of equity law. I have done my part. I choose to live now at my ease, and to be prepared for the approaching infirmities of age. On reviewing what I have written, I had thoughts of burning it. I speak of myself so entirely, and it is entirely against my habit or taste. But I see no other way fairly to meet your desires. I am with great respect and good wishes, Your most obedient servant, JAMES KENT. Characteristics, and Essential Requisites of Negotiable Bills and Notes. 1 §. An instrument is called negotiable when the legal title to the instrument itself, and to the whole amount of money expressed upon its face may be transferred from one to another by indorsement and delivery by the holder, or by delivery only. The peculiarities which attach to negotiable paper are the growth of time, and were acceded for the benefit of trade. It was a rule of the Common Law of England that a chose in action-by which is meant a claim which the holder would be driven to his action at law to recover-could not be assigned to a stranger, our forefathers conceiving that if claims and debts could be assigned, the wealthy and powerful would purchase them and sue the debtors, whereby "rights might be trodden down and the weak oppressed." The first relaxation of this rule was made in respect to bills of exchange, and was gradually extended to notes and other securities, until the rule itself disappeared. But while all choses in action are now transferable, the negotiable instrument is the only species which carries by transfer, a clear title and a full measure. It has then, still, two distinguishing characteristics. First, Respecting the title. If a horse, or other personal chattel, or a non-negotiable instrument, be stolen, no purchaser, however innocent or ignorant of the theft, can acquire title against the true owner, who may at any place, and at any time, identify his property and reclaim it. But if a negotiable instrument be stolen, and transferred by the thief to a third person in the usual course of business, before maturity, and for a valuable consideration, the person so acquiring it may hold it against the world. Second, Respecting the amount. If a bond or non-negotiable note be assigned, the assignee steps into the shoes of the assignor, and if the bond, or note, has been paid, or is subject to any counterclaim or set-off, against the original maker, they attach to and encumber it into whosoever hands it may fall. But a negotiable note carries the right to the whole amount it secures on its face, and is subject to none of the defenses which might have been made between the original, or intervening parties, against any one who acquired it in the usual course of business before maturity. It is a circulating credit like the currency of the country, and, before maturity, the genuineness and solvency of the parties are alone to be considered in determining its value. It has been fitly termed "a courier without luggage." There is a single exception to these propositions, and that arises when the original consideration of the bill or note was such as the law declares void, i. e., an usurious, or gaming debt. In such cases the original taint adheres to the paper wherever it goes, and utterly invalidates it. § 2. A Bill of Exchange is an open letter addressed by one person to a second, directing him to pay absolutely and at all events, a certain sum of money therein named, to a third person, or to any other to whom that third person may order it to be paid, or it may be payable to bearer, or to the drawer himself. Abram, who draws the bill, is called the drawer; Benjamin, to whom it is directed, is called the drawee, and, upon accepting it, becomes the acceptor. Charles, to whom the bill is made payable, is called the payee. If the bill be payable to "Charles only," he can not transfer it; but if payable to "Charles or order," he may, by indorsing it, direct that it be paid to David, and in that case Charles becomes the indorser, and David the indorsee. § 3. A Promissory Note, or note of hand, as it is often called, is an open engagement in writing by one person to pay another person therein named, or to his order, or to bearer, a specified sum of money absolutely and at all events. Abram, who makes the note, is called the maker; Benjamin, to whom the promise is made to pay, the payee; and if the note is transferred from Benjamin to Charles, they are termed respectively indorser and indorsee. The maker of a note is sometimes termed the drawer, and in accommodation indorsements the indorser frequently writes over his name: "credit drawer." When the term "drawer" is so used, the maker is of course meant, though not accurately described. "Holder" is a general word applied to any one in actual or constructive possession of the bill or note, and entitled at law to recover or receive its contents from the parties to it. 1 Overton vs. Tyler, 3 Barr., 346. 4. In their original structure, a Bill of Exchange and Promissory note do not strongly resemble each other. In a Bill there are three original parties: Drawer, Drawee and Payee; in a Note only two: Maker and Payee. In a Bill the acceptor is the primary debtor. In a Note the maker is the only debtor. But if the note be transferred to a third party by the payee, it becomes strikingly similar to a bill. The indorser becomes then, as it were, the drawer, the maker the acceptor, and the indorsee the payee. The reader, bearing this similitude in mind, will easily be able to apply to notes the decisions hereinafter cited, concerning bills, and vice versa. § 5. Bills of Exchange are either inland or foreign-foreign when drawn in one State or country and made payable in another State or country, otherwise inland. In their mercantile relations the States of the "United States" are foreign, and therefore a bill drawn in Richmond, Virginia, on a merchant of Baltimore, Maryland, is a foreign bill-that is if payable in Baltimore also, for if payable in Richmond the acceptance in Baltimore would not change its inland character. If both drawer and drawee reside in the same State or country, and the bill be payable in another, it will be a foreign bill. Thus in the case of the Bank U. S. vs. Daniel, 12 Pet., 32, where the drawer and drawee resided in Kentucky, and the bill was made payable in New Orleans, the Supreme Court of the United States said "that the place of payment being in a jurisdiction foreign to Kentucky subjected the acceptor, James Daniel, to the performance of the contract, according to the laws of Louisiana, to every extent he would have been had he become a party to the bill at New Orleans." The Court of Appeals of Virginia, in Brown vs. Ferguson, 4 Leigh, 37, held that a bill drawn by a Baltimore merchant on a Virginia firm "was by the law merchant, a foreign bill, for as to such bills the several States of the Union are foreign to each other." § 6. The distinction between foreign and inland bills is important, as the nature of the instrument determines the measure of interest and damages in case of dishonor. It is a well settled principle. of law that every contract, as to its validity, nature, interpretation and effect, as they may be called the right in contradistinction to the remedy, is governed by the law of the place where it is made, unless 1 Miller . Hackley, 5 John., 375; Duncan vs. Course, 1 So. Car., 100; Phoenix Bank 18. Hussey, 12 Pick., 483; State Bank vs. Hayes, 3 Ind., 400; Buckner vs. Finley, 2 Peters., 586; Teconic Bank vs. Stackpole, 41 Maine, 302. 2 Amner vs. Clark, 2 C. M. & R., 468. it is to be performed in another place, and then it is to be governed by the law of the place where it is to be performed. Therefore, a bill or note made in one State, and payable in another, has its characteristics determined by the law of the State wherein it is to be paid.1 The mere signing a blank paper does not create a contract; and there is no contract until the blank is filled up and the instrument delivered. Accordingly, where a note was dated and signed in blank in Virginia, and then sent to Maryland, where it was filled up and completed, it was held a Maryland contract to be governed by its laws.2 $ 7. Bills of Exchange derive their peculiar properties from the custom of merchants; and, in England, Promissory Notes from statutes 3 and 4 Anne, Cap. 9, which places them on the same footing. as bills. That act, which has been copied substantially in many of the American States, grew out of the refusal of Lord Holt to recognize them as negotiable-his Lordship opposing the idea of their negotiability on the ground that "it proceeded from the obstinacy and opinionativeness of the merchants, who were endeavoring to set the law of Lombard Street above the law of Westminster Hall": Clerk vs. Martin, 2 Ld. Ray'd, 757. The peculiar liabilities which attach to parties to bills and negotiable notes grew out of the customs of the merchants, who persistently asserted them until they were fully recognized by the Courts; and the system of rules which governs mercantile contracts is termed the "Law Merchant," deriving its name from the merchants who formed it. 1 Fant vs. Miller, 17 Grat., 47; Wilson vs. Lazier, 11 Grat., 477; Freeman's Bank vs. Ruckman, 16 Grat., 127; Nichols, Ex'r., vs. Porter, 2 Hagan, 13; Story Conf. Laws, 242, 260, 263, 280; Vidal vs. Thompson, 11 Martin, 23. 2 Fant rs. Miller, 17 Grat., 47; Cook rs. Haffett, 5 Howard, 295; Lawrence vs. Bassett, 5 Allen, 140. 3 The Statute of Anne (3 and 4 Anne, c. 9) provides: "That all notes in writing that shall be made and signed by any person, &c., whereby such person, &c., shall promise to pay to any other person, his, her, or their order, or unto bearer, any sum of money mentioned in such note, shall be taken and construed to be, by virtue thereof, due and payable to any such person, &c., to whom the same is made payable; and also every such note payable to any person, &c., his, her, or their order, shall be assignable or indorsable over, in the same manner as inland Bills of Exchange are or may be, according to the custom of merchants; and that the persons, &c., to whom such sum of money is or shall be by such note made payable, shall and may maintain an action for the same, in such manner as he, she, or they, might do upon any inland |