the land to A. But the obligation embodied in a bill or note differs quite as completely in the manner of its transfer, from other kinds of transferable property as it does from the ordinary common law debt or obligation to pay money, in being transferable at all. A bill or note, if payable to bearer, or indorsed in blank, is transferable by a mere transfer of the instrument, whether voluntary or involuntary, intentional or unintentional (9). Thus, if X owned such a note and A stole it from X, the title to the note would vest in A. Of course A would not be allowed to enforce the obligation, and would be compelled to return the note to X, but this is because of the manifest injustice of allowing him to keep it or assert his right upon it, not because he has not become the owner. In consequence, if A, the thief, sells the note to B, who knows nothing of the theft, B, having become the owner for value and without notice, may exercise the rights of ownership he has acquired from A, by holding and collecting it, or further negotiating it (10). Contrast this with a case where A steals X's horse, and then sells the horse to B, who is innocent of the theft. Here B, notwithstanding his innocence and the fact that he paid a full price to A, has no rights whatever in the horse. The reason is obvious: A by the theft of the horse did not become the owner; and the transfer of possession from X to A was involuntary and not coupled with an intention on X's part to make A owner. The horse never

(9) This is not true of bills and notes payable to order, unless they are indorsed. See § 83, below.

(10) Miller v. Race, 1 Burrow, 452; Grant v. Vaughn, 3 Burrow, 1516; Peacock v. Rhodes, 2 Douglas, 633.

became the property of A, and B could not become the owner by a transfer from A to whom the property did not belong (11).

§ 7. Summary: Bills and notes are negotiable. Bills of exchange and promissory notes, then, differ from common law obligations to pay money, in that bills and notes are transferable. They differ from other kinds of transferable property, as goods and land, in that they are transferable by mere delivery or even by involuntary change of possession. These two qualities are what give bills and notes the name of negotiable instruments. In their character as negotiable instruments they are like money, and it is their similarity to money which makes them of so much practical value in the business world.

(11) Dame v. Baldwin, 8 Mass. 518.

CHAPTER II.

FORMAL REQUISITES OF NEGOTIABLE INSTRUMENTS.

§ 8. In general. So far, we have spoken only of bills of exchange and promissory notes as negotiable instruments. But all bills and notes are not negotiable, and there are other mercantile instruments which are. What are the standards up to which an instrument must measure to be negotiable? The Negotiable Instrument Law (1) states generally the requisites as to form as follows:

(1) "The Negotiable Instruments Law" is a statute which was prepared by the Commissioners on Uniform State Laws to codify and make uniform the law of negotiable instruments throughout the United States. For the most part it codifies the pre-existing law. It has been adopted without important amendment in the District of Columbia and thirtyfive states and territories. For these two reasons it is cited and discussed in this article as an authoritative statement of the law of Negotiable Instruments. The following is a list of the jurisdictions which have adopted it (1909):

The law of England was similarly codified in 1882 by the Bills of Exchange Act, the provisions of which are largely incorporated into the American act.

Sec. 1. An instrument to be negotiable must conform to the following requirements:

1. It must be in writing and signed by the maker or drawer.

2. Must contain an unconditional promise or order to pay a sum certain in money;

3. Must be payable on demand, or at a fixed or determinable future time;

4. Must be payable to order or to bearer; and

5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty.

§ 8a. Ordinary forms of negotiable instruments. The typical form of a promissory note is this:

"Chicago, December, 20, 1909.

Three months after date I promise to pay to John Jones, or order [or, to the order of John Jones], four hundred dollars [with interest may be added if desired]. Jacob Smith.”

The typical form of a bill of exchange is:

"Chicago, December 20, 1909.

Pay to the order of John Jones four hundred dollars

A check is like a bill, except that is it directed to a bank or banker, and is not accepted.

In the note, above, Jacob Smith is maker and John Jones is payee. In the bill, Richard Flint is drawer, Jacob Smith is drawee and acceptor, and John Jones is payee. In a check a bank is drawee, and there is no acceptor. The drawer and payee are as in the bill.

§ 9. Materials for writing. Signature. A negotiable instrument may be written upon any substance capable of receiving writing. Paper is naturally the substance of greatest convenience and most common use, but there would seem to be no legal objection to more or less easily destructible material, as glass, on the one hand, or wood, metal, or stone on the other. Since, however, the custom of merchants is what originally gave this kind of written. contract its negotiable qualities, it might well be argued that any substance which is not legitimatized by mercantile usage and would deprive the instrument of value in business, would deprive it of its character as "commercial paper." This question, however, is largely academic, for it is unlikely that any one will attempt to inscribe a promissory note on a tombstone (2).

The writing may be executed by any instrument or tool sufficient for the purpose. Pen and ink are of course ordinarily used, but a writing in pencil is permissible, although not advisable (3). An instrument, every part of which, including the signature, is typewritten, or is printed (4), or one on which the signature is stamped (5), is per

(2) See Daniel on Negotiable Instruments, sec. 77. (3) Geary v. Physic, 5 Barnwell & C. 234.

(4) Weston v. Myers, 33 Ill. 424.

(5) Mayers v. McRimmon, 140 N. C. 640.