compensation paid the remainder to Bassett. The plaintiff upon discovery notified the defendants of the theft, and then brought this action to recover the value of the bonds.

* * *

* * *

The question for decision therefore is whether the defendants who received and sold the bonds and accounted for the proceeds to the apparent owner, without notice of any infirmity in the title, or of any circumstances which should have put them upon inquiry, can be held responsible in damages by the true owner for conversion. The defendants undoubtedly exercised dominion over the bonds by converting them into money. If the property had consisted of chattels or nonnegotiable documents of which certificates of stock are an example, the plaintiff's title would not have been divested by a sale even to a purchaser for value and in good faith. But to this rule there is a well-recognized exception where the property consists of negotiable securities. The provision shown by the word "convertible," that the holder at maturity will receive the face of the bond in money, or at his option an equivalent in stock of the corporation does not destroy negotiability. It is a negotiable instrument within the meaning of R. L. c. 73, § 22, subsec. 4, and section 18 [Negotiable Instruments Law, § 5, subsec. 4, and section 1], and possesses the essential attributes of commercial paper, for the conversion of which the defendants on the record cannot be charged. * * *

* *

We are accordingly of opinion that judgment should be entered for the defendants. *

Section 5, subsection 3. The negotiable character of an instrument otherwise negotiable is not affected by a provision which waives the benefit of any law intended for the advantage or protection of the obligor.

This section preserves the negotiability of an instrument, even though it contains a clause in which the maker waives the rights which he may have under certain laws. There are many rights which are the subject of waiver. For example, statutes usually provide that a certain amount of property shall be exempt from sale on execution. One exemption law for the benefit of the individual himself as distinguished from his family, may be waived. Special defenses of a surety are also the subject of waiver. The right to due presentment and to receive notice of dishonor may be waived. There are any number of rights which conceivably may be the subject of waiver in negotiable instruments. This provision does not provide that all such waivers will be legal. It is deemed to be against public policy to permit a person to be bound by his agreement waiving certain kinds of rights which the law gives him. The waiver, whether enforceable or not, will not destroy negotiability.

Section 5, subsection 2. The negotiable character of an instrument otherwise negotiable is not affected by a provision which authorizes a confession of judgment if the instrument be not paid at maturity.

A word in explanation of the judgment note may be added. A judgment has the effect of determining finally that the defendant owes the plaintiff the sum of money specified in the judgment. The judgment also operates as a lien on the debtor's land, and as a lien on personal property as soon as the execution is placed in the hands of the sheriff for service.

The law requires that a person cannot be proceeded against unless he is notified by summons. Usually the summons must be personally served upon the defendant. If he cannot be found, the action will be ineffective. A creditor, therefore, although legally entitled, will not always be able to obtain a judgment. Even in a case where the debtor may be found and served with notice of the pending action, considerable time may elapse before the judgment is obtained. Usually the law provides that the defendant shall have from three to ten, twenty or thirty days before he is required to answer the plaintiff's declaration. After this comes the trial, and if the business of the court is heavy it may not be possible to have the case heard for weeks, months, and occasionally a trial may not be had for one or two years. The plaintiff, therefore, is required to wait for this long period before he obtains his judgment. Anything may happen in the meantime. The defendant may lose all of his property by speculation, concealment, or otherwise, so that when the judgment is obtained it will be worth nothing.

The foregoing was inserted for the purpose of emphasizing the importance of the confession of judgment clause in promissory notes. The effect of the clause is a waiver of the debtor's right to be personally served with summons and of the right to a trial. To illustrate: If A. holds a note signed by M. as maker, which contains a confession of judgment clause, instead of instituting a suit against M. in the ordinary way and waiting for a trial, A. will simply hand the note to some attorney who will as it were, admit in writing, on behalf of the maker, that the debt is due-notice that the clause may expressly empower any attorney to do thisand another attorney, in behalf of the holder, will take the note before some judge, even though such judge may not then be holding court, and the judge, thereupon, will enter judgment on the note. The entire process will require less than half an hour, whereas without such clause a judgment could not be obtained for weeks or months. Immediately following the entry of the judgment, property owned by the maker may be levied upon and sold to satisfy the judgment, or his wages or bank account or other debts may be garnished. It is still possible for the judgment creditor to have the judgment vacated upon his filing an affidavit showing a defense. The trial will then proceed as in the ordinary case. But in the meantime the judgment will still constitute a lien' on the defendant's property.

The provision of the Negotiable Instruments Law merely provides that if such a clause be inserted in the note that such clause

does not render the instrument non-negotiable. That is, the priv ilege conferred upon the holder of converting a negotiable instru ment into a judgment does not destroy negotiability.

This provision of the Negotiable Instruments Law does not declare that a confession of judgment clause shall be legal. A court is still left free to hold that because of the hardships upon the defendant such a clause is to be deemed against public policy and therefore unenforceable, and some states do so hold.

If the clause on an instrument bearing a fixed maturity authorizes confession of judgment at any time after date, it has been held that the instrument is non-negotiable because uncertain in the time of payment. The sections of the Negotiable Instruments Law do not absolutely require such holding; for, in effect, the instrument is one with a fixed maturity subject to acceleration at the option of the holder and could be held negotiable under Section 4(2) providing that "an instrument is payable at a determinate future time which is expressed to be payable on or before a fixed or determinable future time specified therein."

Section 6 (3). The validity and negotiable character of an instrument is not affected by the fact that it does not specify the place where it is drawn or the place where it is payable, or (4) bears a seal.

SECTION 10.-DESIGNATION OF PARTIES TO NEGOTIABLE INSTRUMENTS

There are three possible parties to a note: The maker; the payee; and the indorsers.

N. I. L., Section 184. A negotiable promissory note within the meaning of this act is an unconditional promise in writing made by one person to another signed by the maker engaging to pay on demand, or at fixed or determinable future time, a sum certain in money to order or to bearer. Where a note is drawn to the maker's own order, it is not complete until indorsed by him.

On a bill of exchange there are four possible parties: The drawer; the drawee; the payee; and the indorsers.

N. I. L., Section 126. A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer.

N. I. L., Section 185. A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this act applicable to a bill of exchange payable on demand apply to a check.

N. I. L., Section 87. Where the instrument is made payable at a bank it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon.

The drawee becomes an acceptor after acceptance. There may

be an acceptor who is not the drawee. Such an acceptor is called an "acceptor for honor". The practice of accepting for honor is rarely resorted to. The following sections of the act prescribe the circumstances under which a person will be deemed to be a party to a negotiable instrument. The nature and extent of the rights and liability of the various parties is the subject matter of succeeding chapters. We are interested here only in formal requirements. When will a person be regarded as a maker, drawer, payee, drawee, acceptor, or indorser of an instrument?

(a) OBLIGORS GENERALLY

Section 18. No person is liable on the instrument whose signature does not appear thereon, except as herein otherwise expressly provided. But one who signs in a trade or assumed name will be liable to the same extent as if he had signed in his own name.

Section 17, subsection 7. Where an instrument containing the words, "I promise to pay," is signed by two or more persons, they are deemed to be jointly and severally liable thereon.

Section 19. The signature of any party may be made by a duly authorized agent. No particular form of appointment is necessary for this purpose; and the authority of the agent may be established as in other cases of agency.

Section 20. Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized; but the mere addition of words describing him as an agent, or as filling a representative character, without disclosing his principal, does not exempt him from personal liability.

Section 21. A signature by "procuration" operates as notice that the agent has but a limited authority to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority.

DANIEL v. BUTTNER et al.

(Supreme Court of Washington, 1905. 38 Wash. 556, 80 Pac. 811.) HADLEY, J. This suit was brought to recover of the defendants, Buttner and Glidden, for an alleged personal liability upon a written instrument of which the following is a copy: "German American Investment Co. Inc. No. 409. $600.00. Seattle, Wash., Feb. 8, 1902. Received from Herman Daniel $600.00 (Six Hundred Dollars) which we promise to pay six (6) months after date with interest at the rate of eight (8) per cent. per annum. Wm. H. Buttner, President. H. M. Glidden, Secy." *

We have somewhat extensively discussed the question of liability arising out of the fraud, inasmuch as the transcript, statement of facts, and briefs are largely devoted to that subject. But, aside from that, we think the judgment of the court was right upon another ground which is urged by respondent. It will be observed by refer

ence to the note that, while the signatures are each followed by words indicating a representative character, yet no principal is disclosed. The words "German American Investment Co., Inc.," at the top constitute no material part of the instrument. The original is before us, and it shows that the above words were merely lithographed upon a blank form of receipt which was used as a paper upon which to write the note. Appellant's name is followed by the following, "Secy." Assuming that the letters designate him in the representative character of secretary, yet they disclose no principal. What purports to be the seal of the German American Investment Company is impressed upon the paper, but by no reference is it made a part of the note itself. There are no apt words used in the note showing that the corporation is obligated. Therefore, although appellant's signature is followed by an abbreviated word indicating a representative capacity, yet, no obligated principal being discosed, he cannot escape personal liability under section 20 of our Negotiable Instruments Law. * The signatures to this instrument come squarely within the terms of the above section, and the signers are personally liable.

* *

For all the foregoing reasons we think the judgment [for plaintiff] of the lower court was right, and it is affirmed.

JUMP v. SPARLING.

(Supreme Judicial Court of Massachusetts, 1914. 218 Mass. 324,

105 N. E. 878.)

Action by Edwin R. Jump, trustee in bankruptcy, of David F. Burns, against John H. Sparling. From an order of the appellate division of the municipal court of the City of Boston dismissing a report by the trial justice, plaintiff appeals.

RUGG, C. J. This is an action upon a promissory note of the tenor following:

"$596.20.

Boston, Nov. 19th, 1908. "On demand after date we promise to pay to the order of David F. Burns five hundred and ninety-six 20-100 dollars. Payable at State Street Trust Co., Boston, Mass. "Value received with interest.

"J. H. Sparling, Treas. Stratton Engine Co. "David F. Burns, Pres. Stratton Engine Co."

The plaintiff is the trustee in bankruptcy of the payee. Oral evidence was received to the effect that both Burns and the defendant signed the note in their respective capacities as officers of the Stratton Engine Company. * *

*

Under the law previous to the enactment of the Negotiable Instruments Act, the defendant corporation would not have been held on this note. It would have been not the note of the corporation, but simply the individual note of the two individuals who signed. * * A change in the law in this respect has been wrought by that act. [Court quotes section 20.]

*

These words plainly imply that if the person signing a promissory note adds to his signature words describing himself an agent or as occupying some representative position which at the same time discloses the name of the principal, he shall be exempted from personal