PREFACE AND HISTORY AND CON

STRUCTION OF THE ACT.

In 1878 Judge Chalmers published his Digest of the English law relative to bills of exchange. Two years thereafter the Institute of Bankers and the Associated Chambers of Commerce instructed him to prepare a bill on the subject. This he did. His aim, to use his own words, was "to reproduce as exactly as possible the existing law, whether it seems good, bad, or indifferent in its effects." This act was passed by the British Parliament in 1882 and was entitled the "Bills of Exchange Act." Recognizing the necessity of uniformity in these matters in this country, at a meeting of the National Conference of State Boards of Commissioners for Promoting Uniformity of Legislation held in August, 1895, a committee was appointed who drafted a bill codifying the laws of negotiable instruments. This codification was submitted to the conference at its annual meeting in 1896 and was adopted. This draft was entitled "The Negotiable Instruments Law."

This draft has been adopted with a few modi

fications by the following States, Territories and Districts: Alabama, Arizona, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Missouri Montana, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

The act as originally prepared with certain changes has been adopted by this State. Section 19 originally read "the signature of any party may be made by a duly authorized agent. No particular form of appointment is necessary for this purpose; and the authority of the agent may be established as in other cases of agencies." For this was substituted by the Kentucky Legislature the following: "The signature of any party may be made by an agent duly authorized in writing."

Sections 95 and 96 in the original draft read as follows: Section 95. "A written notice need not be signed, and an insufficient written notice may be supplemented and validated by verbal communication. A misdescription of the instrument does not vitiate the notice unless the party to whom the notice is given is in fact mislead

thereby." Section 96 was, "A notice may be in writing or merely oral and may be given in any terms which sufficiently identify the instrument and indicate that it has been dishonored by nonacceptance or non-payment. It may in all cases be given by delivering it personally or through the mail." As adopted by this State these sections read as follows: Section 95. "A written notice need be signed, and an insufficient written notice may be supplemented and validated by a written communication. A misdescription of the instrument does not vitiate unless the party to whom the notice is given is in fact mislead thereby." Section 96 as adopted reads: "The notice may be in writing, and may be given in any terms which sufficiently identify the instrument and indicate that it has been dishonored by non-acceptance or non-payment. It may in all cases be given by delivering it personally or through the mail." Under these sections it has been held by the Court of Appeals that a notice must be in writing and signed. See notes to these sections.

Down to and including Section 189 this State has adopted the original draft, with certain modifications, and with the same number as to sections. It omitted Section 190 which gave a title to the act, for the reason that that title was found in the caption. Sections 190, 191, 192, 193 and

194 of our Act are the same as Sections 191, 192, 193, 194 and 195 of the original draft.

Our Act omits Section 196 of the original draft, which is as follows: "In any case not provided for in this act the rules of the law merchant shall govern." We suppose this was omitted for the reason that this would have been the law without it.

Sections 197 and 198 of the original draft enumerated what laws were repealed and when the law should take effect. What laws are repealed are stated in Section 195 of our Act, which provides that all laws that are "inconsistent with this act are hereby repealed." Our Statute was approved by the Governor on March 25, 1904, and under Section 55 of our State Constitution became a law on June 13, 1904.

As we have stated, the English Bills of Exchange Act was nothing more nor less than a codification of the law merchant with all its good and bad effects. So the Negotiable Instruments Law as prepared by its authors followed in the same line and was only a codification. These views have been adopted by the Court of Appeals of this State. In the case of Wettlaufer v. Baxter, 137 Ky. 362, 125 S. W. 741, the Court of Appeals said: "The negotiable instrument act is not a new law. It is with few exceptions merely

the codification of old laws that were in force and effect by virtue of judicial pronouncement or legislative enactment, and generally uniform. In many of the States, including our own, there was very little statutory law on the subject of bills and notes previous to the passage of this act. Some of these statutes were not uniform, nor indeed were the opinions of the courts altogether in harmony. And so, to remove the confusion and uncertainty that was caused in commercial affairs by the lack of uniformity in legislative enactments and harmony in judicial opinions, a committee of gentlemen learned in the commercial law prepared the negotiable instrument act, not with a view of making any radical changes in the law as generally understood and administered, but to remove the doubt as well as conflict that had in some instances come into existence from difference in statutory laws as well as court opinions. The result of their labors was the present act, which has become the law in a large majority of the States. And looking to the intention of the law and the purpose of its preparation and enactment, if there is doubt about the meaning of any of its provisions, and that doubt can be solved by a reference to the law merchant as it was theretofore administered, this law should be looked to, and the act if practicable given such a construc