66 accepts or certifies the check." 51 This is undoubtedly declaratory of the rule as it exists in most jurisdictions in this country. b. General rule. It has been stated as a well-established principle of law that the right of the depositor to funds on deposit in a bank is a chose in action, and the depositor's check does not transfer the debt or give a lien upon it to the third person without assent of the depositor.52 A check upon a bank in the usual form, not accepted or certified by the bank, does not constitute an equitable assignment of money to the credit of the holder, but is simply an order which may be countermanded and its payment may be forbidden by the drawer at any time before it is actually cashed. This proposition is not universally accepted in a number of the States where it is held that a check drawn on funds in a 53 51. Neg. Inst. L. (N. Y.), § 325. For same section in statutes of other States see Appendix. 52. National Bank of the Republic v. Millard, 10 Wall. (U. S.) 152. 53. Check does not operate as an equitable assignment, see the following cases: United States.-Florence Mining Co. v. Brown, 124 U. S. 385, 8 Sup. Ct. 531, 31 L. Ed. 424; Strain v. Gourdin, Fed. Cas. No. 13,521, 2 Woods, 380. Alabama.- Industrial Trust, etc., Co. v. Weakley, 103 Ala. 458, 15 South. 854, 49 Am. St. Rep. 45; National Com. Bank v. Miller, 77 Ala. 168, 54 Am. Rep. 50. Colorado.- Colorado Nat. Bank v. Boettcher, 5 Colo. 185, 40 Am. Rep. 142. Georgia.- Georgia Seed Co. v. Talmadge, 96 Ga. 254, 22 S. E. 1001. Indiana.- Harrison v. Wright, 100 Ind. 515, 58 Am. Rep. 805; Rockville Nat. Bank v. Lafayette Second Nat. Bank, 69 Ind. 479, 35 Am. Rep. 236; Griffin v. Kemp, 46 Ind. 172. Maryland.- Exchange Bank of Wheeling v. Sutton Bank, 78 Md. 577, 28 Atl. 563, 23 L. R. A. 173; Moses v. Franklin Bank, 34 Md. 574. Massachusetts.- Carr v. Nat. Security Bank, 107 Mass. 45, 9 Am. Rep. 6; Dana v. Third Nat. Bank, 13 Allen, 445, 90 Am. Dec. 216; Bullard v. Randall, 1 Gray, 605, 61 Am. Dec. 433. Michigan.- Brennan v. Merchants & Manufacturers' Bank, 62 Mich. 343, 28 N. W. 881; Grammel v. Car mer, 55 Mich. 201, 21 N. W. 418, 54 Am. Rep. 363. Minnesota.- Northern Trust Co. v. Rogers, 60 Minn. 208, 62 N. W. 273, 51 Am. St. Rep. 526. Missouri.- Coates v. Doran, 83 Mo. 337; Dickinson v. Coates, 79 Mo. 250, 49 Am. Rep. 228. New Jersey. Creveling v. Bloomsburg Nat. Bank, 46 N. J. L. 255, 50 Am. Rep. 417. New York.- First Nat. Bank v. Clark, 134 N. Y. 368, 32 N. E. 38; O'Connor v. Mechanics' Bank, 124 N. Y. 324, 26 N. E. 816; Attorney-General v. Connecticut Life Ins. Co., 71 N. Y. 325, 27 Am. Rep. 55; Tyler v. Gould, 48 N. Y. 682; Chapman v. White, 6 N. Y. 412, 57 Am. Dec. 464; Lunt v. Bank of North America, 49 Barb. 221; Harker v. Anderson, 21 Wend. 372; Murray v. Judah, 6 Cow. 484. North Carolina.- Hawes v. Blackwell, 167 N. C. 196, 5 S. E. 245, 22 Am. St. Rep. 870. Ohio.- American, etc., R. Co. v. Metropolitan Nat. Bank, 54 Ohio St. 61, 42 N. E. 700, 56 Am. St. Rep. 700, 31 L. R. A. 653. Pennsylvania.- Rielly v. Daley, 159 Pa. St. 605, 28 Atl. 493; Hemphill v. Yerdes, 132 Pa. St. 545, 19 Atl. 342, 19 Am. St. Rep. 607; Sailor V. Bushong, 100 Pa. St. 23, 45 Am. Rep. 353. Tennessee.- Akin v. Jones, 93 Tenn. 353, 27 S. W. 669, 42 Am. St. Rep. 921, 25 L. R. A. 523; Pickle v. Muse, 88 Tenn. 380, 12 S. W. 919, 17 Am. St. Rep. 900. bank is an appropriation of the amount thereof in favor of the holder, and it follows that the holder of the check, upon the refusal of the bank to pay the same where the amount deposited to the credit of the drawer is sufficient, may bring an action on the check against the bank in his own name. The check in the ordinary form does not, as between the drawer and the payee, constitute an assignment pro tanto of the amount deposited in the bank upon which the check is drawn; and the mere giving and receipt of the check does not entitle the holder to priority over general creditors in the fund received from such bank by an assignee under a general assignment made by the debtor for the benefit of his creditors.56 While a check does not, in the ordinary transaction of business, operate as an equitable assignment of the fund, it is nevertheless competent for the parties to create such an assignment by a clear agreement or understanding, oral or otherwise, in addition to the check, that such shall be the effect of the transaction.57 54. Check operates as an assignment. It has been uniformly held in the State of Illinois that a check operates as an absolute assignment of the fund on which it is drawn, from the time it is delivered as between the drawer and the payee, and the bank is bound as soon as the check is presented, and whatever sum stands upon the books to the credit of the depositor at the time of such presentation is absolutely assigned to the holder of the check. Wyman v. Ft. Dearborn Nat. Bank, 181 Ill. 279, 54 N. E. 946, 72 Am. St. Rep. 259, 48 L. R. A. 565. See also Duquoin First Nat. Bank v. Keith, 183 Ill. 475, 56 N. E. 179; Gage Hotel Co. v. Union Nat. Bank, 171 Ill. 531, 49 N. E. 420, 63 Am. St. Rep. 270, 39 L. R. A. 479; Neblack v. Park Nat. Bank, 169 Ill. 517, 48 N. E. 438, 61 Am. St. Rep. 203, 39 L. R. A. 159; Antigo Lank v. Nat. Trust Co., 149 Ill. 343, 36 N. E. 1029, 23 L. R. A. 611; Metropolitan Nat. Bank v. Jones, 137 Ill. 634, 27 N. E. 533, 31 Am. St. Rep. 403, 12 L. R. A. 492; Union Nat. Bank v. Oceana County Bank, 80 Ill. 212, 27 Am. Rep. 185; Munn v. Burch, 25 Ill. 21; Farmers' Bank. & Trust Co. v. Newland, 97 Ky. 464, 31 S. W. 38; Fonner v. Smith, 31 Neb. 107, 47 N. W. 632, 28 Am. St. Rep. 510, 11 L. R. A. 528; Hawes v. Blackwell, 107 N. C. 196, 12 S. E. 245, 22 Am. St. Rep. 870; Simmons Hardware Co. v. Greenwood Bank, 41 S. C. 177, 19 S. E. 502, 44 Am. St. Rep. 700; Dillman v. Carlin, 105 Wis. 14, 80 N. W. 932, 76 Am. St. Rep. 902; Skobis v. Ferge, 102 Wis. 122, 78 N. W. 426; Raesser v. National Exchange Bank, 112 Wis. 591, 88 N. W. 618. 55. Fonner v. Smith, 31 Neb. 107, 47 N. W. 632, 11 L. R. A. 528. See also the cases cited in the preceding note. 56. Florence Min. Co. v. Brown, 124 U. S. 385, 8 Sup. Ct. 531, 31 L. Ed. 424; Bank v. Schuler, 120 U. S. 511, 7 Sup. Ct. 644. 57. Fourth St. Nat. Bank v. Yardley, 165 U. S. 634, 17 Sup. Ct. 439. In the case of Throop Grain Cleaner Co. v. Smith, 110 N. Y. 83, 17 N. E. 671, it was held that while the mere delivery of a third person of a check or draft drawn by a creditor upon his debtor does not effect a legal transfer of a debt, where it appears that the intent was to make such a transfer, it is the duty of the court to carry out the intent. See also Coates v. Bank, 91 N. Y. 26; Risley v. Bank, 83 N. Y. 318. CHAPTER XVIII. What Law Governs Negotiable Instruments. § 170. General Principles as to Law of Place. § 171. Law Governing Validity, Interpretation, and Effect. a. Requisites as to form and execution; law of place. b. Determination of validity, c. As to negotiability. $172. Liabilities of Parties. a. The drawer and indorser. b. The acceptor. c. Rights and liabilities of bona fide holders. § 173. Transfer by Indorsement or Assignment. a. By indorsement. b. Assignment or sale. $174. Demand, Protest, and Notice of Dishonor. § 170. General principles as to law of place. It is not feasible within the scope of this work to discuss at length the various principles affecting the conflict of laws in their general application. Each State is supreme in the exercise of its control over the persons and property within its borders. It may exercise such control in the manner which it deems most conformable to its own policy. In regulating the various matters pertaining to such persons and property it may resort to its own laws or may apply the laws of another State. As a general rule the validity of a contract is to be determined by the law of the place where it is made; if valid there it is valid everywhere; but if invalid there it cannot be enforced in another State.58 The reason for this rule lies in the fact that the laws of 58. Wilcox v. Kent, 13 Pet. (U. S.) 378, 10 L. Ed. 209; Scudder v. Union Nat. Bank, 91 U. S. 406, 23 L. Ed. 245; Swink v. Dechard, 41 Ala. 258; Mumford v. Canty, 50 Ill. 370, 99 Am. Dec. 525; Bond v. Cummings, 70 Me. 125; Hall v. Costello, 48 N. H. 176, 2 Am. Rep. 207; Scheferling v. Huffman, 4 Ohio St. 241, 62 Am. Dec. 281. In the case of Coster v. Merritt, 32 a State are binding upon nonresidents within the State as well as the residents thereof, and the parties in executing a contract within the State may generally be taken to have contemplated the legal rights and obligations which arise from the stipulations contained in such contract under the laws of the State within which the contract was made. It follows, therefore, that the formalities essential to the validity of a contract and the interpretation thereof are to be governed by the laws of the country where it is made.59 Contracts which are valid where made will be enforced in the State where the action is brought unless they are contrary to the policy or laws of the latter State; this is so by virtue of the rule of comity which exists between the several States. Notwithstanding the general rule that a contract valid under the laws of the State where it is made is valid everywhere, if such a contract is against good morals, or would tend to promote vice and crime, or is against the settled public policy of the State, it will not be enforced, although valid by the law of the place where made. If a contract is made in one State to be performed in another it will be governed by the laws of the State in which it is to be performed.62 As stated by Harris, J., in a leading New York case:63 "It is a general rule of international law that the rights of the parties to a contract, as distinguished from the remedies, are to be determined by the law of the place where the contract is to be performed. If the contract be made in one State or country, and it appears upon its face that it is to be performed in another, it will be presumed that the contract was entered into with reference to the laws of the latter, and those laws will be resorted to in ascertaining the validity, obligation, and Conn. 246, it was held that the rule of lex loci contractus applies not only to the construction and validity of a contract, but also to the effect and the conduct of the parties as bearing on its validity, and therefore, where such conduct would be held, in the State where the contract was made, to be only evidence tending to invalidate it, it will be so regarded in Connecticut in determining the validity, although such acts in such State would render the contract void. 59. Byles on Bills (16th ed.), p. 382. 60. Midland County v. Broat, 50 Minn. 562, 52 N. W. 972; Parsons v. Trask, 7 Gray (Mass.), 473, 66 Am. 61. Swann v. Swann, 21 Fed. 299; 302. 62. Pope v. Nickerson, Fed. Cas. No. 11,274, 3 Story, 465; Bliss v. Houghton, 16 N. H. 90; Berrean v. Wright, 26 Barb. (N. Y.) 208; National Mut. Building & Loan Assn. v. Ashworth, 91 Va. 706, 22 S. E. 521. 63. Hyde v. Goodnow, 2 N. Y. 266. effect of the contract. This general rule, however, has its exceptions; one of which is, that where a contract is declared void by the law of the State or country where it is made, it cannot be enforced as a valid contract in another, though by its terms it was to have been performed there." The law of the place where the contract is made, and not that of the place of performance is the law which determines whether the contract is void for illegality. 64 8 171. Law governing validity, interpretation, and effect. 65 67 a. Requisites as to form and execution; law of piace.— The validity of a bill or note as regards requisites in form is determined by the law of the place of its issue. This is the rule as declared in the English Bills of Exchange Act, and the same rule would seem to exist in this country. The rule applies where the instrument specifies no place of payment. Where the essentials of a contract made in a foreign State under and in pursuance of its laws are not hostile to the law and policy of another State, the contract may be enforced in the courts of such other State. 68 Where a bill of exchange was drawn in Michigan upon a party in Illinois, it was held to be governed by the laws of Illinois, in regard to the character of its acceptance, and not by the law of Michigan; therefore, the provision of the statute of the latter State that an acceptance must be written did not apply to such bill. A negotiable instrument is not binding upon the parties until it is delivered. The place of contract is, therefore, the place where the instrument is delivered and not where it is written, dated, and signed.70 Where the instrument specifies a place of payment in a State other than that within which it was 64. Brown v. American Fin. Co., 31 v. Hibbard, 26 Vt. 698, 62 Am. Dec. Fed. 516; Kanaga v. Taylor, 7 Ohio St. 134, 70 Am. Dec. 62. 65. English Bills of Exchange Act, § 72 (1). 66. Courtois v. Carpentier, Fed. Cas. No. 3,286, 1 Wash. C. C. (U. S.) 376; Phinney v. Baldwin, 16 Ill. 108, 61 Am. Dec. 62; Mendenhall v. Gately, 18 Ind. 149; Engler v. Ellis, 16 Ind. 475; Stevenson v. Payne, 109 Mass. 378; Fessenden v. Taft, 65 N. H. 39, 17 Atl. 713; Dow v. Russell, 12 N. H. 49. 67. Stickney v. Jordan, 58 Me. 106, 4 Am. Rep. 251; Bank of Orange County v. Colby, 12 N. H. 520; Chase v. Dow, 47 N. H. 405; Barrett v. Dodge, 16 R. I. 740, 19 Atl. 530; Peck 605. 68. King v. Sarria, 69 N. Y. 24. 69. Mason v. Dousay, 35 Ill. 424. See also Scudder v. Union Nat. Bank, 91 U. S. 406, 23 L. Ed. 245. 70. Place of contract is where instrument is delivered.- In the case of Johnston v. Gawtry, 83 Mo. 339, it was held that the State in which a note is made payable and in which it is delivered in consummation of the bargain is a place of contract, although the note was executed in another State. In the case of Campbell v. Nichols, 33 N. J. L. 81, it was held that a note made to the order of the maker signed in New Jersey, and first delivered to |