Three months after date, I promise to pay to James Smith, or bearer, one hundred dollars, value received.

John Brown.

--2. A note thus payable to Smith or bearer, or to him or his order, is called _negotiable_, because it may be sold or transferred to any other person, who has the same power to sue for and collect the money, as Smith, the original promisee. If it were made payable to Smith _or order_, he must indorse it by writing his name on the back of it, before it would pa.s.s as a negotiable note. The indors.e.m.e.nt is considered as the order of Smith to the maker to pay it to any other person. But, though not negotiable, it might be transferred; but the holder must sue in the name of Smith, and Brown might offset any demands which he has against Smith.

--3. An indors.e.m.e.nt, made by writing the name only on the back of a note, is called a _blank_ indors.e.m.e.nt. A full indors.e.m.e.nt is one which points out the person to whom the note is to be paid. A blank indors.e.m.e.nt may be filled up at any time by the holder. For example: A note is payable to "John Jay or order," or to "the order of John Jay," who indorses it in blank which makes it payable to any other holder. Now if any holder or indorsee wishes it paid to any particular person, he fills up the blank by writing a request to that effect above the name of the indorser, thus: "Pay to George Bruce," or "Pay to George Bruce or order;" who, again, may by indors.e.m.e.nt order it paid to some particular person. Or, if he should indorse it in blank, or order it paid "to the _bearer_," it would again pa.s.s, as at first, by mere delivery.

--4. In common business transactions in the country, notes intended to be negotiable are usually made payable to bearer, as in the form given.

(--1.) The young reader, or other person inexperienced in business, may not know why they are not always so written. The making of a note payable to order protects the holder or owner in case the note should be lost. Take, for example, the note supposed in the preceding section, indorsed in blank. Suppose the owner resides in Buffalo, and the maker in Detroit. The owner writes over the name of John Jay, "Pay to George Bruce," also residing in Detroit, to whom it is sent by mail, to be by him presented to the maker for payment. And should the note by accident or fraud fall into the hands of another, it being payable to Bruce only, or to his order, the parties are protected from loss.

--5. As a contract is not binding without a valuable consideration, (Chap. LIV, --6,) the words "value received" are inserted in notes, as evidence of such consideration. But where there is no statute requiring the insertion of these words, a note is good without them. Whether they are inserted or not, the note is presumed to have been given for a valuable consideration; and the maker, to avoid his obligation to pay it, must make it appear that no value was received.

--6. A note made by two or more persons may be joint or joint or several.

When it is written, "We promise to pay," it is only a joint note, and all must be sued together. If written, "We jointly and severally promise to pay," they may be sued either jointly or separately. Also if written "I promise to pay," it is treated as a joint and several note. A note written, "We promise," and signed, A. B., princ.i.p.al, and C. D., security, is the joint note of both; and if written, "I promise," and signed in the same manner, it is the joint and several note of both.

--7. Any person having in possession a negotiable note, though a mere agent, is deemed the true owner, and may sue it in his own name, without showing t.i.tle. The _bona fide_ holder can recover upon the paper, though it came to him from a person who had stolen or robbed it from the true owner; provided he took it innocently in the course of trade for a valuable consideration before it was due, and with due caution. But if suspicion is cast upon the t.i.tle of the holder, by showing that the instrument has got into circulation by force or fraud, then the holder must show the consideration he gave for it.

--8. Ordinarily, a person can not convey to another a valid t.i.tle to property which is not lawfully his own; and hence the purchaser of stolen goods must give them up to the lawful owner. The exception to this rule, in the case of promissory notes, seems to be founded in reason and good policy. The use of negotiable paper in commercial transactions is of great public convenience; and it is proper that, for the sake of trade, protection should be given to the holder of such paper who receives it fairly in the way of business, though it has been paid, if he received it before it fell due.

--9. But it is equally material for the interests of trade, that the owner should have due protection. Hence if a person takes a note from a stranger without inquiring how he came by it; or does not take it in the usual course of business, or for some responsibility incurred on the credit of the note, he takes it at his peril. But the owner, in order to place his right to relief beyond question, ought to use diligence in apprising the public of the loss of the note.

--10. A person buying a note after it has become due, takes it at his peril. Although the holder may sue it in his own name, the maker may offset any demands which he had against the promisee before it was transferred, as in the case of notes not negotiable. (--2.) But when notes in which no day of payment is expressed comes under this rule, is a question to be determined by circ.u.mstances. In New Jersey and Pennsylvania, the words "without defalcation or discount," or words to that effect, must be inserted in notes, or they may be met by offsets as notes that are bought after due.

--11. A note made payable in some commodity is not negotiable. If it is not paid according to the conditions therein expressed, the maker becomes liable to pay in cash. But in either case, if it pa.s.ses to a third person, he can sue it only in the name of the promisee or payee; and it may be met by offsets as other notes not negotiable, (--2,) and notes bought after due. (--10.)

--12. Notes payable _on demand_, or in which no time of payment is mentioned, are due immediately, and no demand of payment is necessary.

But a note payable _at sight_, or at a specified time after sight, must be presented for payment before it can be sued. If the words "with interest" are omitted, interest commences at the time the note becomes due. If payable on demand, it will draw interest from the time when payment is demanded.

--13. After the day on which a note is made payable, the maker has three days in which to make payment, which are called _days of grace_. Hence, a note payable on the first day of the month is not due and suable until the fourth. If, however, the last day of grace falls on Sunday, or the fourth of July, or any other day recognized by law as a holiday, or day of public rest, the last day of grace would be a day earlier. If the fourth of July or any other holiday should come on Sat.u.r.day, the note would be due on Friday. Or if such day should fall on Monday, the last day of grace would be Sat.u.r.day.

--14. To hold the indorser of a note responsible, payment must be demanded of the maker on the last day of grace. As to the time of day when the demand should be made, it is considered that the maker is ent.i.tled to the latest convenient time within the customary business hours of the place where the note is presented.

--15. If payment has been demanded and refused, notice thereof must be given to the indorser; and one entire day is allowed the holder to give the notice. If the demand is made on Sat.u.r.day, it is sufficient to give notice on Monday. If the indorser resides in the same town, he may be notified personally by the holder, or by a messenger sent to his dwelling-house, where notice may be given personally, or left in a way likely to bring it to his knowledge. If the parties reside in different towns, notice may be sent by mail; in which case, the notice must be put into the post-office, as early as the next day after the last day of grace, so as to be forwarded as soon as possible thereafter: or notice may be sent by a private conveyance or a special messenger.

--16. If, in consequence of the removal of the maker before the note becomes due, or from any other cause, his residence is unknown, the holder must make endeavors to find it, and make the demand there; though, if he has removed out of the state, it is sufficient to present the note at his former place of residence. If the maker has absconded, that will, as a general rule, excuse the demand.

--17. Notes, on being transferred, are guarantied by indors.e.m.e.nt. If a person simply writes his name on the back, he is liable as indorser only. If he guarantees "the payment of the note," he is generally considered liable as an original promisor. If he guaranties the note "good," or "collectable," the maker, and the indorsers also, if any, must be sued, before the guarantor is liable. Strict notice to a guarantor is not required to bind him, as in the case of an indorser.

But to hold him liable in case immediate notice is not given, or the note is not immediately sued, it must be shown that he has not suffered injury from want of notice, or that the note was not collectable of the maker or indorsers when due. But the kind of liability incurred, whether that of indorser, original promisor, or surety, by indorsing a note or guarantying payment, is not the same in all the states. There are sundry other points in the law relating to promissory notes, on which the statutes and judicial decisions are not uniform in all the states.

Chapter LXI.

Bills of Exchange; Interest; Usury.

--1. A bill _of exchange_ is a written order or request to a person in a distant place, to pay a third person a certain sum of money. The following is a common form:

$1,000. New-York, August 10, 1859.

Twenty days after date, (or at sight, or ten days after sight,) pay to the order of John Stiles, one thousand dollars, value received, and charge the same to account of

To George Scott, Thomas Jones.

New Orleans, La.

--2. Bills drawn on persons in foreign countries, are called _foreign_ bills of exchange; those drawn on persons in distant places in our own country, are called _inland_ bills of exchange. To persons in mercantile business they are of great convenience, as will be seen from the following example of their nature and operation.

--3. A, in New-York, has $1,000 due him from B, in New Orleans. A draws an order on B for that sum, and C, who is going to New Orleans, pays A the money, takes the order, and receives his money again of B. Thus A is accommodated by receiving his debt against B, and O has avoided the risk of carrying the money from place to place. A, who draws the order, or bill, is called the _drawer_. B, to whom it is addressed, is the _drawee_; C, to whom it is made payable, is the _payee_. As the bill is payable to C, or his order, he may, by indorsment, direct the bill to be paid to D; in which case C becomes the _indorser_, and D, to whom the bill is indorsed, is called the _indorsee_ or _holder_.

--4. If, when a bill is presented to the drawee, he agrees to pay it, he is said to _accept_ the bill, and writes his acceptance upon it. An acceptance may, however, be by parol. The acceptor of a bill is the princ.i.p.al debtor; the drawer, the surety. The acceptor is bound, though he accepted without consideration, and for the sole accommodation of the drawer. But payment must be demanded on the last day of grace; and, if refused, notice of non-payment must be given to the drawer, as in the case of an indorsed promissory note. (Chap. LX, --15.)

--5. No precise time is fixed by law at which bills payable at sight or a certain number of days after sight, must be presented to the drawee for acceptance; though an unreasonable delay might discharge the drawer. A bill payable on a certain day after date, need not be presented before the day of payment, but if presented before due, and acceptance is refused, it is dishonored; and notice must be given immediately to the drawer. If a bill has been accepted, payment must be demanded of the acceptor, when the bill falls due; and if no place is appointed for payment, the demand must be made at his house or residence, or upon him personally.

--6. A check upon a bank, (Chap. XXIV, --3,) is another kind of negotiable paper. It partakes more of the nature of a bill of exchange than of a promissory note. It is not a direct promise to pay; but it is an undertaking, by the drawer, that the drawee shall accept and pay; and the drawer is answerable only when the drawee fails to pay. A check payable to bearer pa.s.ses by delivery; and the bearer may sue on it as on an inland bill of exchange.

--7. When a foreign bill of exchange is to be presented for acceptance or payment, demand is usually made by a _notary public_; and in case of refusal, his certificate of the presentment of the bill and of the refusal, is legal proof of the fact in any court. This certificate is called _protest_, which means, _for proof_. A protest may be noted on the day of the demand; though it may be drawn up in form at a future period. Notaries are appointed in all towns and cities of commercial importance.

--8. A protest of an inland bill of exchange is not generally deemed necessary in this country; though it is the practice to have bills, drawn in one state on persons in another, protested by a notary. No protest is legal evidence in court, except in the case of a foreign bill. Yet it is expedient, in many cases of inland bills, to employ notaries when evidence is to be preserved, because they are easily found when wanted as witnesses. In some states, bills drawn in one state and payable in another, are deemed foreign bills; and their protest as such is required. Notes payable at banks are also protested for non-payment.

--9. _Interest_ is a premium paid for the use of money, or a profit per cent, received for money lent, or on an unpaid demand. Thus a person lends $1,000 to another person, who pays for the use of it six per cent, a year, or $6 for every hundred, as interest. The rate of interest is fixed by a law of the state.

--10. The established lawful rates of interest in the several states are as follows: _Six_ per cent, in all but the following: In New-York, Michigan, Wisconsin, Minnesota, _seven_ per cent.; in Alabama and Texas _eight_ per cent.; in Louisiana, _five_ per cent.; bank interest _six_; in California, _ten_ per cent. But there may be taken by special agreement, in Florida and Louisiana, _eight_ per cent.; in Mississippi, Arkansas, Ohio, Missouri, Iowa, _ten_; in Texas and Wisconsin, _twelve_; in Minnesota and California, any rate. In Illinois and Michigan, for money loaned, it may be _ten_. In Mississippi, for the _bona fide_ use of money _eight_ per cent.

--11. A rate of interest beyond that which is established by law, is _usury_. Not only can no more be collected on any contract or obligation than the legal rate, but in most of the states there is some forfeiture for taking usurious interest. In a few, the obligation is void, and the payment of no part of the debt can be enforced by law; in others, twice or thrice the excess above the lawful interest is forfeited; and in some, only the excess paid can be recovered.

Chapter LXII.

Crimes and Misdemeanors.

--1. The statutes of each state define the crimes of which its laws take cognizance. The definitions given in this chapter, agree substantially, it is presumed, with those of similar crimes in every state in the union. The statutes also prescribe the penalties, which are not precisely the same in all the states. Nor is there in any state an equal measure of punishment inflicted in all cases for the same offense. The laws usually declare the longest and the shortest terms of imprisonment, and the highest and lowest fines, leaving the exact measure of punishment, except for crimes punishable by death, to the discretion of the judges, to be fixed according to the aggravation of the offense.

--2. The laws of the several states differ in respect to the number of crimes made punishable by death. In some states the penalty of death is annexed to the crime of murder only. Treason is punishable by death; but as this offense is defined and made punishable by the laws of the United States, not all the states take cognizance of it. If committed in such states, it is tried in the courts of the United States. In New York, murder, treason, and arson in the first degree, are punishable by death.

Few states make more than these crimes thus punishable. In two or three states, the penalty of death has been abolished, and imprisonment for life subst.i.tuted.

--3. Crimes punishable by death, are called _capital_ crimes, and their punishment is called _capital_ punishment. The word capital is from the Latin _caput_, which means head; and so has come to signify the highest or princ.i.p.al. Hence, probably, the application of the word capital to the princ.i.p.al crimes receiving the highest punishment, which was formerly practiced extensively in other countries by beheading or _decapitating_ the criminals.

--4. _Treason_ is defined by statute to be, levying war in any state against the people of the state; or a combination of two or more persons, attempting by force to usurp or overturn the government of the state; or in adhering to enemies of the state while separately engaged in war with a foreign enemy, and giving them aid and comfort.

--5. _Murder_ is the killing of a person deliberately and maliciously, and with intent to effect death; or killing a person in committing some other crime, though not with a design to effect death; or in killing a person purposely and without previous deliberation. The less aggravated cases of murder, are in some states distinguished as murder in the second degree, and punished by imprisonment for a long term, or for life.