Page:The American Cyclopædia (1879) Volume XII.djvu/220

212 NEGOTIABLE PAPER out looking to see if at the time it is clear ; or where the engineer on a railway train drives it furiously through a town without sounding signals, or occupies the track in the time of an approaching train without taking steps to ascertain whether he may do so with safety. If in any of these cases death results from the negligence, the reckless and wanton conduct will stand for criminal intent; and in any case of a clear duty imposed by law, if death result from a neglect of the duty, it will be accounted criminal homicide. (See HOMICIDE, and MANSLATTGHTEB.) The legal aspects of negligence have recently been fully considered in the valuable treatises of Shear- man and Red field (New York), and Francis Wharton (Philadelphia). NEGOTIABLE PAPER. In the article EX- CHANGE, BILL OF, some of the general rules of the law of negotiable paper have been stated. In explanation of the central principle and foundation of this very peculiar system of law, we will briefly consider its origin and history. The earliest commerce must have been by bar- ter, and therefore limited to the exchange of superfluities between neighbors. Then money was invented and used as the representative of all value and all property ; and he who had anything to spare could exchange it for mon- ey, in which its value was vested, and this val- ue could be retained by him who held it until he wished to exchange it for something he needed to use. It was an immense step thus to obtain a representative of all value ; and the utility of it grew with the increasing commerce of the world, and was found adequate to the wants of this commerce until a few centuries ago, when the next step was taken, and some- thing was found which is the representative of the representative of all value ; and to this last invention the enormous increase of commerce since it came into use must be ascribed. As a bag of coin represented the value of 100 oxen, now a strip of paper represents the value of barrels of gold. But while the principal bene- fit of negotiable paper is due to the fact of this perfect representation of all value, there are two other utilities attached to it of almost equal importance. One of these is the facil- ity it offers for paying distant debts without transfer of money or property, by making debts in one place pay debts in another, through the instrumentality of bills of ex- change. The other is the method it offers of accumulating credit and employing the whole mass as money by means of successive indorse- ments. The origin of bills of exchange has been accounted for on various theories, each having perhaps some basis in truth; but when it has been stated that some six centuries ago they came into general use in Europe, little more can be said with certainty. Negotiable notes were not used until much later, and not until the statute of 3 and 4 Anne, ch. 9, which enacted that they should be "assignable and indorsable over in the same manner as inland bills of exchange are or may be by the custom of merchants," was their negotiability fully recognized by the courts. In the article al- ready referred to the chief incidents of negotia- bility were explained, namely : that when the paper is duly assigned the assignee is entitled to maintain suit upon it in his own name, and also may recover the sum promised to be paid by it notwithstanding there might have been defences to it in the hands of the assignor which would have precluded a recovery by him. Let us see, then, of what paper this quality of negotiability may be predicated. In the first place, independent of statute or of recent usages (which we shall refer to further on), it must be either a bill of exchange or a promissory note, which instruments are sufficiently explained under those heads. In the next place, if a bill of exchange, it must direct the person upon whom it is drawn to pay the sum of money therein specified to a person named (who is then called the payee), or to his order; and if a promissory note, it must promise to pay the sum specified to some person named or his order, or it may promise to make payment to the bearer, without naming any person whom- soever. In the case last mentioned the note is in contemplation of law payable to any one who may lawfully become the owner thereof, and it is assigned from hand to hand by mere delivery, and any person receiving delivery on a purchase thereof may enforce payment as bearer. With a bill or note payable to the order of a person named it is different. Be- fore it has been assigned or negotiated only the payee can demand the money or bring suit; but the payee may assign it by writing his name upon the back, which is called an indorse- ment, and by delivering it to the intended as- signee. There are several methods of making this indorsement, and one or another will be resorted to according to circumstances. If nothing more is written upon the back of the paper than the indorser's name, this is called a general indorsement, and it is equivalent in legal effect to a direction to the drawee or maker to pay the bill or note to the bearer thereof. The disadvantage of this is that in case the paper should be lost or stolen the finder or thief would have upon it the evidence of a prima facie right to receive and collect the money, and he or his assignee, under the rules laid down further on, might actually suc- ceed in making collection to the exclusion of the real owner. To guard against such possi- ble consequences, the payee in assigning may order the payment to be made to a person named, thus : " Pay A. B. or order;" and this being signed by him and delivered to A.' B., who is thus made indorsee, the paper is pay- able to the indorsee only so long as he does not order it paid to any other person ; but if he by a like indorsement shall order it paid to the order of another person named, the latter, until he shall give a similar order, becomes the only person entitled to demand and receive