In the United States?* In a railroad? In a mining company? In a bank? In a church? In a college? The executive department in each?

Write a list of all the corporations that you know or have ever heard of, grouping them under the heads public and private. Give a brief account of such old corporations as the East India Company, the Bank of England, Harvard College. What colonization companies were prominent in the early history of this country?

How could a pastor collect his salary if the church should refuse to pay it? Could a bank buy a piece of ground "on speculation"? To build its banking-house on? Could it buy a stock of goods? Could a county lend money if it had a surplus? Did you ever see a corporate seal? What is it for? State the general powers of a corporation. Some of the special powers of a bank. Of a city.

A portion of a man's farm is taken for a highway, and he is paid damages: to whom does said land belong? If trees grow upon the land, to whom do they belong? The road intersects the farm, and crossing the road is a brook containing trout, which have been put there and cared for by the farmer; may a boy sit on the public bridge and catch trout from that brook? If the road should be adandoned or lifted, to whom would the use of the land go?

CHAPTER XXXV.-COMMERCIAL PAPER.

Kinds and Uses.-If a man wishes to buy some commodity from another but has not the money to pay for it, he may secure what he wants by giving his written promise to pay at some future time. This written. promise, or note, the seller prefers to an oral promise for several reasons, only two of which need be mentioned here: first, because it is prima facie evidence of the debt; and, second, because it may be more easily transferred or handed over to some one else.

If J. M. Johnson, of Saint Paul, owes C. M. Jones, of Chicago, a hundred dollars, and Nelson Blake, of Chicago, owes J. M. Johnson a hundred dollars, it is plain that the risk, expense, time and trouble of sending the money to and from Chicago may be avoided,

The United States: "Its charter, the constitution. * * Its flag the symbol of its power; its seal, of its authority."-Dole.

and the indebtedness wiped out, by J. M. Johnson ordering Nelson Blake to pay the hundred dollars to C. M. Jones. The written order to this effect, called a draft, would be sent to C. M. Jones, who would present it for payment to Nelson Blake, and upon receiving his money would turn it over to Blake.

To avoid the risk of being robbed, merchants and some others are in the habit of depositing each evening in a bank the receipts of the day, with the understanding that the money will be paid out, at any time, to any person whom they order it paid to. The order on the bank is called a check.

It is very easy to see that these three devices are of immense value to the commercial world; the first by rendering available future resources, and the other two by enabling payments to be made safely.

Definitions.-A note is an unconditional promise in writing, to pay a definite sum of money at a certain time to a specified person.

A draft is an order, written by one person and addressed to another, directing him to pay a definite sum of money at a certain time to a specified third party.

A check is a draft for immediate payment, drawn upon a bank or banker.

In the case of a note, the person who promises to pay is called the maker of the note; and the person named to be paid, the payee.

In the case of a draft or check, the person ordering the payment is called the drawer; the person addressed, the person drawn upon or the drawee; and the person to be paid, the payee.

Negotiability. The payee in any of these cases may wish to transfer the paper to some other person. For instance, the holder of the note may wish to use the

money before it is duc, or the payee of a draft may wish to realize without going to the drawee. In either case, the desired accommodation can be secured only by selling the paper to some one else. This ability to be transferred is part of what is meant by the term negotiability.

But this liability to have to pay another person than the one named, cannot be imposed upon the maker or drawer without his consent. This he gives by inserting after the name of the payee the words "or order," or the words "or bearer." In the latter case, whoever holds the paper when it becomes due can collect upon it. In case the former words are used, the paper can be transferred only by indorsement, of which more anon.

A very important characteristic of negotiability is that it enables a person to grant to another rights which he may not himself possess. To illustrate: As between the maker and the payee, a note is a contract, and is binding only if it has all the requisites of a binding contract. Therefore, if there was no consideration, or if the note was obtained by fraud or by intimidation, the payee, knowing these facts, has no right to collect upon the note, and he could not by law compel payment. But with a third party it is different. He sees only the note, and may not-presumably does notknow anything else about the contract. To compel him before buying the note to learn all the details of its history, might be embarrassing to the parties, even where everything is all right, and would certainly delay, perhaps materially, the transfer. Therefore, to enable people to keep their business to themselves, and to facilitate transfers of commercial paper, it has seemed best not to require this investigation. The law presumes that when a person makes a transferable note, he

has done so deliberately; and if loss ensues, it says that he must bear it rather than the innocent purchaser of his note.

Conditions of Negotiability.-But this peculiar protection is given, be it observed, only to an innocent purchaser. If in good faith, in the regular course of business, a person comes into possession of commercial paper, negotiable in form, not yet mature, and for which he has given a reasonable consideration, he can collect on it. On the other hand, if he has found the paper or stolen it, or if he has bought it under circumstances calculated to raise a suspicion as to right of the seller, he should not have, and will not by law receive, this privilege. Thus, if a man is offered commercial paper of perfectly responsible parties at onethird its value, it would be reasonable to suppose that the person offering it had found or stolen it, and the buyer would obtain only the rights of the person from whom he bought. Or if a note past due is offered for sale, the presumption is that it is paid or that it is for some reason uncollectable, and the purchaser would buy at his peril. In other words, if there is anything on the face of the paper or in the circumstances of the case to warn the purchaser, he buys at his own risk, and secures only such rights as the vendor has.

Transfer.-Negotiable paper with the words "or bearer" is transferable by delivery alone. If made payable to some person "or order," it is transferable only by his indorsement. An "indorsement in full" consists of the signature of the payee and his order that the money be paid to a specified person. An "indorsement in blank" consists simply of the signature of the payee. The effect of the latter mode of endorsing is to make the paper payable to bearer.

Responsibility of Maker.-A note being a contract, the maker of one is responsible to the payee, as has been said, only if all the requisites of a binding contract are present. If the note is negotiable in form, he is responsible to the innocent purchaser of it.

Responsibility of Drawee.-The person drawn upon may know nothing of the draft. He cannot be made a party to a contract without his knowledge and consent. That he may have knowledge of the draft, it must be presented to him. If upon seeing it he is willing to assume the responsibility of paying it when due, he signifies his willingness by writing across the face of the draft the word "accepted," with the date of presentation and his name. The draft thereby becomes his unconditional promise, and he becomes the principal debtor, occupying the position of a maker of a note.

Responsibility of Indorser.-When a person endorses any commercial paper, he not only expresses thereby his consent to the transfer of it, but he also enters into a conditional contract with each person who may afterward come into possession of the paper, whereby he becomes responsible for its payment, if the principal debtor fails to meet his obligation. To fix responsibility upon an indorser, payment must be demanded of the principal debtor on the very day when the obligation matures, and if payment is not made notice of the fact must be sent to the endorser before the end of the following day.

Responsibility of Drawer.-Between the drawer and the payee a draft is a conditional contract, whereby the former impliedly agrees to pay the draft if the person drawn upon does not. His obligation is that of a surety or first endorser. To fix responsibility upon the drawer, the holder of the draft must promptly pre