.

the principles of which are laid down in the German Commercial Code of 1861. *

To the first named category belong Egypt, Belgium, St. Domingo, Greece, Haiti, the Netherlands and her Colonies, British Canada, Malta, Mauritius, Italy, Monaco, Roumania, Polish Russia, the French Cantons of Switzerland, Servia, Turkey, Spain and her Colonies, Portugal and her Colonies, Mexico, Brazil, Peru, and the Spanish speaking Republics of South America. The principles of the German Commercial Code. are generally admitted, outside the Empire, with regard to bills of exchange (Law of 1848), by Austria, by Russia for Finland, by Sweden and the German Cantons of Switzerland. Great Britain and her Possessions, (with the exception of those named above), have special laws and usages with regard to bills of exchange; this is also the case with the United States of America. Russia has her own special Code of Commerce. Special laws regarding bills of exchange exist also in Denmark, in some Swiss Cantons, in Norwegia and Hungary. The old ordinance of Bilbao is yet observed in the American Republics of Guatemala, Honduras and Paraguay.†

The different enactments of positive legislation in matters of bills of exchange are thus divided into two camps of nearly equal strength. The difference consists partly in a divergence of opinion concerning the character and nature of a bill of exchange, partly in certain rules prescribed

* On the German lex mercatoria, see: GOLDSCHMIDT Handbuch des Handelsrechts. Erlangen. 1864. The Conflict of Laws with regard to bills is dealt with at length by BRACKENHÖFFT, in his Archiv für Deutsches Wechselrecht, Vol II, pp. 129-162, 278-301. See also Hoffmann's Ausführl. Erläuterung der Allgemeinen Deutschen Wechselordnung, pp. 597-611.

+ BORCHARDT. Vollständige Sammlung der geltenden Wechsel and Handelsgesetze aller Länder. Berlin 1871. Vorwort,

concerning minor particulars connected with this commercial transaction.

tractus and the lex loci solutionis with regard to Bills of Ex

The rule locus regit actum is generally under- The lex loci constood to govern the form of the bill of exchange at its first issue, but with regard to the application of this rule to the forms of the endorsements change. on the bill, there are two different systems in vogue. The application of the rule locus regit actum is in all instances governed by the principle of the contrat de change of the French Code, by which the formalities of every declaration made on a bill of exchange, viz., that of the drawer, of the endorsers, of the acceptor etc., must be in conformity with the respective laws of the different States in which the bill is negotiated. All endorsements, therefore, made subsequent to any one conflicting with the law of the respective place where it is placed on the bill, and which is consequently void by that law, are all to be regarded as void also, though being, intrinsically, in conformity with the law which governs them individually. The modern or German system, however, deviates from the foregoing rule, and considers a bill of exchange more in its absolute character of a mandate to pay under certain special conditions. At the outset, of course, this mandate must be in conformity with the law of the place whence it originally issues, but the obligation incurred by the acceptance or making of a bill is considered to be determined by the law of the place where it is payable (lex loci solutionis). Under this system, accordingly, irregularities attaching to endorsements under their respective foreign laws, are not taken into consideration, provided the endorsement in question is in harmony with the forms of the lex fori or with the lex loci solutionis.

In the case of the French system, the rule le

loci contractus has the preponderating influence, while in the case of the German system the lex loci solutionis is the principal guide.

With regard to the English laws under this head, it has been established as a general principle in the English Courts, that the liabilities of the drawer, the acceptor and endorser, must be governed by the laws of the countries in which the drawing, acceptance and endorsement respectively took place (lex loci contractus). Under this system an acceptance or endorsement, void by the law of the country where it is made, is not binding where English Law prevails. *

With regard to the laws of the Unites States of America, under the head of lex loci contractus, Story observes that "by the general commercial law, in order to entitle the indorsee to recover against any antecedent indorser upon a negotiable note, it is only necessary that due demand should be made upon the maker of the note at its maturity, and due notice of the dishonour given to the endorser. But, by the laws of some of the American States, it is required, in order to charge an antecedent endorser, not only that due demand should be made and due notice given, but that a suit should be previously commenced against the maker, and prosecuted with effect in the country where he resides, and then, if payment cannot be obtained from him under the judgment, the endorsee may have recourse to the endorser." In such a case, it might be inferred, as a matter of principle, that the endorsement, as far as its legal effect and obligation and the duties of the holder are concerned, must be governed by the law of the place where the endorsement is made. †

* WESTLAKE. Private Intern. Law, p. 243 et seq. PHILLIMORE. Comm. on Intern. Law. Vol. IV. Chapt. XLII.

Story. On bills. §§ 156 and 157,

The following opinion, in the matter of bills. of exchange, delivered by Judge Lewis of the Supreme Court of Pennsylvania, 16th May 1854, in the case Lenning v. Ralston, and cited by Sir Robert Phillimore, in a note on Chapter XLII of Vol. IV of his Commentary on International Law, will give some insight into the American Law concerning this branch of the lex mercatoria and, at the same time, illustrate the different and occasionally complicated aspects of the transactions entailed in certain cases by bills of exchange. The opinion given by the Judge in the above mentioned case runs as follows. "This suit is brought for the benefit of the Commercial Bank of London, upon an instrument, which bears upon its face every mark of a foreign bill of exchange, drawn in Philadelphia, upon a house in London, and accepted by the latter. It is true that the bill was not actually negotiated in this State, so that it is not, within the letter of the Statute of 1821, a bill drawn in Pennsylvania. The drawers had a mercantile house in Philadelphia, and they placed 'Philadelphia' at the head of the bill as the place at which it was to bear date, leaving blanks for the day of the month, and the year. They fixed the amount of it and signed it, leaving blanks also for the period which the bill had to run before maturity, and for the names of the payee and acceptors. All this was done by the defendants here. The instrument was then sent, in this imperfect condition, to their partner in London. They authorised him to fill the blanks and negotiate it in London, and he did so. It was pur

chased by the Bank without any notice of the manner in which it originated, or of the fact that it was issued in that city and not in Philadelphia. When that institution became the holder, it bore

the dress of a bill of exchange drawn in Pennsylvania, and, upon the principle that every one is presumed to intend to produce all the consequences to which his acts naturally and necessarily lead, the presumption is that the defendants intended that the purchasers of it should receive it under the belief that it was a bill drawn in Philadelphia in the usual course of business. The question is whether they shall be compelled to perform their contract in the sense in which they intended the opposite party to understand it, or in a sense contemplated only by themselves and entirely excluded by the terms of the instrument itself. It is very material to the parties that this question should be properly decided. The bill was drawn on July 3, 1850. The Act of May 13, 1850, reducing the damages on dishonoured foreign bills of exchange to 10 per cent., contains a provision limiting its operation to bills drawn after the 1st of August 1850. So that, if the bill in question is to be enforced according to its terms, the Act of 30th March 1821, giving 20 per cent. damages for its dishonour, furnishes the rule of decision."

"All writers of authority on questions of morals agree, that promises are binding in the sense in which the promissors intended at the time that the promisees should receive them (Paley. Chap. V.; Wailand. Chap. II.; Adams. Part III. Chap. V). Upon this principle, it was deemed a gross violation of contract, when Mahomet, after promising to spare a man's head,' ordered his body to be cut through the middle. When Tamerlane, at the capitulation of Sabasta, promised to 'spill no blood,' it was an infraction of the treaty to 'bury the inhabitants alive.' These monstrous constructions of contracts were condemned by the civilized world as gross violations of the es