Before even the depositor, however, can sue the bank he must show that the check was properly presented, which, of course, includes proper indorsement. If the depositor does not show that all the steps. necessary for a proper presentment of the check were taken he loses his suit. So it was held in Harden v. Birmingham Trust and Savings Bank, Decision No. 1416, where the court said:

"In order to fix a liability, as for breach of duty, on a bank for a failure to pay a check of a depositor drawn in favor of another person, it must appear that the check was presented at the proper time and place, and properly indorsed by the payee, and, if it has been transferred by the payee to another, then it should be indorsed by such other person also"

See Decision No. 1416.

Banks and Banking: Payment of Check.

The case of S. Weisberger Co. v. Barberton Savings Bank Co., Decision No. 1417, was an action brought by a depositor against a bank. The facts as stated by the court were as follows:

"At the trial in the Court of Common Pleas, some of the facts were agreed upon, and they show that, at the date of the check mentioned in the petition, the plaintiff in error was indebted to one Max Roth, of New York city, in the sum of $122.13, and that his place of business at that time was No. 48 Walker street of that city. To pay the above indebtedness the plaintiff in error, on the 13th day of January, 1906, drew its check of said amount, on the defendant in error, in favor of and payable to Max Roth, in the following words: 'Barberton, O., 1-13, 1906. Pay to the order of Max Roth ($122.13/100) one hundred twenty-two 13/100 dollars. The S. Weisberger Co. To the Barberton Savings Bank, Barberton, Ohio.' This check, with a letter signed by the firm, was placed in an envelope, which was addressed to Max Roth, 48 Walker street, Cleveland, Ohio, instead of Max Roth, 48 Walker street, New York city. The letter, so addressed and containing the check, shortly after it had been mailed to Cleveland, was delivered by the post office authorities to one claiming to be Max Roth, who lived or roomed on Henry street in the city of Cleveland. It appears that his name was Max Roth, but not the Max Roth to whom plaintiff was indebted, and whose place of business was 48 Walker street, New York city. The Cleveland Max Roth, to whom the letter containing the check was delivered, took the check to a saloonkeeper in Cleveland, with whom he was acquainted, and after indorsing his name, Max Roth, on the back of the check, received the cash for the same from the saloonkeeper, whose name is B. Schoenfeld. The latter indorsed and delivered it to the Cleveland Trust Company, which later indorsed and deposited it with the Union National Bank of that city, by which the check was presented to defendant bank for payment, and it was paid and charged to the account of plaintiff."

The court held that the mispayment by the bank was caused by the negligence of the depositor in wrongly addressing the check, and on this ground denied recovery, saying:

"In the case at bar, it appears that neither the depositor nor the bank intended to commit any wrong, and we may apply a rule the substance of which is that, where one of two innocent parties must suffer because of a fraud or forgery, justice imposes the burden upon him who is first at fault and put in operation the power which resulted in the fraud or forgery. We decide this case on its own puculiar facts, and make no search for or examination of reported cases, and affirm the judgment of the lower court."

It is to be noted that the court explicitly refuses to lay down any general rule and merely decides on the particular facts before it that the plaintiff could not recover. It seems to us that this holding, even though limited to the particular case, is incorrect.

It is perfectly true that the plaintiff was negligent in addressing the check to Cleveland instead of New York. Even granting that this negligence breached a duty owing from plaintiff to defendant, there is another well-settled rule of law which to our mind should defeat the claim of defendant. Even though a man be negligent he is not necessarily liable for each and every result of his negligence, but only for the natural and probable results. It seems to us that the depositor was not bound to foresee that the wrongful recipient of the check would commit a crime by forging the indorsement, and that therefore this wrongful indorsement which caused the loss was not the natural and probable result of the plaintiff's carelessness in misdirecting the check. It has been so held in New York and several other States. This being the law, the case stands merely on the ordinary ground of a bank paying out money on a check with a forged indorsement, and, to our way of looking at it, recovery should have been allowed.

See Decision No. 1417.

Bills and Notes: Contracts: What Law Governs.

It is well settled that the law of the place where a contract is made governs in so far as questions affecting the legality and interpretation of the contract are concerned. This is reaffirmed in Walker v. Lovitt, Decision No. 1418, where the court said:

"The rule is well settled that the validity, construction, and obligation of a contract must be determined by the law of the place where it is made or is to be performed. The law of the place becomes a part of the contract, and the courts of another jurisdiction will enforce it in accordance with its legal effect where made or to be performed."

There is sometimes confusion as to the exact place where the contract is made. It is not necessarily the place where the contract is signed, dated or written, but it is the place where the contract goes into effect. For example, a note is dated in Pennsylvania and written and signed in that State, but is delivered to the payee in New Jersey. Since the note does not take effect until delivery, it is the place of delivery which determines the place of the making of the contract, and as this place was New Jersey, the note would be a New Jersey contract, notwithstanding the execution of the note in Pennsylvania. So the law is reaffirmed in Walker v. Lovitt, where the opinion reads:

"The place where a contract is made depends, not upon the place where it is actually written, signed, or dated, but upo the place where it is delivered, as consummating the bargain."

In this case the court further holds that where a contract is silent as to the place of performance and there are no special features in the case indicating any particular place for performance, the place for performance will be the place where the contract was made. We quote the court:

66

When a contract for the payment of money is silent on the subject, the place of payment is presumed to be the place of making, and the debtor must seek the creditor at his domicile or place of business." See Decision No 1418.

Bills and Notes: What Law Governs: Negotiability: Attorney's Fees.

In accord with the principles of law discussed in the preceding note is the case of Mackintosh v. Gibbs, Decision No. 1419, where the court holds that the liability of an indorser who indorsed in New Jersey a note made and delivered in California was to be determined by the law of New Jersey. The court said:

"We concur with that court in the view that the question of the liability of the defendants upon the note depends upon the effect that the law attributes to their act, and that such effect is to be determined by the law of the State of New Jersey, where the transfer of the note was made."

We have several times discussed the question as to whether a provision in a note providing for the payment of attorney's fees in case of default impairs the negotiability of the instrument. Some States hold that such a provision renders the amount of the note uncertain and therefore destroys the negotiability. Other States hold that the amount to be paid is certain, and that until after default the principal

sum is all that is due, and that the question of negotiability concerns itself only with the instrument before maturity. This latter view is adopted in Decision No. 1419, where the court says:

"The effect of a provision for attorney's fees, to be added in the event of suit brought, has given rise to some difference of opinion, but the greater weight of authority, and also the better reasoning, as we think, is in favor of the negotiability of notes containing such a provision, which becomes effective only in case of default in payment of the note at maturity."

In this case the note contained the further provision that in the case of default in the payment of any instalment of interest the whole note would become due at the option of the holder. It was held that this provision did not impair the negotiability of the instrument. The court said:

"Our previous statute was the 'Act concerning promissory notes,' etc., approved March 27, 1874 (2 Gen. Stat. 1895, p. 2604), the first section of which traces its origin to the Act 3 & 4 Anne, c. 9, § 1. Under the latter statute it was long ago held in England that a note payable in instalments was negotiable (Oridge v. Sherborne, 11 M. & W. 373), and that a condition that the whole amount should become immediately payable on default in the payment of a single instalment did not destroy its negotiability. Carlon v. Kenealy, 12 M. & W. 139; 13 L. J. Exch. 64. The same rule obtains generally in this country. Chicago Railway Co. v. Merchants' Bank, 136 U. S. 268, 284, 10 Sup. Ct. 999, 34 L. Ed. 349; I Randf. Comm. Paper, § 12; 7 Cyc. 599."

See Decision No. 1419.

Bills and Notes: Negotiability.

In Holliday State Bank v. Hoffman, Decision No. 1420, a note was given which contained a reference to certain collateral security given and also the following provision: "If, in the judgment of the holder of this note, said collateral depreciates in value, the undersigned agrees to deliver when demanded, additional security to the satisfaction of said holder; otherwise this note shall mature at once." The note was held to be non-negotiable for two reasons. In the first place, said the court, it contained a provision for the doing of something other than the payment of money, i. e., the delivery of additional security, and in the second place, the time of its maturity was uncertain. On this latter ground the court analyzed the difference between the provision in the note in suit to the effect that on depreciation in the value of the security the whole note should become due and provisions similar to the one discussed in the preceding note to the effect that in case of default in payment of any instalment of interest the whole note