a high rate is reserved as a penalty, if the note is not paid at maturity, it will be waived, if the holder afterwards receives interest at the original rate.423 And in Minnesota parties are forbidden by statute to stipulate for interest on a note at a higher rate after maturity than before.424

Exchange and Re-exchange.

1714. The term "exchange" is used to designate the market value in one country of money to be delivered in another. The drawer of a foreign bill of exchange contracts for the payment of the money at the place on which the bill is drawn payable. By the law merchant, the holder of the bill may call upon the drawer to make good such payment by drawing a bill of re-exchange upon him. Reexchange is the expense which the drawer incurs by the dishonor of a bill in a foreign country, the cost of a bill of re-exchange, if it were actually drawn.425 The measure of this liability is determined by the laws of the country where the original bill is drawn.426 This cost of replacing the amount at the place of payment-that is to say, the face of the bill with the exchange-is, in general, recoverable against the drawer. But where the bill is drawn by an agent for his principal's account, and is taken up for him by his correspondent, he cannot, like a purchaser, recover against his principal exchange or statutory damages not actually paid by himself.427 The common rule is to allow only the ordinary exchange at the time of recovery, irrespective of the former rate, or the original cost at the time the bill was drawn.428 Exchange is not the mere cost of transportation, but the market price of a good bill.429

423 Bradford v. Hoiles, 66 Ill. 517.

424 Newell v. Houlton, 22 Minn. 19; Gen. St. § 2212. But such note will draw the legal rate after maturity. White v. Iltis, 24 Minn. 43.

425 Byles, Bills, 418; Benj. Chalm. Dig. art. 221; 2 Daniel, Neg. Inst. 452; 1 Pars. Notes & B. 648; Story, Bills, § 400.

426 1 Pars. Notes & B. 651.

427 Greene v. Goddard, 9 Metc. (Mass.) 214.

428 Whether more (Auriol v. Thomas, 2 Term R. 52) or less than the original cost (Hendricks v. Franklin, 4 Johns. [N. Y.] 119). And usage of an option to recover either original cost or exchange is inadmissible. Suse v. Pompe, 8 C. B. (N. S.) 538.

429 Although the bill has since depreciated. Balch v. Colman, 2 McLean, 85, Fed. Cas. No. 791.

The acceptor of a bill is not, in general, liable for exchange at common law, since his agreement was to pay at the place of payment, and not at the place of drawing. 430 But where a drawer has been obliged to pay statutory damages by way of re-exchange, according to the law of his place of contract, he may recover such damages against the acceptor, or prove them against his estate in bankruptCy. 431

The drawer of a foreign bill may be liable for re-exchange, although the bill has been returned circuitously through many hands,432 since each indorser is in effect a new drawer, and each indorsee may look to his indorser, and draw a bill of re-exchange on him. So, where there is no direct exchange between two countries, on account of war, and an indirect exchange exists through a third country, the bill must be paid by the drawer with such exchange.433 But if a country is in the enemy's hands, or under blockade, it may be found by the jury, as a fact, that there is no existing exchange to be allowed.434 A drawer in England will not, however, be relieved from liability from re-exchange because the drawee in France was forbidden by his government to make payment to an alien enemy." On the other hand, if the bill is made payable in a foreign country merely for the purpose of negotiation at the place where it is drawn, to put the holder in funds there, the holder will not be entitled to recover exchange on it against the drawer. 436

435

§ 1715. Promissory notes, in general, are not entitled to exchange, unless they are expressly so drawn.437 So, exchange cannot

430 Byles, Bills, 420; 2 Daniel, Neg. Inst. 456; 1 Pars. Notes & B. 650; Napier v. Shneider, 12 East, 420; Woolsey v. Crawford, 2 Camp. 445; Watt v. Riddle, 8 Watts (Pa.) 545.

431 Francis v. Rucker, Amb. 672; Walker v. Hamilton, 1 De Gex, F. & J. 602; In re General South American Co., 7 Ch. Div. 637. Or he may recover at law against the acceptor. Riggs v. Lindsay, 7 Cranch, 501.

432 Byles, Bills, 420; 2 Daniel, Neg. Inst. 454; 1 Pars. Notes & B. 652; Mellish v. Simeon, 2 H. Bl. 378.

433 Pollard v. Herries, 3 Bos. & P. 335.

434 Chit. Bills, 383; De Tastet v. Baring, 11 East, 265, 2 Camp. 65.

435 Mellish v. Simeon, 2 H. Bl. 378.

436 Williams v. Ayers, 3 App. Cas. 133.

437 2 Daniel, Neg. Inst. 461; 1 Pars. Notes & B. 652; Grutacap v. Woulluise,

2 McLean, 581, Fed. Cas. No. 5,854. merely made payable in another place.

And it has been held sufficient, if it is
Wood v. Kelso, 27 Pa. St. 241. But

be had on a note, between the place of payment and the place where suit is brought, without an express agreement to that effect.438 And, if goods are purchased and paid for by the foreign purchaser's bill on another English house, the holder cannot sue upon the original consideration after the bankruptcy of the acceptor, and recover exchange as part of his damages. 439

The parties may expressly fix the amount of exchange and expenses at any designated sum.440 And a note given to take up a bill drawn between parties in the same state, and not itself subject to statutory damages, may include the amount of re-exchange, as liquidated damages recoverable against the drawer.11 441 The amount of exchange recoverable is determined by the law of the place where the bill is drawn, and is a fluctuating rate, dependent upon market prices, unless fixed by law or contract.2 In general, the rate of a foreign exchange is a fact that must be proved by the holder.443 By the law merchant, exchange is recoverable at the rate prevailing when the notice of dishonor was given.444 If a bill is payable in foreign coin, the amount recoverable is the metal value of standard

see. contra, Scofield v. Day, 20 Johns. (N. Y.) 102. And exchange can only be recovered on special averments. Weed v. Miller, 1 McLean, 423, Fed. Cas. No. 17.346.

438 Chumasero v. Gilbert, 24 Ill. 651. "With current rate of exchange" in a note being unnecessary surplusage. Hill v. Todd, 29 Ill. 101. The contrary was held, however, in Grutacap v. Woulluise, supra.

439 Alcock v. Hopkins, 6 Cush. (Mass.) 484. Although it has been held that he may recover exchange on an account payable in another country.

v. Healey, 3 Sumn. 523, Fed. Cas. No. 5,696.

440 2 Daniel, Neg. Inst. 453; 1 Pars. Notes & B. 653.

441 Bank of U. S. v. Daniel, 12 Pet. 32.

Grant

442 "There is no rule of law fixing the rate which may be lawfully charged for exchange. It does not altogether depend upon the cost of transporting specie from one place to another, although the price of exchange is, no doubt, influenced by it. But it is also materially affected by the state of the trade, by the urgency of the demand for remittances and by the quantity brought into the market for sale; and sometimes material changes take place in a single day, although no alteration has happened in the expenses of transporting specie. The court therefore can lay down no rule upon the subject." Taney, C. J., in Andrews v. Pond, 13 Pet. 65, 77.

443 Butt v. Hoge, 2 Hilt. (N. Y.) 81.

444 Cowperthwaite v. Sheffield, 1 Sandf. (N. Y.) 416; Denston v. Henderson, 13 Johns. (N. Y.) 322; Graves v. Dash, 12 Johns. (N. Y.) 17; Hendricks v. Frank

coin, which is ascertained and proclaimed annually in the United States by the secretary of the treasury. Thus, the English pound sterling is now fixed at $4.863.445

Some statutes provide that bills payable in United States currency are recoverable without exchange, exchange being allowed only on the bills payable in foreign coin. 446 Others provide for damages in lieu of exchange. And in South Carolina it is provided that the jury may give the true difference of exchange on bills payable in any other country. 447

Notarial Fees.

§ 1716. The fees for protest of a bill are recoverable as part of plaintiff's damages, where protest is required by law. 448 And they may be recovered as damages against the indorser of a note, but not unless protest is necessary.* 450 And they cannot be recovered against the maker of a bank bill.451 The holder's damages may include necessary expenses, such as postage and telegrams, as well as protest fees. 452 And, where the holder has been obliged to incur the expense of a special messenger in giving notice, such expense is recoverable.453

lin, 4 Johns. (N. Y.) 119; U. S. v. Barker, 1 Paine, C. C. 156, Fed. Cas. No. 14,517.

445 Rev. St. U. S. §§ 3565, 3566.

446 ALABAMA (Code, § 1773); INDIANA (Horner's Rev. St. § 5509); LOUISIANA (Rev. St. §§ 322, 323); MISSOURI (Rev. St. §§ 731, 732); NEVADA (Rev. Laws, §§ 322, 323); UTAH (Rev. St. §§ 1656, 1657).

447 SOUTH CAROLINA (1 Rev. St. § 1402).

448 Byles, Bills, 415; Benj. Chalm. Dig. art. 213; 2 Daniel, Neg. Inst. 463. 449 Merritt v. Benton, 10 Wend. (N. Y.) 117. Where the protest is evidence of demand, Doughty v. Hildt, 1 McLean, 334, Fed. Cas. No. 4,027; and the indorser has received notice of dishonor, Curtis v. Buckley, 14 Kan. 450.

450 Cramer v. Manufacturing Co., 23 Kan. 399.

451 Johnson v. Bank, 29 Ga. 259.

452 Byles, Bills, 420; Dickinson v. Hatfield, 1 Moody & R. 141, 5 Car. & P. 46; Prehn v. Bank, L. R. 5 Exch. 92. But it has been held that such expenses must be specially averred in the declaration. Kendrick v. Lomax, 2 Cromp. & J. 405, 2 Tyrw. 438.

453 Chit. Bills, 533; 2 Daniel, Neg. Inst. 463; Pearson v. Crallan, 2 J. P. Smith, 404.

Commissions-Attorney's Fees.

§ 1717. A commission incurred in the collection, and known as "provision" for the bill, to the extent of one-half of 1 per cent., may also be recovered by the law merchant.*5*

A bill or note may also contain a stipulation for attorney's fees, and they may be included in the judgment.55 But such fees will not draw interest pending an appeal or other legal delay before payment.* 456 And if such fees are expressly reserved, but are not collectible in the original action on the note, a valid tender of the face of the note before suit, without such fees, will be sufficient.457 And no recovery can be had on such stipulation for fees, unless it is specially declared upon." And the note is not of itself sufficient evidence to support a judgment for the fees reserved in it.459 And if they are to be paid, if the note is "not paid when due, and the same is sued," they are not due until suit is brought, and cannot be recovered in an action on the note.460

458

454 Chit. Bills, 770; 2 Daniel, Neg. Inst. 463. And the commissions incurred may even exceed the sum agreed on for damages for nonacceptance. Prehn v. Bank, L. R. 5 Exch. 92. But, under the bills of exchange act, commissions of acceptor supra protest, and expenses of protest for better security, are not recoverable. In re English Bank of River Plate [1893] 2 Ch. 438.

455 Smiley v. Meir, 47 Ind. 559; Mason v. Luce, 116 Cal. 232, 48 Pac. 72 (in foreclosure of mortgage not containing the provision). So far as reasonable. Campbell v. Worman, 58 Minn. 561, 60 N. W. 668; Guthrie v. Reid, 107 Pa. St. 251; Ray v. Pease, 97 Ga. 618, 25 S. E. 360 (before Act 1891). But the assignor of a note is not liable to his assignee for such fees. Short v. Coffeen, 76 Ill. 245. And the guaranty of a note "to pay all costs and expenses paid or incurred in collecting the same" includes only legal costs, not charges for trouble, etc. Wetherbee v. Kusterer, 41 Mich. 359, 2 N. W. 45. And see § 205, supra. 456 Star Wagon Co. v. Swezy, €3 Iowa, 520, 19 N. W. 298. 457 Pinney v. Jorgenson, 27 Minn. 26, 6 N. W. 376.

458 Nickerson v. Sheldon, 33 Ill. 372.

459 Bowser v. Palmer, 33 Ind. 124.

460 Easter v. Boyd, 79 Ill. 325. But a note providing for interest to be compounded, if not paid at maturity, and for attorney's fees, does not make the latter conditional on nonpayment at maturity. Fitch v. Bank, 97 Ind. 211. (2439)