The following are examples of the three kinds of instru

1. Boston, Jan. 1, 1892. Six months after date I promise to pay to A (or to A or order, or to the order of A, or to bearer) One Thousand Dollars. Value received. B.

2. (Date.) Thirty days after sight (or after date, or at sight) pay (as above). Or, pay this first of exchange, second and third unpaid. To C (individual, partnership, bank or other corporation).

3. (Date.) Pay (as above, Value received' being usually omitted). To the Eagle Bank, Boston.

The law however prescribes no particular form of words for any of these instruments; it is satisfied if the essentials of the instrument are stated, however inartificially.

§ 2. PARTIES.

The person who executes a promissory note is called the maker, not the drawer; the person who executes a bill of exchange is called the drawer, not the maker; the person who executes a cheque is generally called the drawer, sometimes the maker. The names, through then confused; but

Maker and drawer to be distinguished.

carelessness or indifference, are now and the contract of the maker of a note differs radically from that of the drawer of a bill, and it is best therefore to give to each its recognized name. The contract of one who executes a cheque is anomalous; it is not that of drawer of a bill or maker of a note; but on the whole the better usage gives to the person the name of drawer.

The person to whom, by name, a note, a bill, or a cheque is made payable is called the payee; the person upon whom a bill or a cheque is drawn, that is, the person called upon to make payment, is called the drawee, and in case of acceptance by him (the instrument being a bill of exchange), acceptor. When the payee, or other person at the same time or afterwards, puts his name upon the paper,

Payee: drawee : indorser.

1 See N. I. I. § 13, 1; §§ 19, 20.

2 See N. I. L. § 24; also id. §§ 12, 13.

the act is called indorsement, and the party an indorser. The person to whom the paper is then or afterwards passed is called indorsee or holder. The term holder is sometimes applied to the payee; the term indorsee is applied to a holder after an indorsement, even though the indorsement be not immediately to him. Parties absolutely liable are called primary parties, and are said to be primarily liable. Other parties are called secondary parties, and are said to be secondarily liable.1

$ 3. DELIVERY.

The contract of the defendant is not complete, and no action upon the instrument can be maintained against him, even by a holder in due course, until he has delivered the Instrument instrument. And delivery imports more than must be handing over to another; it imports such a transfer of the instrument to another as to enable the latter to hold

delivered.

it for himself. If the defendant has only put the paper into the hands of his agent, or of a custodian, to hold accordingly, he has not delivered it any more than if he had passed it from his right hand to his left; he has only enabled the agent or custodian to deliver it. Theft from the agent or custodian would be nothing more than theft from the defendant.

Delivery may be by intention, by agency, or by negligence, and, it seems, in no other way. But the defendant may estop himself to deny delivery. Delivery by intention Modes of is often called actual delivery; while delivery delivery. without intention is often called constructive delivery. But constructive' delivery is delivery as fully as is 'actual'; the terms are somewhat misleading and of no special use.

Delivery of the instrument by intention, that is, transferring it to another with intent that he shall hold it for himself, includes mistake. A thing done in mistake is done intentionally,

1 N. I. L. § 3.

2 Burson v. Huntington, 21 Mich. 415; Cases, 227; Middleton v. Griffith, 57 N. J. 442. See Baxendale v. Bennett, 3 Q. B. Div. 525. But see N. I. L. 23, which is not clear.

See post, pp. 202–205.

though the effect or result may not be in the mind and hence may not be intended. I may desire to send a letter to A, but if in consciousness I send it to B, though under mistake, the sending is intentional. I have adopted the means whereby the letter goes to B,

Delivery by intention: mistake.

and that is enough.

Delivery by agency: custodians.

Delivery of the instrument by agency may not be delivery by intention of the principal at all; it may be delivery contrary to his intention, and even against his orders. And agency in the law merchant has a wider meaning than the term has in the common law. This fact seems to have been overlooked in some cases. Thus it has sometimes been supposed that where the instrument has been put into the hands of a mere custodian, one, that is to say, having nothing to do but to keep it, the rule of agency does not apply if in violation of his trust the custodian transfers it. The custodian is not an agent according to the common law, and not being held out as an agent, he cannot bind the defendant, it is said, by transferring the instrument.1

It is true that a mere custodian is not even a special agent, in the law of agency in general; but it does not follow that he may not be treated as an agent in the law merchant. The law merchant may well have a doctrine of agency of its own. Mercantile interests require special protection in the purchase of negotiable instruments, and, by custom, it may well be enough to confer title, that the defendant has enabled the custodian to pass the instrument to a bona fide holder for value.2

Delivery by negligence imports that the instrument has passed into circulation, without intention or agency, by the 1 Chipman v. Tucker, 38 Wis. 43: Roberts v. McGrath, id. 52; Roberts v. Wood, id. 60. See Carter v. Moulton, 51 Kans. 9.

2 The Wisconsin cases above cited are not supported by the authorities to which they refer. Burson v. Huntington, 21 Mich. 415; Cases, 227; Baxendale v. Bennett, 3 Q. B. Div. 525. These were cases in which the paper was stolen. The cases of Walker v. Ebert, 29 Wis. 194, and Kellogg v. Steiner, id. 626, were also distinguishable; they were cases of fraud in the very being of the contract, so that no contract was ever executed. Foster v. Mackinnon, L. R. 4 C. P. 704; Cases, 237.

defendant's failure to exercise reasonable care in keeping it in his hands, as for instance in a den of thieves or gamblers or in a brothel. But it would not be enough that Delivery by the instrument passed into circulation by reason negligence. of some remote negligence of the defendant. The defendant's negligence, to make it a case of delivery, should have been in the very matter of the instrument's passing into circulation.1 Hence where the instrument passed out of the defendant's possession into the hands of another, after the defendant had kept it in a negligent way for awhile, but not by reason thereof, there has been no delivery by the defendant's negligence. Custom has not established any rule upon the subject, and the rule of law must therefore rest upon legal reasoning.2

Delivery by intention is of course valid in all cases; delivery by agency within the scope of the agent's authority is valid, even though in violation of the defendant's instruc- Distinctions

tions, if the instrument was transferred to a holder touching kinds of delivery. in good faith without notice; delivery by negligence is probably valid only in favor of a holder in due course.'

4

The defendant may then show, against any holder, that he never delivered the instrument in any way; unless indeed he has estopped himself from doing so. Assuming Evidence as to however that there has been a delivery by the delivery: condi tional delivery. defendant, it should be noticed that delivery ordinarily is not the subject of any stipulation or term of the instrument, and hence, though proved, is still a subject for evidence, between the parties to the act and those similarly situated, in regard to its real import. Between the parties and against holders with notice or without consideration, delivery may then be shown to have been upon some condition or stipu

1 See Merchants of Staple v. Bank of England, 21 Q. B. Div. 160; Swan v. North British Co., 2 Hurl. & N. 175, 182; Arnold v. Cheque Bank, 1 C. P. D. 578; Bank of Ireland v. Evans Charities, 5 H. L. Cas. 389; Bank of England v. Vagliano, 1891, A. C. 107, 115, 135, 136, 170, 171; Baxendale v. Bennett, 3 Q. B. Div. 525; Bigelow, Estoppel, 655-659, 5th ed.

2 Negligence in delivery should not be confused with want of care by which a forgery has been made easy. See as to the latter post, pp. 217-220. 3 Further, see post, pp. 202-205.

On that point see post, pp. 202–205.

Thus it

lation which has not been met or has been violated.1 might be shown that the instrument was delivered merely in escrow, for some special purpose which has not been accomplished, or which, when accomplished, required a return of the instrument to the defendant.2

Invalidating contract by

way of alleging

conditional delivery, unsound.

Some courts have gone still further, and permitted evidence, between immediate and like parties, annulling altogether the effect of a real delivery, even against the maker of a promissory note, upon the specious suggestion that it may be shown that the delivery was conditional. Thus it has been held, upon such a suggestion, that it may be shown that the delivery was upon the condition' that the defendant should be under no liability upon his signature. But that certainly is perverting the rule that the delivery may be shown to be conditional. Conditional delivery necessarily imports possible liability, liability upon the happening or performance of the condition; it is a contradiction to say that a condition of itself can destroy liability. The terms of the contract creating liability, whether written or imported by the law merchant, are not, in sound reason, to be circumvented and wholly annulled, as they would be by declaring that the delivery was conditional.

To say then that a signature is to be without recourse against the signer is not to say that the delivery is to be conditional; Signature with exemption from recourse is exemption from liabilout recourse. ity. The idea of exemption relates only to liability, and is perfectly consistent with delivery; the common case of indorsement in terms without recourse' plainly shows the fact. Indorsement without recourse' is no evidence of want of delivery or of any condition pertaining to the act of delivery.*

1 N. I. L. § 23; Higgins v. Ridgway, 153 N. Y. 130; Benton v. Martin, 52 N. Y. 570; Seymour v. Cowing, 4 Abb. Ct. App. Dec. 200; Labbee v. Johnson, 66 Vt. 234; Smith v. Munsetter, 58 Minn. 159. But see Henshaw v. Dutton, 59 Mo. 139; Hubble v. Murphy, 1 Duval, 278.

2 Smith v. Munsetter, supra. Not, it must be noticed, against a holder in due course. Lookout Bank v. Aull, 93 Tenn. 645.

Higgins v. Ridgway, and other New York cases, supra.

The misleading New York doctrine is opposed, in principle at least, to Beecher v. Dunlap, 52 Ohio St. 54; Wilson v. Wilson, 26 Oreg. 251; Woods