tion as will make it harmonize with the general principles of commercial law in force before its enactment." And again, in Campbell v. Fourth Nat. Bank, 137 Ky. 555, 126 S. W. 114, the court says: "The negotiable instrument act is in the main merely a codification of the common law rules on the subjects to which it relates. It was intended principally to simplify the matter by declaring the rule as established by the weight of authority. There are a few innovations in the law merchant as before settled by the courts. Where it lays down a new rule, it controls; but, where its language is consistent with the rule previously recognized, it should be construed as simply declaratory of the law as it was before the adoption of the act." To the same effect see Mechanics & Farmers' Savings Bank v. Katterjohn, 137 Ky. 427, 125 S. W. 1071; Williams v. Paintsville Nat. Bank, 143 Ky. 781, 137 S. W. 535; First Nat. Bank v. Bickel, 143 Ky. 754, 137 S. W. 790.

In Young v. Exchange Bank, 152 Ky. 293, 153 S. W. 444, this act was applied to a draft drawn, indorsed and accepted before the passage of this act. In that case it was held that this act was but a codification of the law merchant and should be applied to a draft drawn before its passage where our Court of Appeals had not

passed upon the question. In other words, this act was but a statement of the law as the Court of Appeals would have decided the law to be without the act.

From this history of the law and these decisions may be deduced three rules; first, the great and controlling factor in the construction of this act is that it is a codification of the law as it existed previous to its adoption. Second, that the purpose of this act was to establish uniformity of rule in the various States of this Union. Third, where a new rule is stated it obtains.

The first result of these rules is the fact that since this act is a codification of the law merchant it does not control the construction or enforcement of the rights and liabilities of parties to any contract which is not under the terms of this act a negotiable instrument. Eades v. Muhlenberg County Savings Bank, 157 Ky. 416, 163 S. W. 494.

The next result is that where this act does not establish a new rule and is only a codification of the law as it previously existed, the decisions of our Court of Appeals are the best evidence in this State of what the law means. A thorough understanding of these decisions is therefore essential to a proper construction of the act.

It is obvious that the uniformity sought by

this act will be statutory. The courts of the various States will construe it according to the light that they have; and one State will not yield to the construction given it by another State except to the extent that the rule of reason may prevail. Therefore, under this rule decisions of our Court of Appeals on the construction of this act will determine what the law is in this State.

Even the statement that where a new rule is introduced it must prevail is not so very important when we remember that this act is a codification. No rule in the act as originally written was absolutely new. Such rules are new only in certain jurisdictions. They once obtained in a majority of the States and were introduced into the act for the sole purpose of uniformity. Take for instance the question of the law of checks. The law once in this State was that a check was nothing more nor less than a bill of exchange. To this general rule exceptions were afterwards made by the courts. The Legislature merely restored the law to what it once was. Or, take the most radical change that has been made in Kentucky by the act (Section 184) which has made all promissory notes, which possess the essentials laid down by Section 1, negotiable. Even this, while making a new rule as to promissory notes, has introduced no new element in the

law of this State with regard to negotiable instruments.

From the beginning our Court of Appeals grasped with clear understanding the principles governing a bill of exchange. Both our Courts and Legislature refused to extend these principles to ordinary promissory notes. Unless such notes were discounted by banks whose private charters raised them to the footing of a bill of exchange or under the act of 1865, now Section 483 of the Kentucky Statutes, they remained with but little difference mere contracts for the payment of money. But under this act a promissory note. possessing the elements of negotiability is just as negotiable as a bill of exchange. The only difference is that one is an order and the other a promise. When once launched on their commercial journey they have the same characteristics and under the same conditions reach the same end. They are upon the same footing. Or to use technical language, a negotiable promissory note is now, at its inception, on the footing of a bill of exchange. The act even at this vital point introduces no new rule, but only enlarges the class to which this rule applies.

So that under all these rules the practicioner must, in the first instance, rely upon the opinions of our own court of last resort. Before the pass

age of this act we had over one hundred and ten years of judicial construction of the law merchant. And since its passage ten years of judicial construction of this act.

My single purpose in the preparation of this book has been to set forth as best I could the law merchant as it exists in Kentucky. No attempt has been made to go outside our State for decisions. I believe that in the decisions of our Court of Appeals will at least be found a foundation, and in many cases, the whole structure of the law.

In conclusion the author wishes to acknowledge his obligations to the work of Mr. Charles M. Lindsay, whose annotations to this act were published in 1904 and have been found most valuable. JOHN C. MILLER.

January 1, 1915.