PREFACE TO FIRST EDITION These cases have been prepared for the use of students in Commercial Law. When the writer took charge of the Commercial Law classes in Northwestern University, some years ago, he doubted whether he could profitably use cases as material for assigned lessons, and he therefore relied upon mimeographed notes in the form of a text, using cases only in brief paraphrase as illustrations, and these notes were afterwards put in type and published in the form of small hand books. But it was noticed that when the writer dwelt in his lectures on the facts of actual cases and stated the court's decision and read from the opinion, the student seemed deeply interested, and retained the matter better in his memory than other parts of the work. From this experience, the writer became convinced of the value of the use of cases, in his classes, and he has used them in mimeograph form in connection with text for some time with considerable success. The "case system" of law study for those whom we may term professional law students has been so widely adopted and approved in law schools that anything said in its behalf would seem superfluous and presumptuous. A word or two in its justification may seem desirable when applied to those who are taking up the study temporarily and briefly for business and general cultural purposes. That there are differences of an important nature between the professional and non-professional student of law, and that these must be dealt with in practical ways, is very true. For, the law student makes the study of the law the beginning of his life work; its importance is direct and vital. His ambitions, plans, hopes, his keenest self-interests all center around his study. Usually, also, he devotes his entire working time to its pursuit. He realizes that the chief objective of his student career is to train. his mind for a work that will begin after he leaves school. The non-professional student takes up the study of law in an entirely different view point. His chief interests are elsewhere. Usually, only a fraction of his time is devoted to its study. And in his school work he not only makes a beginning but an ending of his study of the subject. He has, therefore, an entirely different goal to be attained than that of the professional law student. To teach this student, under these circumstances, law in any final sense, is of course beyond the bounds of possibility. The writer once heard from one of his students of a prodigy who had learned commercial law. He had read the book thereof and mastered the subject. He could solve any problem that could be put to him. Unfortunately, the rest of us are limited in our powers. And it seems to the writer that one of the first things that the student should be taught is this: that he is entering upon the study of a subject that is as broad as human endeavor, of endless application, and of ever changing condition, and that even by a life time of study there is no such thing as finally mastering it or any of its branches. To offset this discouraging information, he should be advised that in its study he may hope to learn certain fairly permanent principles and rules and to acquire information that will enable him to answer for himself many questions that will present themselves, and, what is perhaps of greater importance, that he may recognize legal problems, as problems, and avoid pitfall by seeking professional advice, where necessary; and that he can find no better subject as a study for general cultural purposes. To recapitulate, the student should acquire: (1) A realization of the character, source and universality of law; (2) A practical working knowledge, enabling him to be more efficient and safe in his business affairs; (3) The general broadening and enlightenment of his mind. In the accomplishment of these ends, the cases as the chief part of his study seem better adapted than mere text or lecture. In the case, the student sees law in its relationship to life; he learns that it is principle applied to varying sets of facts; he understands the character of law and the nature of its development. The case not only informs him, but it has a dramatic value that arouses and holds his interest. The stage is set with real characters. No longer is the truth unconnected with actual human conduct. The student sees men situated as he has been, or may be situated. And it is in connection with these facts that the judge's exposition of the law is made, wherein at some length he announces the principle, applies it, and limits, distinguishes, and harmonizes. The case system enables the student, and to an extent requires him, to make some original research in first hand material. It encourages independence of thought. The case is to him somewhat as the cadaver is to the medical student. But the instructor must remember in using the case system that his vision is not the vision of the student. The student must be led; he must be shown the way; he must be kept within the proper bounds. He must be led up into the high places and shown the field that he is to traverse so that the whole may be properly correlated to its parts; the teacher must accompany the inquirer upon the journey, explaining, asserting and guiding. Hence the value of lecture, of text, of quiz. Without these helps the student gropes blindly. In this book there has been an attempt to arrange the cases under such an outline and with such explanatory and connecting notes as to give unity and completeness to the subjects covered. Two difficulties have been encountered. One is to present the subjects covered within the range of a moderately priced volume, and the other is, the final spurt that was required to furnish the book within the time planned for. But on the whole the editor has produced a book fairly satisfactory for his own purposes and trusts it will prove so to those who have indicated or may indicate a purpose to use it. The book contains nearly eleven hundred pages, and the development of some phases has been necessarily limited, but topies of a merely technical or peculiarly confusing character or a remote importance have been purposely omitted or having slighted. The book should be useful in all schools teaching the subjects included, except perhaps in courses of very elementary nature. It should be accompanied with such text, or other helps, as the instructor deems advisable. Questions follow each case, and it is thought these will be very helpful. It is perhaps unnecessary to add that the editor of these cases has made very free paraphrases of the facts, and made omissions from lengthy opinions. NORTHWESTERN UNIVERSITY, ALFRED W. BAYS. PREFACE TO SECOND EDITION In this, the second edition of Cases on Commercial Law, the editor has followed the general outline and method of the first edition. Much new material has been added in the shape of new cases and more extensive annotations. The questions following the cases have been increased and revised. There has also been added a preliminary division called "General Survey" and a division on Bankruptcy. Some of the cases of the former edition have been eliminated to make way for later or better cases. In detail, the outline follows the outline of the set of text books by the same author known as American Commercial Law Series (second edition), the same section numbers being retained in parenthesis following the serial section numbers of this case book. This method has the advantage of serving those who use both the text and the cases, and does no harm to others. It results, however, in having some section numbers in the case book for which there are no cases, and where that occurs, the reader will understand the reason. Experience in teaching has confirmed the editor of this book in the belief that the treatment of the subject under the generally accepted headings of Contracts, Agency, Sales, etc., is the advisable one. A view is held by some authorities that this is a lawyers' division and that while such a division is suitable for the professional law student, a different method of approach should be worked out for the business law students who are not preparing to become lawyers. The writer cannot subscribe to this view. There is a law of contracts, a law of agency, a law of negotiable paper, a law of partnerships, a law of corporations, for the business man, just as there is for the lawyer. It is a natural and logical division. The business man, rather than the lawyer, is responsible for it. To use a simple illustration, suppose a business man brings me a negotiable promissory note and asks me to explain to him its |