bill is a bill which is, or on the 400. face of it purports to be, both drawn Kentucky.— Rice v. Hogan, 8 Dana, and payable within the British islands, 133; Chenowith v. Chamberlain, 6 B. or drawn within the British islands Mon. 40, 43 Am. Dec. 145; Harmon upon some person resident therein. v. Wilson, 62 Ky. 322; Gray Tie & Any other bill is a foreign bill. For Lumber Co. v. Farmers' Bank, 22 Ky. the purposes of that act British L. Rep. 1333, 60 S. W. 537. islands include any part of the United Maine. - Green v. Jackson, 15 Me. Kingdom of Great Britain and Ire- 136; Warren v. Coombs, 20 Me. 139; land, the islands of Man, Guernsey, Freeman's Bank v. Perkins, 18 Me. Jersey, Alderney, and Sark, and the 292; Ticonic Bank v. Stacpole, 41 Me. islands adjacent to any of them being 302. part of the dominions of her majesty. Massachusetts. —Phenix Bank Unless the contrary appear on the face Hussey, 12 Pick. 483 of the bill, the holder may treat it as Missouri. - Linville v. Welch, 29 Mo. an inland bill."
203. 31. United States.-U. S. Bank v.
New Hampshire.— Carter v. Burley, Daniel, 12 Pet. 32, 9L. Ed. 989; 9 N. H. 558; Grafton Bank v. Moore, Buckner v. Finlay, 2 Pet. 586, 7 L. 14 N. H. 142; Simpson v. White, 40 Ed. 528; Dickens v. Beal, 10 Pet. 572, N. H. 540. 9 L. Ed. 538; Life Insurance Co. v. New York.-Halliday v. McDougall, Pendleton, 112 U. S. 696, 5 Sup. Ct. 20 Wend. 81; Bank of Commerce v. 314, 28 L. Ed. $66; Armstrong v. Rutland & W. R. Co., 10 How. Pr. 1; Am. Exchange Bank, 133 U. S. 433, Commercial Bank of Kentucky v. Var: 10 Sup. Ct. 450, 33 L. Ed. 747 ; Lons- num, 49 N. Y. 269. dale v. Brown, Fed. Cas. No. 8,494. Oklahoma.- Morrison v. Farmers &
Alabama.- Donegan v. Wood, 49 Merchants' Bank, 9 Okla. 697, 60 Pac. Ala. 242, 20 Am. Rep. 275; Todd v. 273. Neal, 49 Ala. 266; Turner v. Patton, Rhode Island – Aborn v. Bosworth, 49 Ala. 406; Quigley v. Primrose, 8 1 R. I. 401. Port. 247.
South Carolina. - Duncan v. Course, Florida.- Joseph v. Soloman, 19 1 Const. Rep. 100; Bank of Cape Fear Fla, 623.
v. Stinemetz, 1 Hill, 44. Georgia.-- Hartridge v. Wesson, 4 Tennessee.-Gardner v. Bank of TenGa. 101.
nessee, 31 Tenn. 420. Illinois.- Mason v. Dousay, 35 Ill. Virginia.- Brown v. Ferguson, 4 424, 85 Am. Dec. 368.
Leigh, 37, 24 Am. Dec. 707.
stitution of the United States. 32 It follows therefore that the laws regulating the use of bills of exchange in the several States may differ, and the reasons which exist for treating as foreign a bill drawn upon a resident of another State are the same as those which exist in the case of a bill drawn upon a resident of a foreign country.
b. Distinction between foreign and inland bills.- The most important distinction between foreign and inland bills is that the former, if dishonored by nonacceptance, must be protested for nonacceptance, and if dishonored for nonpayment, must be protested for nonpayment.33 It is, however, necessary for other purposes than that of protest to ascertain whether a bill is foreign or inland. In the case of an inland bill the laws regulating its validity are the same notwithstanding the residence of the parties; but in the case of a foreign bill the validity, interpretation, and effect of the instrument will be determined by the laws of the State or country where the obligations of the several parties thereto are to be performed.
c. Determination of question as to what constitutes a foreign bill.— The face of the bill will generally indicate its character. Under the Negotiable Instruments Law and the English Bills of Exchange Act a bill may be treated by the holder as an inland bill unless the contrary appears on its face. 34 As a result of this provision, which is apparently new in the English Act of 1882
32. Sir William Blackstone, in his States of the Union in relation to each Commentaries (vol. II, p. 467), distin- other, we are clearly of the opinion guishes foreign from inland bills by that bills drawn in one of these States defining the former as bills drawn by upon persons living in any other of a merchant residing abroad upon his them partake of the character of forcorrespondent in England, or vice eign bills and ought so to be treated. rersa; and the latter as those drawn For all national purposes embraced by by one person on another, when both the Federal Constitution, the States drawer and drawee reside within the and the citizens thereof are one, united same kingdom. Chitty (p. 16) and under the same sovereign authority, other writers (Bayley and Kyd) on and governed by the same laws. In bills of exchange are to the same effect; all other respects the States are necesand all of them agree that, until the sarily foreign_to and independent of statutes of 8 & 9 Wm. III, chap. 17, each other. Their Constitutions and and 3 & 4 Anne, chap. 9, which forms of government being, though replaced these two kinds of bills on the publican, altogether different, as are same footing, and subjected inland bills their laws and institutions. Buckner to the same law and custom of mer- v. Finley, 2 Pet. (U. S.) 586, 7 L. Ed. chants which governed foreign bills, 528. the latter were much more regarded 33. Neg. Inst. Law (N. Y.), § 260. in the eye of the law than the former, See also as to protest of bills of exas being thought of more public con- change, post, chap. XV. cern in the advancement of trade and 34. Neg. Inst. Law (N. Y.), § 213; commerce. Applying this definition to English Bills of Exchange Act of 1882, the political character of the several $ 4, subd. 2.
and in the Negotiable Instruments Law, the presumption in each case will be in favor of treating bills of exchange as inland, and the holder of a bill, which, upon its face, does not show its character as a foreign bill, may treat it as inland. It is a well-settled principle of law, independent of the provisions of the statuto, that the courts will not take judicial notice of the fact that a city, village, or town, mentioned in a bill as the place where it was drawn or made payable, is located in a foreign country or State. 35
Testimony may be admitted to show that a bill which on its face purports to be a foreign bill is in reality an inland bill, and therefore subject to the Stamp Act.36 But, on the other hand, as against a bona fide purchaser without notice, it cannot be shown that a bill purporting to be foreign is an inland bill, or vice versa. 37
It has been held in Kentucky that when a bill did not indicate on its face the place where it was drawn, but the evidence and circumstances showed that the drawer resided in Kentucky and the drawee in Ohio, the legal presumption is that it was drawn at the drawer's residence.88
$7. Parties to bills of exchange.
A bill of exchange is 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 and determinable future time, a sum certain in money to, or to the order of, a specified person or bearer. This is the definition contained in the English Bills of Exchange Act,39 and also in the Negotiable Instruments Law.40 No particular form of
35. Kearney v. King, 18 E. C. L. the law of the State of Illinois in
In the case of Towne v. Rice, 122 36. Jordaine v. Lashbrooke, 7 T. R. Mass. 67, it was held that the maker (Eng.) 601; Bire v. Moreau, 2 C. & or indorser of a promissory note canP. (Eng.) 376; Bartlett v. Smith, 11 not, as against an indorsee of the same M. & W. (Eng.) 483.
in the State of Massachusetts for value 37. Towne v. Rice, 122 Mass. 67; before maturity and without notice, Lennig v. Ralston, 23 Pa. St. 137. show that the note, although dated at
A bill of exchange drawn in Michi- Boston with intent that it should be a gan in favor of a Michigan payee on Massachusetts contract, was actually a person residing and having his place made in New York, and, on account of of business in Illinois, and which was illegal interest, was void under the accepted in Illinois, is a foreign, and usury laws of that State. not an inland bill, notwithstanding the 38. Harmon v. Wilson, 62 Ky. 322. drawee also had a place of business in 39. Eng. Bills of Exch. Act, 1882, Michigan, where he spent a portion of $ 3. his time; and it must be governed by 40. Neg. Inst. L. (N. Y.), $ 210.
words is necessary to a bill of exchange provided it is made clear that it directs one person to pay a certain sum of money to, or to hold that sum at the disposal of another. 41 The parties to a bill of exchange are (1) the drawer, the person who signs the instrument; (2) the drawee, the person to whom it is addressed, and (3) the payee, the person to receive the money.42 When the drawee has undertaken to pay the bill he is called the acceptor. Sometimes a bill is drawn payable to the drawer, in which case he is the payee, and there are then but two parties to the bill.43 It is provided in both the English Bills of Exchange Act and the Negotiable Instruments Law, which also seems declaratory of the general rule, that where a bill is drawn by the drawer payable to himself, or payable to a fictitious person, or a person not having capacity to contract, the holder may, at his option, treat it either as a bill or note.94 And a bill drawn by the drawer upon
himself as drawee, and made payable to himself, but indorsed to another person, may be treated as a bill of exchange by the indorsee in a suit against the drawer as an acceptor, or it may be treated as the promissory note of the drawer.” It seems conclusively established
41. Ellison v. Collingridge, 9 B. & the essential elements of two parties; C. 570.
i. e., a drawer and drawee. Fairchild 42. Byles on Bills (16th ed.), p. 2. v. Ogdensburgh, etc., Ry. Co., 15 N. Y. 43. Story on Bills of Exchange, 35. 337.
44. Where in a bill, the drawer and 45. England.— Miller v. Thomson, 3 drawee are the same person, or the M. & G. 576, in which case Lord Tindrawee is a fictitious person, or a per- dal said: “ There is an absence of the son not having capacity to contract, circumstance of there being two disthe holder may treat it at his option, tinct parties, as drawer and drawee, either as a bill or a note. English which is essential to the constitution Bills of Exchange Act, 1852, § 5 (2); of a bill of exchange. See also Ex p. Neg. Inst. L. (N. Y.), $ 214.
Parr, 18 Ves. 69; Shuttleworth v. Ăs an illustration.—A firm carries Stephens, 1 Campb. 407; Allan v. on business in London and Liverpool. Manson, 4 Campb. 115; Harvey v. The London house draws a bill on the Kay, 9 B. & C. 356, 364; Dehers v. Liverpool house. The holder may Harriott, 1 Show. 159; Starke v. Cheestreat it as a note made by the London man, Carth. 509; Robinson v. Bland, 2 house payable in Liverpool; and if it Burr. 1077. be not paid the omission to give notice Alabama.- Brazelton v. McMurray, of dishonor to the London house is 44 Ala. 323 ;. Hart v. Shorter, 46 Ala. immaterial. Chalmers Bills of 453; Capital City Ins. Co. v. Quinn, 73 Exchange, $ 4, p. 17.
Ala. 558. But such a bill in the hands An order drawn by the president of of an indorsee is a bill of exchange a railroad corporation upon its treas. Randolph v. Parish, 9 Port. (Ala.) 76. urer, directing the latter to pay to Georgia.- Patillo v. Mayer, 70 Ga. A. B., or order, a specified sum, stated 715; Lewis v. Harper, 73 Ga. 564; De as being the amount due A. B. for Vaughn v. Hangabook, 73 Ga. 809, work done by him as contractor, in Indiana.- Wardens, etc., of St. building a section of the corporation's James Church v. Moore, 1 Ind. 289. railroad, is in effect a promissory note, Kentucky.— Rice v. Hogan, 8 Dana and may be declared on as such. It is (Ky.), 133; Bradley v. Mason, 6 Bush not a bill of exchange because it lacks (Ky.), 603.
as a general rule, independent of statutory provision, that an instrument may be a bill of exchange although the drawer and drawee are the same persons ;46 and that such an instrument may be sued on either as an accepted bill or as a promissory note. 47 $ 8. Bills in a set.
a. When made.- There is usually but one copy made of an inland bill; but foreign bills are often made in sets. The Negotiable Instruments Law provides that “where a bill is drawn in a set, each part of the set being numbered and containing a reference to the other parts, the whole of the parts constitute one bill." * The reason for making foreign bills in sets is that the danger of miscarriage is thus decreased; if one or more of the bills is not delivered some one of the others may arrive at its proper destination. The custom of making foreign bills in sets has become so common that in some cases the purchaser or person in whose favor they are made may demand, as a matter of right, that they be made in sets. 49
b. Form of parts. The parts of a bill of exchange in a set are made on separate pieces of paper, each part being numbered and referring to the other parts.60 Each part should contain a condition, that it shall be paid, provided the others remain unpaid, and is generally in the following form: “Pay to A. B. or order, for value received, this my first of exchange (the second and third
Maine.- Cunningham v. Wardwell, the obligation to give a set is pre12 Me. 466.
sumably a matter of bargain. ChalMassachusetts.- Com. v. Butterick, mers on Bills of Exchange (5th ed.), 100 Mass. 12, 97 Am. Dec. 65.
Michigan.— Hasey v. White Pigeon Chitty says: “If a person has enBeet Sugar Co., 1 Doug. (Mich.) 193. gaged to deliver a foreign bill, it seems
New York.– Fairchild v. Ogdens- that he is bound, on request, to deburgh, etc., Ry. Co., 15 N. Y. 337. liver as many parts of it as may be
South Carolina.- McCandlish v. applied for; but if the drawer only Cruger, 2 Bay (S. C.), 377.
give one bill, he will, if it should be Texas.- Planters' Bank of Tennes. lost, be obliged to give another of the see v. Evans, 36 Tex. 592.
same date to the loser.” Chitty on 46. Harvey v. Kay, 9 B. & C. 356, Bills, p. 154. 364 (per Bayley, J.); Wildes v. Sav- The German Exchange Law, art. 66, age, 1 Story (U. S.), 22, Fed. Cas. No. provides that the payee is entitled to 17,653; Randolph v. Parish, 9 Port. demand a set from the drawer; and if (Ala.) 76.
a bill issued singly be destroyed or 47. Funk v. Babbitt, 156 Ill. 408, 41 lost, the indorsee can obtain a second N. E. 166. See also Bunting v. Mick, of exchange by addressing himself to 5 Ind. App. 289, 31 N. E. 378, 1055. his immediate indorser, who applies to
48. Neg. Inst. L. (N. Y.), $310. the indorser before, and so on up to See Appendix, post. See also English the drawer. Bills of Exchange Act of 1882, $ 71. 50. Byles on Bills (16th ed.), p.
49. Chalmers says that in England 137.