and offers to deliver up the instrument itself. 7 Barn. & Cress. 90, 14 Eng. Com. Law Rep. 21. This decision is stated to be agreeable to the mercantile law of other countries. Ordonnance de Commerce of Louis XIV., tit. 5, art. 1; Modern Code de Commerce of France, liv. 1, tit. 9, art. 151, 152. It has been since followed. Ramuz v. Crowe, 1 W. H. & G. 174.

By these cases it is established in England, that in an action on a negotiable instrument, the plaintiff must be holder at the time he sues upon it; and that if he has lost it, his action cannot be maintained. The courts point out the inconvenience which would arise if the plaintiff could recover, and throw on the defendant the consequences of the plaintiff's negligence, and shew that the proper remedy of the loser of the bill is in equity, where he might call on the party liable on the bill, on due indemnity, to give him another bill, or pay him the amount. Clay v. Crowe, 8 W. H. & G. 298; Crowe v. Clay, 9 Id. 607; 18 Eng. Law & Eq. 514, 25 Id. 451.

3. The English rule precludes an action not only on the lost bill, but also for the demand on account of which that bill was given.

Clay v. Crowe was not an action on the lost bill, but on the demand on account of which the bill was given. A bill given "for and on account" of money due on simple contract, operates as a conditional payment, which may be defeated at the option of the creditor, if the bill is unpaid at maturity in his hands; in which case he may rescind the transaction of payment, and sue on the original demand. Griffiths v. Owen, 13 M. & W. 58, 64; James v. Williams, Id. 828. If the bill be lost, the condition on which the payment may be defeated does not arise, Belshaw v. Bush, 11 Com. Bench (2 J. Scott) 191, 73 Eng. Com. Law Rep. 191; and the defendant, if compelled to pay the original debt, would be subject to inconvenience of the like kind as if compelled to pay the bill. Accordingly it is held, that a debt paid by a lost bill cannot be recovered. Mercer v. Cheese &c. 4 Man. & Grang. 804, 43 Eng. Com. Law Rep. 432; Price v. Price, 16 M. & W. 232. The loss of a negotiable bill, given on account of a debt, is an answer to an action for the debt, as well as to one on the bill. Crowe v. Clay.

4. Distinction in England between instrument which was, and instrument which was not, originally negotiable.

There is a distinction in England between an instrument

which in its original state is negotiable by being payable to bearer or order, and an instrument which in its original state is not negotiable, as if it be payable to the payee without the words or order." In the latter case, the loss of the instrument appears not to be an answer to the payee's action upon it. Wain v. Bailey, 10 Adol. & El. 616, 37 Eng. Com. Law Rep. 193; Parke, B. in Clay v. Crowe, 8 W. H. & G. 298; Charnley v. Grundy, 14 Com. Bench (5 J. Scott) 608; 78 Eng. Com. Law Rep. 608, 25 Eng. Law & Eq. 318.

5. Rule established by decisions in New York, Pennsylvania and Massachusetts.

This also has been the course of decision in New York. In that state it was decided that if a promissory note payable to bearer be lost, the person who was the holder can maintain an action on it if the note be not negotiable, Pintard v. Tuckington, 10 Johns. 104, 3 Cow. 312, 12 Wend. 174; but not if the note be negotiable, Rowley v. Bell, 3 Cow. 312; McNair v. Gilbert, 3 Wend. 346; Smith &c. v. Rockwell, 2 Hill 482.

The rule in Pennsylvania is like that in Massachusetts. Meeker &c. v. Jackson, 3 Yeates 442; Freeman &c. v. Boynton, 7 Mass. 486; Peabody v. Denton &c 2 Gal. 351; Donelson v. Taylor, 8 Pick. 390. Considering the rule in England and New York to rest on the ground that it is better for parties to go into chancery where all the circumstances of the loss of the instrument can be better investigated, and suitable indemnity for the defendant better estimated and adjusted, it is considered in Massachusetts not proper to apply the rule where there is no such remedy in chancery. The objection that a court of law has no jurisdiction to order, or to judge of the sufficiency of, an indemnity, is regarded in that state as rather ideal than solid. In an action on notes payable to order, which had been endorsed in blank by the payee, and stolen from the holders, they recovered on filing a sufficient bond of indemnity with sureties. Trales &c. v. Russell &c. 16 Pick. 315.

6. Provision made in New York by statute.

The Revised Statutes of New York (vol. 2, § 75, 76, p. 406 of 1st and $ 95, 96, p. 327, 8, of 2d edi.) provide as follows:

In any suit founded upon any negotiable promissory note or bill of exchange, or in which such note, if produced, might be allowed as a

set-off in the defence of any suit, if it appear on the trial that such note or bill was lost while it belonged to the party claiming the amount due thereon, parol or other evidence of the contents thereof may be given, on such trial, and notwithstanding such note or bill was negotiable, such party shall be entitled to recover the amount due thereon, as if such note or bill had been produced.

But to entitle a party to such recovery, he shall execute a bond to the adverse party, in a penalty at least double the amount of such note or bill, with two sureties, to be approved by the court in which the trial shall be had, conditioned to indemnify the adverse party, his heirs and personal representatives, against all claims by any other person on account of such note or bill, and against all costs and expenses by reason of such claim.

CHAPTER XXV.

RIGHTS OF THE HOLDER OF A BILL OR NEGOTIABLE NOTE; AND LIABILITIES OF THE PRIOR PARTIES.

1. What bill or note may be so transferred as to give the holder a right of action thereon.

The law of merchants distinguishes bills of exchange from other contracts by making them assignable; this is for the convenience of commerce, that they may pass from hand to hand in the way of trade as if they were specie. 1 Str. 441.

If a man has a bill payable to him or bearer, and he delivers it over for money received, without endorsement of it, this is a plain sale of the bill, and he who sells it does not become a new security; but if he endorse on it he becomes a new security, and then he is liable on the endorsement. Holt, C. J., Bank of England v. Newman, 1 Ld. Raym. 442; 12 Mod. 241.

It is said in Marius, that a note may be made payable either to A or bearer, A or order, or to A only. 6 T. R. 123. And this is true for the most part under the statute of Ann.

A note, payable to bearer, is negotiable under that statute and transferrable without endorsement; and if the payee puts his name on the back, he is as much bound as an endorser as if the note had been made payable to him or order. Brush v. Reeves' adm'rs, 3 Johns. 439; Eccles v. Ballard, 2 McCord 388; Allwood v. Haselden, 2 Bailey 457. And he is entitled to the privileges of endorser; among which are demand on

the maker and notice of dishonour. Dean v. Hall, 17 Wend. 214; Seabury v. Hungerford, 2 Hill 80.

If the bill be drawn payable to A or order, bare delivery will not transfer the right: the order of A is necessary to enable a third party to enforce payment. Tindal, C. J. 3 Bingh. N. C. 828. But such order may be made by endorsement. The construction of a note, whereby the maker promised to pay J. R. W. to the order of S. J. and L. J., was that J. R. W. is not the payee but the person to whom the payees were to endorse it by the request of the maker. They having accordingly endorsed it, the legal title is derived through them to their endorsee, and he may maintain an action on the note in his name. Willis v. Green, 10 Wend. 516, 5 Hill 232.

The third case mentioned by Marius-a note payable to A only is not embraced in the statute of Ann. The case of Burchell v. Slocock, 2 Ld. Raym. 1545, is often referred to as authority for the position that such an instrument is a promissory note under the statute; but it does not appear to sustain the position. Being an action on the case, by the administrator of the payee against the maker, the count was good if it shewed a promise on sufficient consideration. Now the allegation was that the defendant and another made a note, by which they jointly and severally promised to pay, &c. for value received, from the premises in the street called Rosemary lane, late in the possession of one T. R. S. It was by reason of the said premises and also by force of the statute that the plaintiff sued. True it was shewn for cause of demurrer that the note was not within the statute; and the reporter states that the court held it was; but in his marginal abstract he describes the note as being to "J. S. or order."

Upon the authority of this case, and that of Smith v. Kendall, 6 T. R. 123, cited ante, p. 174, the supreme court of New York, under a statute the same in substance as the statute of Ann, has held that a note, though it has not the words "or bearer," or the words "or order," is a good promissory note within the statute, and may be declared on as such by the payee. Downing v. Backenstoes, 3 Caines's Rep. 136; Goshen Turnpike Co. v. Hurlin, 9 Johns. 217, 18. The court, therefore, deemed it not requisite to aver a consideration; but in the last case it remarks that a consideration appears on the face of the note.

According to Marius, if a bill be not payable to a man or his assigns or order, the assignment of it will not avail. Under the statute of Ann, there is a like rule as to promissory notes. Unless there be in the instrument authority to endorse, the endorsee cannot, under the law-merchant or under that

Hill

statute, sue on a bill of exchange or a promissory note. v. Lewis, 1 Salk. 133; 2 B. Monroe 312. It has been so held in Pennsylvania, Gerard v. La Coste &c. 1 Dall. 195; and Maryland. To enable an assignee to maintain an action in his own name on a promissory note against the maker, the court of appeals of Maryland held it essential under the statute of Ann that the words "or order," or "bearer," or words equivalent, should be inserted in the note. Noland v. Ringgold, 3 Har. & J. 216. So in England, where there was by the note a simple promise to pay to R. & W., (without the words "or order,") and the note was endorsed by R. & W. and J. K. & Co., it was considered that the holder could not sue on it. Plimley &c. v. Westley, 2 Bingh. N. C. 249, 29 Eng. Com. Law Rep. 322; Parke, B., 6 M. & W. 426.

2. What is necessary to constitute a valid endorsement. Cases in which there was question as to the sufficiency of the delivery.

A bill may be endorsed to a party in two ways; either by special endorsement making it payable to that party; or by a blank endorsement and delivery to that party. In the latter way, if not in the former, the bill must be delivered to the party as endorsee, in order to constitute an endorsement to him. Wood, B., 5 Price 442; Adams v. Jones, 12 Adol. & El. 455, 40 Eng. Com. Law Rep. 94; Brind v. Hampshire, 1 M. & W. 369; Bayley on Bills, p. 98 of 4th edi.; Marston v. Allen, 8 M. & W. 494.

It may be sufficient to shew a constructive delivery—an act which puts the note into the power or under the control of the endorsee. Richardson v. Lincoln, 5 Metcalf 203. But if the holder of a note simply makes an endorsement upon it, directing it to be paid to a third person, and retains it in his own possession, no interest vests in the endorsee. Clark v. Boyd, 2 Hammond 60, 61. On a note the holder wrote his name, and after his death his executrix delivered the note to the plaintiffs, without endorsing it; so that there was a writing of his name by the deceased and a delivery by his execu trix. These acts did not constitute an endorsement of the note; the person to whom it was so delivered, had no right to sue upon it. Bromage &c. v. Lloyd &c. 1 W. H. & G. 32.

In Adams v. Jones, and Marston v. Allen, it was not intended that the transferree should ever take any interest in the bills. It was considered the same thing in principle where the intention was that the transferrees should not take any interest in the bills until old bills were returned-that no interest