§ 13. The English Courts have not yet treated corporation bonds, or debentures, as they call them, as strictly negotiable: Anthaneum Life Insurance Co. vs. Pooley, 5 Jur., N. 3, 129; Bulfour vs. Earnest, 5 Jur. N. S., 439; 2 Redfield on Railroads, 606; Am. Law Reg., N. S., vol. II., 596. But the current of authority and opinion is gradually working in that direction, and will, in time, assert their commercial character.

In 1811, the Court of King's Bench having expressed strong doubt whether a bona fide purchaser for value of bonds of the East India Company would be protected against a former owner, from whom they had been obtained by fraud or theft, upon the ground that being choses in action they were not assignable at law; and that the purchaser acquired no legal title: Glyn vs. Baker, 13 East, 510. Parliament immediately enacted that such bonds should be assignable and transferable by delivery, and that the money secured by, and the property in them, should be absolutely vested in the assignee at law, as well as in equity: 51 Geo. III., Ch. 64. Soon after it was held that an Exchequer Bill, passed by delivery, and that the property vested in a bona fide holder: Wookey vs. Pole, 4 B. and Ald., 1. See, also, Brandao vs. Barnett, 1 Man., and G., 908. Subsequently, the same doctrine was applied to Prussian bonds, payable to the holder: Gergier vs. Melville, 3 B. and C., 45; and later still, it was left to a jury to determine whether Neapolitan bonds, with coupons, passed in like manner: Lang vs. Smith, 7 Bing., 284.

As the financiers and capitalists of England become more deeply interested in corporation investments, which are daily increasing in number and importance, who will doubt that they will finally, either from Parliament or the Bench, obtain the declaration that "a mere technical dogma of the Courts of Common Law shall rot prohibit the commercial world from inventing or using any species of security not known in the last century," already enunciated from the Supreme Bench of the United States. J. W. D.

Summary of the Law of Bank Checks.

1. A check is a draft or order on a bank or banking-house, directing it to pay a certain sum of money.'

It is, in legal effect, a bill of exchange, drawn on a bank or banking-house, with some peculiarities; and the expression that a check is like a bill, has been criticised on the ground that “nullum simile est idem," whereas "checks are bills, or, rather, bill is the genus and check is a species." And it has been suggested that when drawn in one State and payable in another it would be subject to damages like a foreign bill.*

It would be useless to enter into such subtle refinements-let us discuss the real properties of checks, and see how far they are governed by the rules which govern bills.

2. In the late case of the Merchants' Bank vs. State Bank, 10 Wallace, 647, the Supreme Court thus sums up the qualities of a check, and the differences between it and a bill:

"Bank checks are not inland bills of exchange, but have many of the properties of such commercial paper, and many of the rules of law merchant are alike applicable to both.

"Each is for a specific sum, payable in money. In both cases there is a drawer, drawee, and payee. Without acceptance no action can be maintained by the holder upon either, against the drawer.

"The chief points of difference are that (1) a check is always drawn on a bank or banker. (2) No days of grace are allowed. () The drawer is not discharged by the laches of the holder in presentment for payment, unless he can show that he has sustained some injury by the default. (4) It is not due until payment is demanded, and the statute of limitations runs only from that time. (5) It is by its

12 Parsons, N. & B., 57.

Billgerry 8. Branch, 19 Grat, 418; Byles on Bills (Sharswood's ed.); Matter of Brown, 2 Story, C. C. R., 502; Cruger vs. Armstrong, 3 Johns. Cas., 5; Boehm vs. Sterling, 7 T. R., 423; Keene vs. Beard, 8 C. B., N. S., 372 (98 E. C. L. R.).

3 Harker vs. Anderson, 21 Wendell, 372.

4 Id.

face the appropriation of so much money of the drawer in the hands of the drawee to the payment of an admitted liability of the drawer. (6) It is not necessary that the drawer of a bill should have funds in the hands of the drawee. A check in such case would be a fraud. Another material difference is that in the case of a check the drawer, like the maker of a note, and unlike the drawer of a bill, is the principal debtor; and a check, strictly speaking, is always understood to be payable on demand, though that does not expressly appear upon its face.3

3. It is frequently said that a check must be payable to bearer, but it is as well settled as any principle of commercial law, that a check may be payable to a certain person only; or to him or his order; or to order of self; or to bearer; and may be transferred by indorsement or assignment (as the case may be) in like manner and to the like effect as a bill. Checks are sometimes drawn payable "to the order of bills payable," or to the order of a certain number, or by some such phrase to express that negotiability which only exists in connection with the word "order." But as such a check can not be indorsed by any party, it has been held to be a check payable to bearer, and transferable by delivery."

4. A check, like a bill or note, in order to be negotiable must be payable absolutely, and, at all events, to a certain person or order, or to bearer, in money. If expressed to be payable “in bank bills,” or "in currency," or if it lack words of negotiability, or be deficient in any of the characteristics which impart negotiability to bills and notes, it will not be a negotiable instrument. Checks are sometimes,

1 Alexander vs. Burchfield, 7 Man. & G., 1067; Boehm vs. Sterling, 7 Term. R., 430; Serle vs. Norton, 2 Mood. & Rob., 404; Keene vs. Beard, 8 C. B. N. S, 373. 2Kent Com., 104.

3 Bowen vs. Newell, 4 Selden, 190; Harker vs. Anderson, 21 Wend., 372; Brown es. Lusk, 4 Yerger, 210; Matter of Brown, 2 Story, 502; Edwards on Bills and Notes, 58.

Byles on Bills (Sharswood's ed.), p. 84; Chitty on Bills, p. 545; Woodruff vs. Merchants' Bank, 25 Wend., 672.

Billgerry vs. Branch, 19 Grat., 418; Matter of Brown, 2 Story, 502; Cruger v3. Armstrong, 3 Johns. Cas., 5; Elting vs. Brinkerhoff, 2 Hall, 459; Story on Promissory Notes, 2488.

"Willet vs. Phoenix Bank, 2 Duer., 121.

"Bank of Mobile vs. Brunn, 42 Ala., 108; Little vs. Phoenix Bank, 2 Hill (N. Y.), 425.

Partridge vs. Bank of England, 9 Q. B., 396.

although by no means usually, intended for temporary circulation; but their principal object and purpose is to enable the holder to demand and receive immediately the amount called for. Negotiability, in its full sense, is, therefore, not of their essence, but an optional quality.'

In Virginia checks are regulated by the statutory provisions which apply alike to bills and notes, even as respecting protest, and negotiable, if payable, (1) at a particular bank or (2) at a particular place thereof, for discount or deposit, or (3) at the place of business of a savings institution or savings bank, or (4) at the place of business of a licensed broker. Code, chap. 144, § 7, Acts 186, p. 149. 5. While a check is regarded as an appropriation of so much of the fund on which it is drawn as will pay it, as between the drawer and payee it can not operate as an assignment, so far as the bank and third parties are concerned until accepted, and the verbal assent of the cashier, when absent from the bank, has been held not equivalent to acceptance; but the circumstance that the cashier was absent from his banking-house when he certified checks as good was considered immaterial in Merchants' Bank vs. State Bank, 10 Wallace, 651.

But after drawing a check the drawer can not withdraw the funds; and while the holder of the check can not sue the bank upon it without acceptance on its part, as there is nothing in the check itself to import liability on the part of the bank to pay it, yet the bank would be liable to the holder, if by its improper refusal he lost the

'Mohawk Bank vs. Broderick, 10 Wend., 304.

"Matter of Brown, 2 Story, 502; Robinson vs. Hawks, 9 Q. B., 52.

Mandeville us. Welch, 5 Wheat., 286; Chapman vs. White, 2 Selden, 412; Cowperthwaite vs. Sheffield, 3 Comstock, 243; Dykers vs. Leather Man. Bank, 11 Paige, 612; Tate vs. Hilbert, 2 Ves., Jr., 111; Harris vs. Clark, 2 Barbour. 94; St. Johns vs Hemans, 8 Mo., 382; Levy vs. Cavanagh, 2 Bosw., 100; Butterworth vs. Peck, 5 Bosw., 341; Lunt vs. Bank of N. America, 49 Barb., 24; Bellamy vs. Majoribanks, 8 Eng. L. and Eq., 513; Warwick vs. Rogers, 5 Man, and G., 310; Sims vs. Bond, 5 B. and Ad., 389.

'Bullard vs. Randall, 1 Gray, 605.

Convoy vs. Warren, 3 Johns. Cas., 259; Chapman vs. White, 2 Selden, 412.

6 Bank of Republic vs. Millard, 10 Wallace, 152; Wharton vs. Walker, 4 B. & C., 163; See also, Wharton vs. Walker, 4 Barn. C., 163; contra Chicago 2, N. S. Co. v3. Stanford, 28 Ill.; Fogarties vs. State Bank, 12 Richardson, (Law, 518:)

See contra, Chicago Insurance Co. vs. Stanford, 28 Illinois, 168; Fogarties vs. State Bank, 12 Richardson (Law), 518.

amount or suffered damage, and likewise liable to the drawer having sufficient funds in an action of tort for the wrong done, or in assumpsit for breach of the implied contract to pay it.1

But if the funds at the bankers have been appropriated to meet a bill or note payable there, though without any further authority, it is a sufficient defense for dishonoring a check, for the law will presume that the funds were deposited to meet the bill or note there payable."

6. In Bank of Republic vs. Millard, 10 Wallace, 157, the United States Supreme Court said: "It may be, if it could be shown that the bank had charged the check on its books against the drawer, and settled with him on that basis, that the plaintiff could recover on the count for money had and received, on the ground that the rule ex aequo et bono would be applicable, as the bank, having assented to the order, and communicated its assent to the paymaster, (the drawer), would be considered as holding the money to the plaintiff's use; and therefore under an implied promise to pay it on demand."

There may, also, be cases where in Equity a check might operate as an assignment to the holder; as in case of the death of the drawer and the consequent revocation of the banker's authority to pay, the holder may have relief in Equity against the banker.

7. A check paid and held by a bank is no evidence of money loaned by it to the drawer; but on the contrary, of money previously deposited and drawn out by the drawer.1 If one holds an unpaid check which has not been presented, it would not be evidence of the drawer's indebtedness, but if presented and payment refused, it would be otherwise.

If a check payable to a party or order, and bearing his indorsement, be held in possession by the drawer after payment by the Bank, it is as good a receipt that the money has been paid as the

'Bank of Republic vs. Millard, 10 Wallace, 152; Tassell vs. Cooper, 9 C. B., 109; Marzetti vs. Williams, 1 B. and A., 415; Rolin vs. Stewart, 14 C. B., 595; 2 Parsons, N. and B., 61-63; Cumming vs. Shand, 20 L. J., Exch., 129.

"Thatcher vs. Bank, 5 Sandf., 121; Keymer vs. Laurie, 18 L. J., Q. B., 218. "Rodick vs. Gandelle, 12 Beavan, 325, 1 Delg., M. and G., 763.

Conway vs. Case, 22 Ill., 127; Lancaster Bank vs. Woodward, 18 Penn. State, 361; Thurman vs. Van Brunt, 19 Barb., 409; Healy vs. Gilman, 1 Bosw., 235; Fletcher vs. Manning, 12 M. & W., 571.

"Flemming vs. McLain, 13 Penn. State, 177; Baker vs. Williamson, 4 Penn. State, 177. Aubert vs. Walsh, 4 Taunt., 293; Pearce vs. Davis, 1 Mood & R, 365; Cary vs. Gerrish, 4 Esp., 9.