honor. Protest is necessary as a preliminary to a valid payment for honor. If paid for honor before it is protested the presumption is that it was paid for the honor of the drawee. In such a case the party who pays supra protest takes the place, and acquires the rights of an indorsee. The payment should be made in the presence of a notary, with a declaration for whose honor it is made, and it should be recorded in the protest itself or in a separate instrument. This declaration should declare the intention of the payer for honor to pay the bill for honor and for whose honor he pays. This notarial act of honor, as it is called, should be in writing and appended to the protest. (301, 302.)

Refusal to receive-effect of. Where the holder of a bill refuses to receive payment supra protest, he loses his right to hold any party who would have been discharged by such payment. (305.)

Effect of payment. Payment supra protest does not amount to a satisfaction or complete discharge of the instrument. The party who pays for honor to the holder is entitled to receive both the bill itself and the protest, and by such payment he takes. to himself all the title of the party for whose honor he has paid. Under such circumstances he has a right of action against the party for whose honor he has paid, and all parties prior to him, but the payment for honor discharges all parties subsequent to him for whose honor it was paid, and this even

though the holder's title has been made through them. For instance, A is drawer, B drawee, C payee and indorser, D, E, F, G indorsers, and H is holder. X pays H for the honor of E. F and G are discharged from liability, while X takes E's title and has his right of action against E, D, C, and A. He also has a right of action against B, if he has accepted; otherwise not. He is even entitled to recover against B, if B had accepted the instrument for the accommodation of C or any other indorser; but if the accommodation acceptance was for A, the drawer's benefit, B would not be liable to X. (304, 306.)

PART XIV

QUASI NEGOTIable InstrumeNTS

The following instruments are not, in a strict sense of the word, Negotiable Instruments, but by force of custom and statute they have acquired certain qualities of negotiability and are, therefore, described as Quasi Negotiable Instruments.

The most frequent occasion for the transfer of Bills of Lading and Warehouse Receipts is where they are used as collateral upon which to secure advances. It was this custom which brought about the enactment of the statutes generally. In some States the statutes simply provide that they may be accepted by banks or individuals as collateral or pledges, up to a certain amount, and the party to whom they are transferred by indorsement shall be deemed the owner, so far as to give validity to any pledge, lien or transfer to any person.

In other States they have been declared negotiable. In all States where not expressly negotiable, they are treated as having an assignable value, which somewhat approaches negotiability.

BILLS OF LADING

Definition. A bill of lading is a written evidence of a contract for the carriage and delivery of goods. A more comprehensive and

correct one perhaps is that which defines it to be a written acknowledgment by a common carrier of the receipt of certain goods described therein and an agreement to transport them to their place of destination and there to be delivered to the consignee or parties therein designated. Bills of lading first came into use in connection with the transportation of goods by sea. This would now include the transportation of goods by any water route, as lakes, rivers, or canals, and, since the introduction of railroads, it has come to be applied to the instruments now in use by carriers of goods by land, although we know of these bills of lading more frequently as "freight bills," express receipts," etc.

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Form. Each should contain a description of the quantity, the condition in which the goods are received, the marks on the same, the names of the assignee and assignor, the places of shipment and discharge, and the price of the freight.

Second, If any limitation upon the liability of the common carrier has been agreed upon between the parties, it should be expressed in the bill of lading. All the parties are bound by the express terms of the bill of lading, which can not be varied by oral evidence. It should be noted that when the bill of lading acknowledges the receipt of goods "in good order and well conditioned," it has reference only to the external condition and is not a guaranty of good internal condition.

Where goods are carried by sea, the bill of lading is usually issued in sets of three, these three or more copies constituting but one contract. One of these three is retained by the common carrier, a second is given to the consignor, and a third may be sent to the consignee. The copy delivered to the consignor is regarded as the original copy, and if any questions arise concerning the contract they are to be interpreted according to the copy which is delivered to the consignor. Statutes have been enacted in many of the States with regard to the nature and operation of bills of lading and warehouse receipts. As a contract, a bill of lading is at law not even negotiable. These statutes, however, have generally made them so, and in most of the States a bill of lading is transferable usually by indorsement. Strictly speaking, only the consignee or the party to whom the goods are sold can transfer the bill of lading. Cases may happen, however, where the consignor owns the goods and sends them to the consignee, who is, in fact, only his agent; under such circumstances the transfer of the instrument must be made by the consignor.

Delivery. Delivery of the bill is essential to pass title to the goods as the indorsement.

Indorsement. Indorsement of the bill of lading may be made in blank, may be conditional or restricted, and, if so made, the indorsee becomes subject to the conditions or restrictions named.