^ ATTORNEY-AT-LAV;, Room 619 Ashland Block, CHiCACO. ILL. ILLINOIS STATUTES Hi AND ILLUSTRATIVE CASES ON BILLS AND NOTES TO BE USED IN THE CHICAGO COLLEGE OF LAW, LAW DE- PARTMENT OF LAKE FOREST UNIVERSITY, IN CON- NECTION WITH NORTON ON BILLS AND NOTES St. Paul, Mlw. WEST PUBLISHING CO. 1898 T CorvHioHT, 18ft8, II V 'VN'EST PUBLISHING COMPANY. > TABLE OF CONTENTS. v/l. NEGOTIABLE INSTRUMENTS. Illinois Statute. (Page 8.) y^. HISTORY OF NEGOTIABLE INSTRUMENTS. Goodwin v. Robarts. (Page 9.) •^. PROMISSORY NOTE MUST BE PAYABLE ABSOLUTELY, AND DEPEND ON NO CONTINGENCY, TO BE NEGOTIABLE. Hopkins v. Van Zandt. (Page 17.) ^4. NOTE— DEFINITION— ATTORNEY'S FEES. Dorsey v. Wolff. (Page 20.; Provision for an attornoy's fee in iiotf does not u-nder the transaction usnri- ons. I'rovlsion for attorney's fees, if not ])aid when due, in note, does not destroy its negotiability. Promissory note in general terms may be defined to be a written jtromise by one per.son to pay to another person therein named, or order, a tixed snm of money at all events, and at a time specified therein, or at a time wliieh mnsr certainly arrive. A note is none the less negotial)le becanse it is made payable on or before a named date. 4. . NOTE— INDORSER— GUARANTOR— PRESUMPTION OF LAW. Milligan v. Holbrook. (Page 25.) Tlie presumption of law is that the liability of a person signing his name on tlie back of a note is tliat of a guarantor. When note is still in the hands of i^ayee, Ihat presumption may be rebutted. C NOTE— DONOR TO DONEE— DELIVERY. School Dist. of City of Kansas City v. Stocking*. (Page 26.) 1. The note of a donor to a donee is not the subjeei of a gift. 2. The incuiTJug of expense in furflierance of enterprise which the donor in- tended to promote will estop his executors to plead a want of consideration for promise contained in a promissory note. 3. Notes ))laced by the maker in the hands of another person, with direction to hand tliem. wlien called for. to the party made payable, are sntticiently de- livered. 7. MORTGAGE NOTE— ASSIGNEE— EQUITIES. Buehler v. McCormick. (Page ol.) The fact that mortgage secures payment of note "to the legal holder" does not make it n(>gotial)lo. Payment to legal holder of promissory note secured by trust deed, before maturity, without indorsement or surrender of note and trust deed, while not a defense to an action on the note by a subsetiueut innocent holder before ma- turity, is a good defense to an action by the latter to foreclose the mortgage. BARR.B.&N. (ui) TAlihE OF CONTENTS. 8. CHECKS— ACCEPTANCE— INDORSEMENT. Coaiinercial Nat. Bank of Chicago v. Lincoln Fuel Co. (Page 33.) l'ri>suiu|itiou regarding authority of a stranger to a check to indorse the same for the payee. WUM constitutes sufficient proof of an acceptance of a check by a bank. .Vrtitiavit (h-nylng tlu- genuineness of an indorsement to a check may be filed after evidence is dosed, wlien for the first time urged as an objection to a finding in favor of alleged Indorsee. 9. CERTIFYING BANK CHECKS— RIGHTS OF HOLDER— LIA- BILITY OF BANK AND DRAWER. Metropolitan Nat. Bank of Cliicago v. Jones. (Page o4.) If the holder of a bank check, instead of demanding its payment, has it certi- fied by the bank, he thereby releases the drawer from liability thereon. The ruli> is different when the drawer procures the eertification of his check before It is delivered to the drawee. In that case the drawer will be liable for non- payment on presentation. CASES REPORTED. Page tfuehler ▼. McCormick (48 N. E. 287, 1G9 111. 269) 31 Commorcial Nat. Bank of Chicago v. Lin- coln Fuel Co. (()7 111. App. 16G) 33 Dorsey v. Wolff (32 N. E. 495, 142 111. 589) 20 Goodwin v. Robarts (L. R. 10 Exch. 337) . . 9 Hopkins v. Van Zandt (40 111. App. 635). . . 17 BARR.B.& N. (v)1 Page M(>tropolitan Nat. Bank v. Jones (27 N. E. 533. 137 ill. (►:'.4) 34 Milli>:an v. Holbrook (48 N. E. 157, 168 111. :',4.3) 25 School Dist. of City of Kansas City v. Stock- ing (40 S. W. r,56) 26 Wolff V. Doisey (38 111. App. 305j. 20 ILLINOIS STATUTES ON BILLS AND NOTES. BARR.B.A N. (1)* ILLINOIS STATUTES OX BILLS AND NOTES. Section. 1. Damages on foreign bills protested. 2. Damages on domestic bills protested. 3. Effect of notes, etc. 4. Notes, etc., assignable by indorsement, 5. Suit by assignee. 6. Payment after notice of assignment. 7. Kiglits of holders— Liability of assignor. 7a. All persons liable may be sued in one action. 7b. How judgment shall be entered. 7c. When drawer or indorser pays judgment- Proceedings as to others. 7d. Proceedings when all the defendants have not been served. Section. 8. Notes, etc., payable to bearer. 9. Failure of consideration. 10. Fraud. 11. Defense. 12. Set-off. 13. Payments before assignment. 14. I>ost instruments. 1.5. Days of grace. 16. Time. 17. Holidays — Maturity of negotiable paper. 18. Check, etc., for labor payable in bankable currency — Penalty. Hurd'8 Revised Statutes of Illinois, Chap. 98, p AN ACT to revise the law in relation to promissory notes, bonds, due bills and oth- er instruments in writing. (Approved March 18, 1874. In force July 1, 1874.) k1 (DAMAGES ON FOREIGN BILLS PROTESTED.) Par. 1. Be it enacted by the people of the state of Illinois, represented in the general assembly, that whenever any bill^_oX_ex_Qhauge, drawn or indorsed within this state, and payable without the limits of the United States, is duly proteaied for non-acceptance or non-payment, the di-awer or indo rser thereof, due notice being given of such non-acceptance or non-payment, shall pn y p ^id bil l, with legal interest from the time such bill ought to have been paid, until paid, and tea per c ent, damage s in ad- dition, together witli the costs and charges pf protest. /^ iA. (DAMAGES ON DOMESTIC BILLS PROTESTED.) Par. 2. If any bill of ex- change drawn upon any person or body pol- itic or corporate, out of this state, but with- in the United States or their territories, for the pay men t ojt. money, shall be duly pre- senteJT for acceptance or payment and prp - tested for non-acceptance or non-payment, the drawer or indorser thereof, due fljoiicu being given of such non-acceptance or non- payment, shall ]2ay_ said bill, with legal in- terest from the time such bill ought to have been paid, until paid, together with costs and charges of protest, and in ca.se suit has to bebrought on such bill of exchange, &Ye per^cent. damages in addition. ^. (EFFECT OF NOTES, ETC.) Par. 3. All promissory notes, bonds, due bills and other instruments in writing, made or to be Tuade, by any person, body politic or corpo- rate, whereby such person promises or agrees to pay any sum of money or articles of £ei-sonal properti% or any sum of money In personal property, or acknowledges any sum of money or article of personal prop- erty to be due to any other pei;son, shall be taken to be due and payable, and the sum of money or article of personal property therein mentioned shall, by virtue thereof, be due and payable as therein expressed. V4. (NOTES, ETC., ASSIGNABLE BY IN- DORSEMENT.) Par. 4. Any such note, bond, bill, or other Instrument in writing, . 1107: 2 Starr & C Statutes, Chap. 98, p. 2780. made payable to any person named as payee therein, shall be assignable, by indorsement thereon, under the hand of such person, and of his assignees, in the same manner as bills of exchange are, so as absolutely to transfer and vest the property thereof in each and every assignee successively. V6. (SUIT BY ASSIGNEE.) Par. 5. Any assignee to whom such sum of money or personal property is, by such indorsement or indorsements, made paj'able, qx, in case of the death of such assignee, his ex ecuto r or administrator, may, in his own name, insti- tute and maintain the same kind of action for the recovery thereof, against the person who made and exocutecf any such note, bond, bill or other instrument in writing, or jVgainst his hojrs, executors or administra- tors, as might have been maintained against him by the obligee or payee, in case the same had not been assigned; and in every such action, in which judgment shall be giv- en for the plaintiff, he shall recover his damages and costs of suit, as in other cases. y^ (PAYMENT AFTER NOTICE OF AS- SIGNMENT.) Par. 6. No maker of any such note, bond, bill, or other instrument in writing, or other person liable thereon, shall be allowed to allege payment to the payee, made after notice of assignment, as a defense against the assignee. y^7. (RIGHTS OF HOLDERS— LIABILITY OF ASSIGNOR.) Par. 1. The rights of the laM'ful holders of promissory notes payable in money and the liability of all parties to or upon said notes shall be the same_a§ that of like parties to inland bills of exchange according to the custom of merchants. Ev- ery assignor of every other note, bond, bill or other instrumennn''\\'Titing mentioned In section III of this act shall be liable to the action of the assignee or lawful holder there- of, if such assignee or lawful holder shall have used due diligence by the institution and prosecution of a suit against l[he maker l[hereof, for the recovery of the money or property due thereon, or damages in lieu thereof. But if the institution of such suit would have been unavailing, or the maEer" had absconded or resided without or had left the state \v hen such instrument became due, such assignee or holder may recover ILLINOIS STATUTES ON BILLS AND NOTES. a>;jilnst tho nssiyuor as if due diligence by siiit had l)«HMi iisod. V 7n. (ALL rEUSONS LLVKLE MAY BE SUED IN ONE ACTION.) Par. 2. Persons severally liaMe upou bills of exchange or promissory notes, payable in money, may all or any of them sev»'rally be Included in the same suit at the option of the plaintiff, and judgment rendered in said suit shall be with- out prejudice to the rights of tlie several de- feuj^aub$ as between themselves. »^. (HOW JI'IXJMENT SHALL BE EN- TERED.) Par. 3. In any suit mentioned in the p^eet^ling section a jjeparate judgment may be entereil by default against any de- fendant or defendants severally liable who have been duly served with summons, and against whom the plaintiff wotild have been entitled to judgment had the suit been against su<-h defendant or defendants only. The suit shall thereby be severed, and shall proceed to trial against the other party or parties in the same manner as if it had been commenced against such other party or par- ties only, and if the plaintiff recover, judg- ment shall be entered against such one or more of the defendants as are found liable to him. but in no event shall the plaintiff be entitled to more than one satisfaction. \/!c. (WHEN DltAWER OK ENDORSER PAYS .lUDtniENT-PROCEEDINGS AS TO OTHERS.) Par. 4. Whenever the draw- er or endorser of an accepted bill ot ex- change or the endorser or guarantor of a promissory note shall have been joined with the acceptor of said bill or the maker of said note in a suit to enforce the collection there- of, and judgment has been recovered against any such drawer, endorser or guarantor who shall thereafter pay the same, the person so paying shall be entitled to have the judg- ment released as to him. but the same sliall, at his option, stand and may be enforced by execution under the order of the court against any other party thereto who remains liable to the party paying as upon said bill or note, for the reimbnrsement of the party so paying. If there be any contest as to such liability the court may order an issue to be made nj) between the contesting par- ties, which sliall be summarily determined as the court may direct. »^7d. (PROCEEDINtJS WHEN ALL THE I>EFENDANTS HAVE NOT BEEN SERV- ED.) Par. 5. In all suits on negotiable in- struments where any of the defendants are jointly liable, and only one or more, but not all of them have been served with summons, if Uie plaintiff recover, judgment shall be en- tered in form against all the defendants so jointly liable, but so far only as that it may be enforced against the joint property uf ail and the separate property of the defendants served. V 8. (NOTES. ETC.. PAYABLE TO BEAR- ER.) Par. 8. Any note, bond, bill or other m- strumeut in writing, made gaj'able to bearer, may be transferred by deliveiy thereof, ajid an action may be maintained thereon in the name of the holder thereof. Every indorser of any in.stniment mentioned in this section shall De held as a guarantor of payment unless oth- erwise expressed in the indorsement. ' 9. (FAILURE OF CONSIDERATION.) Par. 9. In any action upon a note, bond, bill, or other instrument in writing, for the pay- ment of money or property, or tlie performance of covenants or conditions, if such instrument was made or enteretl into without a good and valuable consideration, or if the consideration upon wliich it was made or entered into has wholly or in part failed, it shall be lawful for the defendiint to plead such want of considera- tion, or that the consideration has " gholly or in part failed; and if it shall appear that such instrument was .'aade or entered into without a good or valuable consideration, or that the consideration has wholly failed, the verdict shall be for the defendant; and if it shall ap- pear that the consideration has failed in part, the plaintiff shall recover according to the eq- uity of the case: provided, tliat nothing in this .section contained shall be construed to af- fect or impair the right of any bona fide as- signee of any instrument made assignable by tills act, when such assignment was made be- fore such instnuiient became due. -10. (FRAUD.) Par. 10. If any ^aud or cir- cumvention be used in obtaining the making or executing of any of the instruments aforesaid, such fraud or circumvention may be pleaded in bar to any action to be brought on any sucii instrument so obtained, whether such action bc^ brought by the party committing such fraud or circumvention, or any assignee of such instru- ment. 11. (DEFENSE.) Par. 11. If any such note, bond, bill or other instrument in writing shall be indorsed after the same becomes due, and any indorsee shall institute an action thereon agalns'f tlie luaker of the same, the defendant being maker .sh.iil be allowed to set up th<^ same deiease that he might have done had the action been instituted in the name and for the use of tlie person to whom such instrument was originally made payable, or any intermit diate holder. . 12. (SET-OFF.) Par. 12. In any acUon up- on a note, bond, bill, or other instrument in writing, whicli has been a.ssigned to or tran.s- ferred by deliverj' to the plaintiff after it be- came due, a set-off to the amount of tlie plain- tiff's debt may be made of a demand existing against any person or pei-sons who shall have assigned or transferred such instrument after it became due, if the demand be such as might \m\e been set-off against the assignor, while the note or bill belonged to him. 13. (PAYMENTS BEFORE ASSIGNMENT.) Par. 13. If any such note, bond, bill, or other instrument of writing, shall be assigned before tlie day the money or property therein mention- ILLINOIS STATUTES ON BILLS AND NOTES. ed becomes due and payable, and the assignee shall institute"an action thereon, the defendant may give in evidence at the trial a.py money or property actually paid_ on the said note, bond, bill, or other instrument in writing, before the said note, bond, bill, or other instrument in writing was assigned to the plaintiff, on prov_- ing that the plaintiff had sufficient notice of the said payment before he accepted or veceiv- ed such assignment. ^4. (LOST INSTRUMENTS.) Par. 14. In any action founded upon any note, bond, Ijill, or other instrument in writing, "oFTn which the same, if produced, might be allowed as a set- off in defense, if it shall appear that such in- strument was lost while belonging to the party claiming the ambimt due thereon, to entitle him to recover upon or set-off the same, lie may, in the discretion of the court, be required to execute a bond to the adverse party in a penalty at least double the amount of such note, bill or instrument, with sufficient security, to be approved by the court in which the ac- tion is pending, conditioned to indemnify the adverse party, his heirs, executors and admin- istrators, against all claims by any other per- son on account of sucli iiLstnament, and against all cost and expenses by reason thereof. L ^., 7 ; 15. (DAYS OF GRACE.) Par. 15. No prom- issory note, cheque, draft, bill of exchange, or- der or other negotiable or commercial instru- ment, shall be entitled to days of grace, but shall be absolutely paj'able at maturity. (As amended by act approved June 4, 1895. In force July 1, 18f>5.) L^6. (TIME.) Par. 16. In all computations of time, and of interest and discounts, a month shall be considered to mean a calendar month, and a year shall consist of twelve calendar months; and in computations of interest or dis- counts for any number of days less than a month, a day shall ue considered a. thirtieth part of a month, and interest or discoimts shall be computed for such fractional parts of a month upon the ratio which such number of days shall bear to thirty. ^ 17. (HOLIDAYS-MATURITY OF NEGO- TIABLE PAPER.) Par. 17. The following days, to-wit: The first cliiy of January, com- monly called New Years Day, the twenty-sec- ond day of February, the thirtieth day of May, the fourih^.day of July, the twenty-fifth day of December, commonly called Christmas Day, the first Monday in September, to be known as Latter Day, the twelfth day of Feb- ruary and any day appointed or recommended "by the governor of this state or by the presi- dent of the United States, as a day of fast or t hanksgiv ing, are hereby declared to be legal^ holid ays, and shall for all purposes whatsoever as regards the presenting for payment or ac- ceptance, the maturity and protesting and giv- ing notice of the dishonor of bills of exchange, bank checlcs and promissory notes or other ne- gotiable or commercial paper or instruments be treated and considered as is the first day of the week, commonly called Sunday. When any such liolidays fall upon Sunday, the Mon- day next f olio wing sliall.Jjg held and consider- ed such holiday. All notes, bills, drafts, checks or otlier evidence of indebtedness, falling dua or maturing on either of said days, shall be deemed as due or maturing on the day follow- ing, and when two (2) or more of these days come together, or immediately succeeding each otlier, then such instruments, paper or indebt- edness sliall be deemed as due or having ma- tured on the day following the last of such days. (As amended by act approved June 4, 1895. In force July 1, 1895.) Dl^BTS CONTRACTFD FOR LABOR PAYABLE IN BANKABLE CUR- RENCY. AN ACT to prevent extortion and compel the payment of debts contracted for labor in bankable currency. (Approved June 21, 1895. In force July 1, 1895.) 'As. (CHECK, ETC., FOR LABOR PAYA- BLE IN BANKABLE CURRENCY.) Par. 1. Be it enacted by the people of the state of Illi- nois, represented in the general assembly, that any time check or store order, issued or given as cohapensation for labor performed, shall be redeemable at the option of the person to whom the same was Lssued or given, or upon his written order, in banlcable cun-ency. Any person who violates tliis act shall be deemed guilty of a misdemeanor, and shall be punished by a tine not to exceed one hundred (100) dol- lars or confined in the county jail not to exceed thirty (30) days, or both, in the discretion of the court. lb ILLUSTRATIVE CASES ON BILLS AND NOTES. BABB.B.&N. (7)4 HISTORY OF NEGOTIABLE INSTRUMENTS. GOODW IN V. ROBARTS et al. (L. R. 10 Exch. 337.) Court of Exchequer. July 7, 1875. Error by the defendants on a judgment of the court of exchequer in favor of the plain- tiff. The material facts are stated in the opinion of the court. Mr. Batten, for plaintiff in error. Mr. Mac- kenzie, for defendants in error. COCKBURN, C. J. The question for our decision in this ease is whether certain scrip issued by the authority of the Russiau"j|of^ ernmenf, and certain other scrip issued by the authority of the Austro-Hungarian gov- ernment, is a negotiable siiuiity, for money, so that the transfer of it by a person not being the true owner to a bona fide holder, for value, can confer a good title on the lat- ter. The scrip in question was boug ht by the plaintiff through one Clayton, a stockbroker, and was allowed to remain in. Clayton's Bands, who"" unlawfully pledged it_svith the (le?endants, who are bankers, as security for a loan of money. Clayton having become bankrupt and having" absconded, the defend- ants sold the scrip at the market price of the day, and the plaintiff brings his action to re- cover the amount realized on such sale. The scrip in question was in the following form:— "1873. C. 1873. Imperial Govern- ment of Russia. Issue of £15,000,000 sterling nominal capital in 5 per cent, consolidated bonds of 1873. Negotiated by Messrs. N. M. Rothschild & Sons, London, and Messrs. De Rothschild Brothers, Paris. Bearing inter- est" half-yearly, payable in London from 1st of December, 1873. Scrip for one hundred pounds stock. No. . Received the sum of twenty pounds, being the first instalment of 20 per cent, upon one hundred pounds stock, and on payment of the remaining in- stalments at the period specified, the bearer will be entitled to receive a definitive bond or bonds for one hundred pounds after re- ceipt thereof from the imperial government. London, 1st December, 1873. The instal- ments are to be paid at our office as follows: £15 per cent., or £15, on the 5th February, 1874; £15 per cent, or £15, on the Oth of March, 1874; £20 per cent., or £20, on the 2nd May, 1874; £23 per cent., or £23, on the 0th .Tune, 1874. Subscribei's may pass the sam»> under a discount at 3 per cent, per annum, on any Monday or Thursday after the l(>th in- stant. In default of payment of these instal- ments at the proper dates, all previous pay- ments will be liable to forfeiture." Then fol- low four other receipts for £20 each, making up the £100, for which the bond is after- wards to be given. The scrip issued by the authority of the Austro-Hungarian government was in a pre- ■cisely similar form. The scrip in question was issued by Messrs. De Rothschild as the agents of the Russian and Austro-Hungarian governments, they being employed by these governments to negotiate and raise a loan for them respectively on government bonds, bear- ing interest, to be afterwards issued in ex- change for the scrip when all the instal- ments of the sum for which the scrip was is- sued should Jiave been paid up. No question is raised as to the fact of Messrs. De Roth- schild having acted in the manner as agents of the two governments, or of the scrip hav- ing been issued by the authority of the lat- ter. The bonds issued on the last instalment being paid up were, as will be seen on refer- ence to the .special case in which they are set out, in conformity with the terms stated in the scrip. It is only necessary to point out that the bond, agreeably to the terms of the scrip, is made payable to bearer. The 0th paragraph of the special case con- tains the following statement, upon which, as it appears to us, the decision of the case turns: "The scrip of loans to foreign govern- ments, entitling the bearer thereof to bonds for the same amount when issued by the gov- ernment, has been well known to and largely dealt in by bankers, money dealers, and the members of the English and foreign stock ex- changes, and through them by the public, for over fifty years. It is and has been the usage of such bankers, money dealers, and stock exchanges, during all that time, to buy and sell such scrip and to advance loans of money upon the seciu-ity of it before the bonds were issued, and to pass the scrip up- on such dealing by mere delivery as a nego- tiable instrument transferable by delivery, and this usage has always been recognized by the foreign governments or their agents de- livering the bonds when issued tojhe bearers of the scrip. Tliis usage extended alike to scrip issued by their agents in England, and it extended to the scrip now in question, which was largely dealt in as above men- tioned. Such scrip often passes through the hands of several buyers and dealers in suc- cession before the issue of the bonds repre- sented by it." L. R. 10 Exch. 79. The contention on the part of the plaintiff was that, scriji of this description not coming under the category of any of the securities for money which, by the law merchant, are capable of being transferred by indorsement or delivery.— indeed, not being a .security for money at all, but only for the future delivery of a bond,— the right of the true owner could not be divested by the fraudulent transfer of tiie chattel by a person who had no title as against the owner. On the part of the defendants it was con- tended that the finding as to general usage brought the case within the decisions in Gor- gier V. Mieville, 3 Barn. & C. 45, and Attor- ney General v. Bouwens, 4 Mees. & W. 171. In the former of these cases a bond of the king of Prussia, payable "to every person who should for the time being be the holder of the bond," had been, as in the present in- 10 HISTORY OF NEGOTIABLE INSTRUMENTS. stance, unlawfully pledged with the defend- ants In the action by an af;eut who had been intrusted with it for the purpose of receiving the interest on it. The owner liaving brought an action to recover the bond, it was proved on the trial that bonds of this description were sold in the market, and passed from hand to hand daily, like exchequer bills, at a variable price according to the state of the market. Upon these facts Ix)rd Chief Jus- tice Abbott was clearly of opinion that this bond might be pledged to any person who did not know that the person pledging it was not the real owner, and he directed the jury to find a verdict for the defendants, unles.s they thought that the defendants knew that Messrs. Agassiz & Co., the pledgors, were not the owners of the bond at the time when they depositeil it in their hands. A rule nisi for a new trial, having been obtained, was afterwards discharged. Abbott, C. J., giving judgment says: "This instrument in its form is an acknowledgment by the king of Prussia that the sum mentioned in the bond is due to every person who shall for the time being be the holder of it; and the principal and in- terest is payable in a certain mode and at certain periods mentioned in the bond. It is, therefore, in its nature precisely analogous to a banker's note payable to bearer, or to a bill of exchange indorsed in blank. Being an In- strument, therefore, of the same description, it must bo subject to the same rule of law, that whoever is the holder of it has power to give title to any per.son honestly acquiring it. It is distinguishable from the case of Glyn v. Baker, 13 East. ;">(.«), because there it did not appear that India bonds were negotiable, and no other person could have sued on them but the obligee. Here, on the contrary, the bond is payable, to the bearer, and it was proved at the trial that bonds of this description were negotiated like exchequer bills." In Attor- ney General v. Buuwens. 4 Mees. & W. 171, the question as to the negotiable character of foreign bonds arose in a different form, the question being whctljcr Russia. Danish, and Dutch bonds, of wliich a testator dying in this country was holder at the time of his death, were liable to probate duty. In a special verdict taken at the trial it was ex- pressly found "that the said Russian, Danish and Dutch bonds, respectively were and are, and always have been, marketable secm*ities within this kingdom, and always have been sold and transfernil within this kingdom by delivery only, and the bearers thereof have always been deemed ami reputed to be, and have always been dealt with as being, legally entitled to the principal moneys secured by the said bonds respectively, and to the inter- est or dividends from time to time arising or accruing in respect of the same. It never has l)ecn nor is it necessary to do or perform any act whatsoever out of the kingdom of England, in order to render a transfer of any of the said bonds valid, and tin- bearers of the said bonds, respectively, have always been treated and dealt with by the agents of the empire of Russia, and of the kingdom of Hol- land and Denmark, as the persons duly en- titled to the principal moneys sectu-ed by the said bonds respectively, and the interest or dividends thereof, and such agents have al- ways paid all moneys due and payable for and in respect of the said bonds respectively, according to the tenor and effect thereof to the bearers of the same." In like manner, in Ileseltine v. Siggers. 1 Exch. 85G, 18 Law J. Exch. Kit). Spanish bonds were treated as passing by mere delivery. Strenuous efforts were made by Mr. Ben- jamin in his able argument on behalf of the plaintiff" to distinguish the present case from Gorgier v. Mieville. 3 Barn. & C. 45. He in- sisted, lii-st, that although it must be admitted that if a bond had been given in lieu of this scrip, the bond would have been a negotiable instrument, as the case would then have come within Gorgier v. Mieville, 3 Barn. & C. 45, here there was no engagement on the part of the foreign government. The only party sign- ing the scrip ov who could be held bound by it wei-e the Messrs. De Rothschild; and the per- sons advaucing their money, and taking the scrip could look only to them. Secondly, that even assuming that the issuing of the scrip was to be taken to be the act of the foreign government, yet that as it had been issued in London, aud the parties taking it had ad- vanced their money in this country, the con- tract must be taken to have been made here, and must be subject to the law of England. That when a foreign sovereign negotiated a loan in this country, through his agent, it was in effect the same thing as though such sov- ereign had himself come to this country and entered into the coutract in person. That, consequently, in either view, the contract aris- ing on the scrip must be taken to have been made liere and must be dealt with according to English law. That this being so. the case of Crouch V. Credit Foncier of England, L. R. 8 Q. B. 374, was an authority which estab- lislu'd that it was not competent to anyone by tlie law of England, to give to a security, not negotiable by the law merchant, the char- acter of negotiability, by making it payable to bearer, even though such security were security for money. That, a fortiori, this scrip, not being a promise to pay money, but only to give a bond when all the instalments should liave been paid up, could not have the character of negotiability given to it by being made payable to bearer. That c;hoses in ac- tion not being assignable by the general com- mon law, it was only by the law merchant which was recognized by the common law and adopted by it that a particular class of securities for money could be made nego- tiable, either by indorsement, or, by being made pjiyable to bearer; and that this class of securities was contined to bills of exchange, promissory notes, and drafts payable to beaf^ er. Tliat this scrip did not coincide with either of the seciu-ities for money to which by HISTORY OF NEGOTIABLE INSTRUMENTS. 11 the law merchant the quality of being so ren- dered negotiable had been conceded; the more so as in fact it was not a security for money at all, but only an agreement to give such a security in the shape of a bond. That the bonds of foreign governments had been held to be negotiable by the courts of this country, not because they were negotiable by the law of the couutrj' in which they were made, but because they were in substance and effect promissory notes. We entirely dissent from the contention that the contract" in question is one in which theMessrs. De Rothschild can be looked upon as principals. And though our decision on that head may not be essential to the con- clusion we have arrived at on the case, we think it desirable in a matter in which the public are so much interested that our view should be made known. It is plain on the face of the document that the Messrs. De Rothschild only profess to be acting as the agents of the foreign governments. The law on this subject is correctly laid down in Story on Agency, in the chapter on the Liabilities of Public Agents (section 302). Collecting the English and American authorities in a note, the learned jm-ist writes as follows: "In the ordinary course of things, an a gent coutract- ing oa behalf of the government, or of the public, is not persQualij' boimd by such a con- tract, even though he would be by the terms of the contract, if it were an agency of a private nature. The reason of the distinction is, that i t is not to be presumed, either that the public^ agent means to bind himself per- sonally in acting as a functionary of the gov- ernment, or that the party dealing with him in his pubUc character, means to rely on his individual responsibility. On the contrary, the natural presumption in such cases is that the contract was made upon the credit and responsibility of the government itself, as pos- sessing an entire ability to fulfil all its just contracts, far beyond that of any private man, and that it is ready to fulfil them not only with good faith, but with punctilious promptitude, and in a spirit of libei-al cour- tesy. Great public inconvenience would re- sult from a different doctrine, considering the various public functionaries which the gov- ernment must employ in order to transact its ordinary business and operations; and many persons would be deterred from accepting of many offices of trust under the government, if they were held personally liable upon all their official contracts. This principle not only applies to simple contracts, both parol and written, but also to instruments imder seal, which are executed by "agents of the government in their own name, and purport to be made by them on behalf of the govern- ment; for the like presumption prevails in such cases, that the parties contract not per- sonally, but merely officially within the sphere of their appropriate duties." Chancellor Kent lays down the law to the like effect (2 Comm., 7th Ed., p. 810): "There is a distinction in the books between public and private agents on the point of personal responsibility. If an agent, on behalf of the government, makes a contract and describes himself as such, he is not personally bound, even though the terms of the contract be such as might, in a case of a private nature, involve him in a personal obligation. The reason of the distinction is, that it is not to be presumed that a public agent meant to bind himself individually for the government, and the party who deals with him in that character is justly supposed to rely upon the good faith and undoubted ability of the gov- ernment. But the agent in behalf of the public may still bind himself by an express engagement, and the distinction terminates in a question of evidence. The inquiry in all cases is, to whom was the credit, in the con- templation of the parties, intended to be giv- en. This is the general inference to be drawn from all the cases, and it is expressly de- clared in some of them." It is true these authors are speaking of per- sons acting as agents for their own govern- ments; but the reasoning applies equally to persons acting as agents for a foreign gov- erjQn^gat. and the same presumption must arise in both cases. Nor can we suppose that the persons takjng this scrij) did so otherwise than thi'ough their laiili in the honour of the foreign government, just as they woidd have had to trust to it on their afterwards receiv- ing the bonds in lieu of the scrip. They would then be equally without legal redress against the foreign government, and must have trusted to its honour in the fulfilment of its engagement. We think it unnecessary to enter upon the question whetheiTthe contract tlms entered into is to be considered as a Kus-siau nr as an English contract, as we agree in thinking that its negotiable chai-acter, if it exists at all, must depondjQol;_-Oli what might be its negotiability by the foreign law, but on how far the imiversal usage of the monetary world has given it that character here. "The ques- tion," says Tindal, C. J., in Lang v. Smith, 7 Bing. 284, at page 293, "is not so much what is the usage in the country whence the instiii- ment comes as in the countrj^ where it pass- ed." The substance of Mr. Benjamin's argu- ment is that, because the scrip does not cor- respond with any of the forms of the securi- ties for money whicli have been hitherto held to be negotiable by the law merchant, and does not contain a direct promise to pay money, but only a promise to give seciu'ity for money, it is not a seciu'ity to which, by the law merchant, the character of ne- gotiability can attach. Having given the fullest consideration to this argument, we are of opinion that it cannot prevail. It is founded on the view that the law merchant thus referred to is fixed and stereotyped, and incapable of being expanded and enlarged so as to meet the wants and requirements of trade in the varying circumstances of com- 12 HISTORY OF NEGOTIABLE INSTRUMENTS. morce. It Is true that the law morchant Is sometimes spoken of as a fixed body of hiw, forming part of the common law, and, as it were, coeval with it But, as a matter of legal history, this view is altogether incor- rect. The l aw m erchant thus spoken of with reference to bills of exchange and other ne- gotiable seiMirities. though forming part of the general body of the lex mercatoria, is of comparatively recent origin. It is neither more nor less than the u.sages of lucrchants and traders in the different departments of trade, ratified by the decisions of courts of law, which, U110U such usages being pr«)ved before them, have adopted them as settled law, with a view to the interests of trade and the public convenience, the court proceeding herein on the well-known principle of law that, with reference to transactions in the diftereut departments of trade, courts of law. In giving effect to the contracts and dealings ■of the parti»>s. will as.sume that the latter have dealt with one another on the footing of any custom or usiige prevailing generally in the particular department. By this process, what before was usage only, unsanctioned by legal decision, has become engrafted upon, or intX)rporated into, the common law, and may thus be said to form part of it. "When a general usage has been judicially ascertained and established," says Lord Campbell, in lirandao v. Barnett. 12 Clark & F.. at page 805, "it becomes a part of the law merchant, which courts of justice are l>ound to know and recognize." Bills of exchange are known to be of com- paratively modern origin, having been first brought into use, so far as is at present known, ^the Florentines in the twelfth, and by the Venetians about the thirteenth, ceji- tury. The use of them gradually found its vay into France, and, still later, and but .slowly, into England. We find it stated in a law tract by Mr. Macleod, entitled "Specimen ■of a Digest of the Law of Bills of Exchange," printed, we believe, as a rejiort to the gov- ernment, but which, from its research and abilit}', deserves to be produced in a form cal- culated to insure a wider circulation, that Richard Malynes, a London merchant, who publislied a work called the "Lex Mercatoria," in H;l'-j, and who gives a full account of these bills as u.sed by the merchants of Amsterdam, Hamburg, and otiier places, expressly states that such bills were not used in England. There is reason to think, however, that this is a mistake. Mr. Maclcod shews that prom- issory notes, payable to bearer, or to a man and his assigns, were known in tlie time of Edward IV. Indeed, as early as tiie statute of 3 Rieh II., c. 3, bills of exchange are re- ferred to as a means of conveying money out of the realm, though not as a process in use among English merchants. But the fact that a London merchant, writing expressly on the law merch.int, was unaware of the use of the bills of exchange in this coimtry, shews that that use at the time he wrote must have been ' limited. According to Professor Stor>', who 1 herein is, no doubt, perfectly right, "the In- triKluction and use of bills of exchange in England," as indeed it was everywhere else, "seems to have been founded on the mere practice of merchants, and gradually to have j acquired the force of a custom." With the i development of English commerce the use of 1 these most convenient instruments of com- mercial traffic would, of course, increase; yet, according to Mr. Chitty, the earliest case I on the subject to be foimd in the English books is that of Martin v. Boure, Cro. Jac. 6. i in the first James L Up to this time the practice of making these bills negotiable by indorsement had been unknown, and the ear- I lier bills arc found to be made payable to a ; u^an and his assigns, though in some in- stances to bearer. But about this period— that is to say, at the close of the sixteenth or the coiumcucement of the seventeenth cen- tury—the practice of making bills payable to order, and transferring them by indorsement, took its rise. Hartmann, in a very learned work on Bills of Exchange, recently published in Germany, states that the first known men- tion of the indorsement of these instruments occm-s in the Neapolitan Pragmatica of 1007. Slavery, cited by Mons. Nouguier, in his work "Des Lettres de Change," had assigned to it a later date, namely, 1('.20. From its obvious convenience this practice speedily came into general use, and, as part of the I general custom of merchants, received the I sanction of our courts. At first the use of bills of exchange seem to have been confined j to foreign bills between English and foreign merchants. It was afterwards extended to I domestic bills between traders, and finally to bills of all persons, whether traders or not. See Chit. Bills (8th Ed.) p. 13. In the mean- time, promissory notes had also come into use, ditfering herein from bills of exchange: that they were not drawn upon a third party, but contained a simple proiuise to pay by the maker, resting, therefore, upon the security of the maker alone. They were at. first made payal>lolitan bonds, with coupons at- tached to them, which latter referretl to a certilicate. The plaintiff's ag»nt. being in pos- session of the coupons belonging to the plain- tiff, but not of the certilicate, fraudulently pledged the coupons with the defendant, who took them bona tide. On an action by the plaintiff to recover the amount received by the defendant on the coupons. Tindal, C. J., left it to the jiu'y to say whether the coupons without tlie certificates "passed from hand to hand like money or bank notes;" in other words, "whether they had acquired, from the course of dealing pursued in the city, the character of bank notes, bills of exchange, dividend warrants, exchequer bills, or other instruments which formed ixirt of the cur- rency of this country." The jury, indeed, found in the negative, but it was held by the court of common pleas that the question had been rightly left to them. If the iisage had been found the other way, and the court had been satisfied with the verdict, it would no doubt have been upheld. We must by no means be understood as saying that mercantile usage, however ex-, tensive, should be" allowed to prevail, if con- trary to positive law, including in the latter such usages as, having been made the sub- ject of legal decision, and having been sanc- tioned and adopted by the courts, have be- come, by such adoption, part of the common law. To give effect to a usage which in- volves d defiance or disregard of the law would be obviously contrary to a fundamen- tal principle. And we quite agree that this would apply quite as strongly to an attempt to set up a new usage against one which has become settled and adopted by the common law as to one in conflict with the more an- cient rules of tlie common law itself. Thus, it having btvu derided in the two cases of More V. Manning, 1 Comyu. 311, and Acheson v. Fountain, 1 Strange. .">7, that when a bill of exchange was indorsed to A. B., without the words "or order," the bill w;as neverthe- less assignable by A. B. by fm-ther indorse- ment. Lord Mansfield and the comt of king's bench, in the case of Edie v. East India Co.. '2 Burrows. 1210. held that evidence of a contrary usage was inadmissible. In like manner, in Grant v. Vaughan, 3 Burrows, 151G, where a cash note payable to bearer had been lost by the owner, but had been taken by the plaintiff bona fide for value, on an action on the note by the latter against the maker. Lord Mansfield having left it to the jiuy to say "'whether such drafts as this, when actually paid away in the course of trade dealing and business, were negotiable or in fact and practice negotiable," and the jury, influenced no doubt by the natural de- sire to protect the owner of the note, hav- ing found for the defendant. Lord Mansfield and the court here again set the verdict aside, on the ground that, the law having been set- tUnl by former decisions that notes payable to bearer passed by delivery to a bona fide holder, the judge ought to have directed a verdict for plaintiff. If we could see our way to the conclusion that, in holding the scrip in question to pass by delivery, and to be available to bearer., we were giving effect to a usage incompati- ble either with the common law or with the law merchant as incorporated into and em- bodied in it, our decision would be a very different one from that which we are about to pronounce. But, so far from this being the case, we are, on the contrary, in our opin- ion, only acting on an established principle of that law in giving legal effect to a usage, now become universal, to treat this form of security, being on the face of it expresslj- made ti-ansferable to bearer, as the repre- sentative of money, and. as such, being made to bearer, as assignable by delivery. This being the conclusion at which we have ar- rived, the judgment of the court of exchequer will be athrmed. Judgment affirmed. PKOMLSSOKY NOTE— WHEX NEGOTIABLE. i: HOPKINS et al. v^'^AN ZANDT. (40 111. App . 635.) Appellate Court of Illinois. .June 2, 1891. Error to circuit court, Cook county; Kirk Hawes, Judge. The declaration in this action was the ordinary form in assumpsit upon a nego- tiable promissory note, with count for lirst indorsee against makers and the common counts. The pleas were non assumpsit, a plea of failure of consideration, setting up that the note was given to Schuler, the payee named therein, for purchase of certificate No. 113, for fifty shares of stock in Hopkins Manu- facturing Company, in case Schuler should wish to sell at maturity of note; that the certificate was never delivered nor tendered; and a plea alleging the execution was ob- tained by fraud, covin, and deceit. The in strum ent declared on and admitted in evidence is as follows: "$5,000. Chicago, August lo, 1SS2. "On the first day of .July next after date, we promise to pay to the order of 11. B. Schuler, five thousand dollars, at the Com- mercial Nat. Bank, with interest at six per cent, per annum. Value received. "Harvey L. Hopkins. "Daniel B. Whitacre. "Wm. F. Tucker. "No. Due "Qi£i of stock No. 113 for .^U shares of stock in the Hopkins Mfg. Co., to be s urren- ack of a promissory note, which has relation to the subject-matter of the note, by the maker of it, before delivery, is a part of the contract., Leeds v. Lanca- shire, 2 Camp. 205; Johnson v. Heagan, 23 Me. 329; Ueywood v. Perrin, 10 Pick. 228; PROMISSORY NOTE— WHEN NEGOTIABLE. 19 Wheelock v. Freeman, 13 Pick. 165; Manu- facturing Co. V. Parr, 8 Neb. 379, 1 N. W. 312; 2 Pars. Notes & B. p. 539; 1 Daniel, Neg. Inst. § 149; 1 Rand. Com. Paper, 129; Chit, Bills, 155; ByJes, Bills, 100; Norton, Bills & N. 34, 3G-3S. A promissory note must be payable abso- lutely, and at all events, and not depend on ji contingency, in order to come within the •definition of a promissory note, so as to be negotiable. Lowe v. Bliss. 24 111. 108; Mc- Clellan v. Coffin. 93 lud. 45G; Kelley v. Hem- mingway, 13 111. (HH; Smalley v. Edey. 15 111. 324; Bank v. McCrea, 100 111. 2S1; Beez- ley V. .Tones, 1 Scam. 34; U ill i Ian v. Myers, 31 111. 525; Hunt v. Divine. 37 111. 137; Hus- band V. Epling. 81 111. 172; Baird v. Under- wood, 74 111. 170; Story, Prom. Notes, § 22; 1 Daniel, >eg. Inst. §§ 41, 45; 1 Pars. Notes & B. p. 48; Norton, Bills & N. 34, 30-38. 20 NOTE— DEFINITION— ATTORNEY'S FEES. DOUSE Y V. WOLFF. (32 N. E. 495. 142 1]!, 5S9.) Supreme Court of Illinois. Nov. 2, 1892. WOLFF V. DORSEY. (3S 111. App. 305.) Appellate Court of Illinois. Nov. 21, 1890. (32 N. E. 495, 142 111. 589.) Appeal from appellate court, Third district; Phillips, Judge. Assumpsit by Marcus A. Wolfif agaiust Wil- liam M. Dorsey. Tlaiutiff obtainotl juds- ineut, which was affirmed by the appellate lourt. ronding appeal, plaintiff died, and Eliza Wolff, his administratrix, was substi- tuted as appellee. Defendant appeals. Af- firmed. This is an action of assumpsit besun in the circuit court of Macoupin county on May IG, 1S89, by Marcus A. Wolff against the appel- lant, Dorsey, to recover, as attorney's fees, the sum of 10 per cent, upon the amount found to be due upon the promissory notes hereinafter mentioned, in a suit theretofore brought upon said notes. The defendant de- murred to the declaration. The demurrer was overxnded. .The defendant excepted to the order overruling the demurrer, and elect- ed to stand by his demurrer. Thereupon plaintiff's damages were assessed at $1,G19, and judgment was rendered in his favor for that amount. The judgment has been affirm- ed by the appellate coiu-t, from which latter court the case is brought here by appeal. The declaration sets up three notes ., exe- cuted by the defendant, William M. Dorsey, dated December 31, 1885, payable to the or- der of George W. Belt, at the banking house of Bolt Bros. & Co., in Bunker Hill, 111.,— the first for $13,580.84, on or before two years after date; the second for |.")43.47, on or before eighteen months after date; and the third for .$543.47, on or before two years after date, — each of which notes, after the maker promises for value received ttj pay the amount therein named to the order of said Belt, contains the following words: "With eight per cent, interest per annum after ma- turity, and, if not paid when due and suit is brought thereon, thou we promise to pay ton per cent, on the amount due hereon in addi- tion jis an attorney's fee, and to bo recovered as part of this note, or by separate suit." By the terms of each note, also, the makers and indorsors waive prosentmont for pay- ment protest, and notice, etc. The declara- tion then avoi-s that Dorsey delivered said notes to Belt, and Belt indorsed the same to plaintiff, etc.; that said notes were not paid when due; that suit was brought thereon; that the said 10 per cent, was not paid be- fore or after said suit was brought, and was not recovered in said suit so brought upon said notes as a pait thereof, etc. One of the counts;, in addiiion to the foregoing aver- ments, alleges that, after the maturity of the notes, they were placed in the hands of an attorney for suit; that suit was brought there- on, and, the 10 per cent, attorney's fee not having been j-ecovered therein, the plaintiff, before the bringing of llie present suit, paid his attorney for his services in said formei- suit the said sum of $1,619.20. Palmer & Shutt, for appellant. A. N. Yan- cey, for appellee. MAGRUDER, J. (after stating the facts). The main question presented by the as- signments of error is whether or not the notes lU'scribod in the declaration are ne- gotiable instruments. It is claimed by the appellant that the notes are made nonnogo- tiaLle lay the insertion therein of the written promise of the maker that, if they were not paid when due and suit was brought tnere- on, he would pay 10 per cent, on the amount duo thereon in addition, as an attorney's fee, and to bo recovered as a part of the notes, or by separate suit; that the indorsements by the payee did not confer the right upon the indorsee to bring suit in his own name up- on the notes; that, even if such indorsements should be held to have conferred upon the assignee the right to bring a suit upon the notes in his own name, it did not confer upon such assignee the right to bring a separate suit upon the stipulations or promises as_ti> the attorney's fee. Various definitions have been given of a " promissor y noje." In general terms, it may be dofinocTToTje'a written promise by one per- son to pay to anoth eiiL-iierson therein named^ or order a fixed sunTof money, at all events, and at a time specified therein, or at a time which must certainly ai'rive. Lowe v. Bliss, 24 111. 168; Chicago Railway Equipment Co. V. Merchants' Bank, 136 U. S. 2158, 10 Sup. Ct. 999; Story, Prom. Notes, p. 2; 3 Kent, Comm. 74; 2 Am. & Eug. Enc. Law, p. 314. A note is none the less negotiable because it is made payable on or before a named date. Chicago Railway Equipment Co. v. Mer- chants' Bank, supra; Cisne v. Chidester, 85 111. 523; Ernst v. Stockman, 74 Pa. St. 13. An instriiment for a specified sum of money, and also for the payment of something else, the value of which is not ascertained, but de- ponds upon extrinsic evidence, is not a note. Lowe V. Bliss, supra. A note which provides for the payment, after the maturity thereof, of a certain rate of interest per annum, not exceeding the legal rate, is not made condi- tional by svich provision. Houghton v. Fran- crs,"29 111. 244; Reeves v. Stipp, 91 111. 609; Laird v. Warren, 92 111. 204. Applying those definitions to the notes mentioned in the declaration in this case, we find that each note is "a note for a sum certain, payable at a fixed date." Dietrich V. Bay hi, 23 La. Ann. 767. The notes are not payable on a contingency, because the maker has the option of paying on or before a certain date; nor are they conditional in- strumouts because tliey contain the words, NOTE— DEilNITlOX— ATTORNEY'S FEES. 21 "with eight per cent, interest per annum aft- er maturity." The portion of each note which precedes the stipulation or promise as to the attornej^'s fee is in itself a complete promissory note. For example, the part of the first note that goes before the provision for the fee is as follows: "$13,580.84. Bun- ker Hill, Ills., Dec. 31st, 1885. On or be- fore two years after date, for value received, we or either of us promise to pay to the or- der of George W. Belt, thirteen thousand five hundred eighty-six and 84-100 dollars, paya- ble at the banking house of Belt Bros. & Co. in Bunker Hill, Illinois, with eight per cent, interest per annum after maturity," etc. "Here the sum, time of payment, and payee are certain, and these are the essential char- acteristics of a promissory note." Houghton V. Francis, supra. The promise to pay the attorney's fee is a promise to do something a?ter the note matm'es. It does not affect the character of the note before or up to the time of its maturity, either as to certainty In the amount to be paid, or fixedness in the date of payment, or definitoness in the de- scription of the person to whom the payment is to be made. The .stipulation or promise as to the attorney's fee cauopt, therefore, affect the negotiability of the note, because the ne^ gotiaMity of a promissory note is, for all ^^ctical purposes, at an end wlien it ma- tures. Parties taking it after its matm-ity cannot claim to be innocent holders without notice of defenses which may bo set up by the maker against its collection. If the stip- ulation for an attorney's fee is of such a char- acter as to make the amount to be paid at maturity uncertain or indefinite, the note cannot be regarded as negotiable so as to au- thorize a suit upon it by the indorsee; but, whei'e the stipulation does not have such an effect, its insertion in the note does not de- stroy the negotiability of the note. When the amount to be paid at maturity is certain and fixed, the maker knows what he has to pay, and the holder knows what he is to receive, from the face of the note itself. Commei-cial paper is expected to be paid prompily wheu it is due. A stipulation for an attorney's fee, which is only to be recov- ered if the note is not paid when due and suit is brought upon it, can have no force except upon the maker's default. If he keeps his contract by paying his note at its maturity, he will not be obliged to pay the additional amount; and no element of luicertainty en- ters into the contract. By the stipulation, the maker offei-s to the holder an assurance of his own confidence in his ability to pay with- out suit, and thereby adds to the value of the paper as promising less expense in its collection. It has been said that "the addi- tional agreement relates rather to the reme- dy upon the note, if a legal remedy be pur- sued, than to the sum which the maker is bound to pay; and that it is not different in its character from a cognovit, which, when attached to promissory notes, does not de- stroy their negotiability." Daniel, Neg. Inst. (4th Ed.) §§ G2, 02a. We d o not thin k that the negotiability of the notes in this case w^ 4£5t^oyed by the stipulations therein as to attorneys' fees. The view here expressed is sustained by the authorities. In Nlckei-son v. Sheldon. 33 111. 372. the note contaiiu'd this provision; "And we fm'tlier agive, if the above note is not paid without suit, to pay ten dollars, in addition to the above, for attorneys' fees." In that case the plaintiff did not declare for the $10, and hence the recovery was only for the principal and interest due on the note, but we held the note to be negotiable under the statute, and siild: "The amount due by this note is absolutely certain, and it posses- ses all the requisites of a negotiable instni- ihent under the statute. Stewart v. Smith. 28 111. 307. There is no imcertainty as to the precise sum of money to be paid on the maturity of the note." Bane v. Gridley, G7 111. 388; Gobble v. Linder, 7G 111. 157; Barton V. Bank. 122 111. 3.52, 13 N. E. 503. In Stone- man V. Pyle, 35 Ind. 103, the note contained a stipulation for the payment of attorneys' fees should suit be instituted thereon, and it was said: "We see no reason, on principle or authority, or on grounds of public policy, for holding that such a stipulation destroys the commercial character of paper otherwise hav- ing that character. • • ♦ So here the defendant had the right to pay the face of the note when due. and avoid the attorneys' fees. As long as the note retained the peculiar characteristics of commercial paper, viz.. U£ t2.the_timc of its maturity and dishonor, the amount to be paid on the one hand, and re- covered on the other, was fixed and definite." Smock v. Ripley, (!2 Ind. 81. In Gaar v. Banking Co., 11 Bush, 180, there was in- dorsed upon the back of an accepted bill of exchange an agreement by the drawers. In- dorsers, and acceptors thei'cof "to pay a rea- sonable attorney's fee to any holder thereof if the same shall hereafter be sued upon, and also pay interest at the rate of ten per cent per annum after maturity imtil paid;" and it was claimed that the written agreement so indorsed upon the bill destroyed its negotia- bility on the ground that the amount of the attorney's fee was not ascertained, and hence that the bill was for an uncertain amount; but the court held otherwise, and said: "The amount to be paid at maturity was fixed and certain, and it was only in the event that the bill was not paid when due that any uncer- tainty arose. The reason for the rule that the amount to be pai^must In- fixed and cer- tain is that the paper is to ln'come a sul>sti- tute for~inoney. and this it cannot be, unless It can be ascertaineTfrom it ex;|ctly how much money it i-epresents. As long, therefore, as it remains a substitute for money, the amount which it entitles the holder to demand must be fixed and certain; but when it Is past due it ceases to have that pi-culiar tpiality de- nominated 'negotiability,' or to perform the NOTE- DEFINITION- ATTORNEY'S FEES. office of money; and hence auythiu.:: which only renders its amount uncertain after it has ceased to be a substitute for money, but which in no wise affected it until after it had performed its office, cannot prevent its be- coming negotiable paper." In Seaton v. Scovill. IS Kan. 433. a note for the payment of a certain sum, "with interest at twelve per cent, per annum after due until paid, also costs of collectins, including reasonable at- torneys' fees if suit be instituted on this note." was held to be negotiable; and Mr. Justice Brewer, delivering the opinion of the court, quoted with approval the above extract from the Kentucky case, and said: "The amount due at the maturity of the paper is certain; and the only uncertainty is in the amount which shall be collectible in case the maker defaults, at the maturity of the paper, in his promise to pay, and the holder is driv- en to the necessity of instituting a suit for collection, and then only as to the expenses of such collection." In Sperry v. Horr, 32 Iowa, 1S4, each of the notes sued xipon was for a certain sum, and contained the follow- ing words: "With ten per cent, interest un- til paid; if not paid when due, and suit is brought thereon, I hereby agree to pay col- lection and attorneys' fees therefor;" and the court held them to be negotiable, saying the attorneys' fees are not part of the sums due on the notes, but are an amount for which the maker may become liable when a legal reme- dy is enforced against him. Shugart v. Pat- tee, 37 Iowa, 422; Bank v. Breese, 39 Iowa, 640; Howenstein v. Barnes, 5 Dill. 482, Fed. Cas. No. G,7SG; Schlesinger v. Arline, 31 Fed. 648; Sewing Mach. Co. v. Moreno, 6 Sawy. 35, 7 Fed. 80G. Inasmuch as the note is negotiable, and passes by indorsement to the assignee, the agreement as to the attorney's fee also passes to such assignee as a part of the note. The stipulation or promise to pay the attorney's fee is not made with the payee alone. The note is payable to the payee or order. The promise is as much to the holder as to the original payee. The fee is to be paid if the note is not paid when due, whether it is then owned by the payee or by any other holder. Moreover, the attorney's fee is an incident to the main debt and passes with it. Bank v. Ellis. 2 Fed. 44; 2 Daniel, Neg. Inst. § C2a; Adams v. Addington, 10 Fed. S9. The prom- ise to pay it, thereby lessening the cost of collection in case of suit, gives the note cur- rency as well as security, and is regarded as a provision for the indorsee or holder as well as for the payee. Bank v. Ellis, Sawy. 9tj, 2 Fed. 44. Daniel, in his work on Negotia- ble Instniraouts, (volume 2, § G2a,) says: "When the added stipulation is deemed valid, and the bill or note negotiable, such stipula- tion becomes a part of the acceptor's or in- dorser's contract, and need not be sued for by the attorney, but it is recoverable by the holder of the instrument" See cases cited In note 3. A further question arises as to the mode of enforcing the collection of the fee. It is said that it cannot be recovered in a separate suit if it is not embraced in the recovery on the note. Such seems to be the doctrine in In- diana. Smiley v. Meir, 47 Ind. 559. In a case in Iowa, also, where the note sued on contained a stipidation "to pay. in addition to the amount thereof, fifteen dollars attor- neys' fees if the note is collected by suit," it was held not to be the intention of the par- ties that the fee should become due only after the note was collected by suit, but to be their intention that the fee should be recoverable with the amoimt of the note. Shugart v. Pat tee, 37 Iowa, 422. In this state it has been held that the fee is not due when the suit is brought on the note, and therefore cannot be included in the assessment of dam- ages. Nickerson v. Babcock, 29 111. 497; Easter v. Boyd, 79 111. 325. In the two cases, however, in which this coui't so held, there was no express agreement in the note that the fee might be recovered in a separate suit. Nickerson v. Babcock. supra; Easter v. Boyd, supra. In the case at bar, the promise is "to pay ten per cent, on the amount due hereon in addition as an attorney's fee, and to be recovered as a part of this note or by separate suit." Whether or not a stipulation to pay the fee to be recovered as a part of the note, in case suit is brought on it for its nonpayment when due, is so far a mere inci- dent to the main debt that a separate suit cannot be brought for the fee after the ter- mination of the suit on the note, is a ques- tion which is not presented by this record. We see no reason why the maker of the note giay not stipulate that a separate suit may be Vrought for the fee, and why such stipulation cannot be enforced by the payee or the hold- er. If the written promise to pay the fee passes to the holder by the indorsement, the written agreement as to the mode of recovery -also passes. The fact that the engagement to pay a fee is incidental and ancillary to the main engagement to pay the debt does not prevent the maker of the note from agree- ing to submit to a separate suit for the recov- ery of the fee. We are therefore of the opin- ion that the present suit is properly brought. It is fnrFhel- claimed that the agreement to pay 10 per cent, as a fee is usurious. The authorities above referred to hold to the con- trary. Stoneman v. Pyle, supra; Sewing Mach. Co. V. Moreno, supra. See, also, 2 Pars. Notes & B. pp. 413, 414; Clawson v. Munson, 55 111. 394; Barton v. Bank. 122 111. 3.-)2, 13 N, E. 503. There is here no viola- tion of the usury law, because the agreement "provides for new or additional compensa- tion or interest for the use of the money because of the failure to pay at maturi- ty. It is not in the natm-e of a contract for additional interest, but a provision mere- ly against loss or damage to" the payee (or holder) specifically pointed out." Barton V. Bank, supra. There is nothing to show NOTE— DEFINITION-ATTORNEY'S FEES. 23 that 10 per cent, on the amount due is an un- reasonable fee. The defendant stood by bis demurrer to the declaration, which described the notes, and the provision therein for a fee of 10 per cent. The declaration must there- fore be regarded as alleging, in substance, that a reasonable attorney's fee was 10 per cent, on the amount due on the notes. Smiley V. Meir, supra. The judgment of the appel- late com-t is affirmed. Judgment affirmed. (38 111. App. 305.) In error to and appeal from the circuit court, Macoupin county; J. J. Phillips, Judge, A. N. Yancey, for plaintiff in error and ap- pellant. Palmer & shutt, for defendant in error and appellee. WALL, J. This was a suit by appellant against the appellee to recover the sum of $1,619.23 for the attorney's fees specified in the notes sued upon in the preceding case between the same parties. The instruments so sued upon were in the following form, the only difference being as to amount and time of payment: "$543.47. Bunker Hill, 111., December 31, 1895. On or before eight- een months after date, for value received, we, or either of us, promise to pay to the or- der of George W. Belt five hundred and for- ty-three and forty-seven one-hundredths dol- lars, payable at the banking house of Belt Bros. & Co., in Bunker Hill, Illinois, with eight per cent, interest per annum after ma- turity; and if not paid when due, and suit is brought thereon, then we promise to pay ten per cent, on the amount due hereon in addition, as an attorney's fee, and to be re- covered as a part of this note or by separate suit. The makers and indorsers of this note hereby severally waive presentment for pay- ment, protest, and notice of protest and non- payment, and no extension of time of pay- ment, by payment of interest in advance or otherwise, shall release either of us from the obligation of payment. William M. Dorsey." The declaration in the present suit averred that these notes were not paid at maturity, that suit was brought thereon, and that the sum therein demanded for said fees had not been recovered in said suit. A demurrer was sustained to the declaration, and judgment was rendered against the plaintiff for costs. The plaiutift" brings the suit here by appeal. It is urged in support of the judgment that the stipulation for the payment of attorney's fees rendered the instrument nonnegotiable; that it was not a promissory note, because by said stipulation it was deprived of the element of certainty as to the sum to be paid, which, it is conceded, is one of the es- sential features of a promissory note. What, then, is the effect in this respect of such a provision in an instrument which in all oth- er particulars is a promissory note? In Xickerson v. Sheldon, 33 111. 372, the instru- ment contained the following: "And we fur- ther agree, if the above note is not paid without suit, to pay ton dollars in addition to the above for attorney's fees,"— the stip- ulation differing from this only in not pro- viding that the fee might be "recovered as a part of this note or by separate suit." It was objected that this clause rendered the instrument nonnegotiable, but the court held otherwi.se, and sustained the judgment in favor of the indorsee for the amount of the principal and interest. The plaintiff in that case did not declare for the fee, and did not seek to recover it in the suit on the note, and, as it was not provided that it might be recovered as a part of the note, it is prob- able he could not successfully have claimed it in said proceeding. In Daniel, Neg. Inst. (2d Ed.) § G2, it is said that such provisions do not imi)air negotiability, and that the lia- bility so imposed, as for every engagement imported by the note or bill, enters into the acceptor's and indorser's contract. The au- thor admits, however, that the early cases are not all in accord with this view, and many of them hold to the contrary. The later cases are quite harmonious, and the trend of modern decisions is to the effect that where the condition superadded is to waive an exemption or to confer a remedy in respect to collection, thereby rendering the paper more valuable, there is no loss of negotiability. We extmct the following from the opinion in Stoneman v. Pyle. 35 Ind. 1(»3, found in the note to Dafiiel's text commenting upon such a clause: "It may be conceded that a note, in order to be placed upon the footing of bills of exchange, must be for a sum certain; for in no other way can the maker know precisely what he is bound to pay, or the holder what he is en- titled to demand. But the note in question, if paid at maturity or after maturity before suit brought thereon. Is for a sum certain. On the maturity of the note, the maker knew precisely what he was bound to pay, and the holder knew what he was entitled to de- mand. In the commercial world, commer- cial paper is expected to be paid promptly at maturity. The stipulation for attorney's fees could have no force, excei)t upon a vio- lation of his contract by the defendant. Had the defendant kept his contract and paid his note at maturity or afterwards, be- fore suit, he would have been required to pay no attorney's fee, nor would there have been any difficulty as to the extent of his obligation. We see no reason, on prim.-iple or authority, or on grounds of public pol- icy, for holding that such a stipulation de- stroys the commercial character of paper otherwise having such character. The case is quite analogous to a cla.ss of cases on the subject of usury. Says Mr. Parsons: 'So if the bor rower agr ees to pay the sum bor- rowe^^at ^a tim£_ certain, or on demand, with lawful interest, and, if he fails to do 24 NOTE— DEFINITION— ATTORNEY'S FEES. so. 80 much more by way of penalty, even if it be called "extra interest," this is noiTsuch usury as would affect the contract, because, the borrower has the rijrht to pay the prin- eipafand avoid the penalty.' '2 I'ars. Notes & B. 413-414. So here the defendant had The rijrht to pay the face of the note when due. and avoid the attorney's fees. As long as the note retained the peculiar character- istics of commercial paper, viz. up to the time of maturity and dishonor, the amount to be paid on the one hand and to be re- ceived on the other was fixed and definite." To the same effect are Sperry v. Horr, 32 Iowa, 184; Gaar v. Louisville Banking Co., 11 Bush (Ky.) 180; Seaton v. Scovill, 18 Kan. 433; Adams v. Addington, 16 Fed. 89; Wilson Sewing Mach. Co. v. Moreno, G Sawy. 3o, 7 Fed. SOti; Bank of British North America v. Ellis. 6 Sawy. 9G, Fed. Cas. No. 859; Howenstein v. Barnes, 5 Dill. 482, Fed. Cas. No. G,78G; Dietrich v. Bayhi, 23 La. Ann. 7(;7; 1 Rand. Com. Paper, § 20.j, and notes. In Seaton v. Scovill, supra. Brewer, J., quotes with approval from the Kentucky case the following, viz.: "The rea.son for the rule that the amount to be paid must be fixed and certain is that the paper is to be- come a substitute for money, and this it cannot be unless it can be ascertained from it exactly how much money it represents. As long, therefore, as it remains a substitute for money, the amount which it entitles the holder to demand must be fixed and cer- tain; but when it is past due it ceases to have that peculiar quality denominated 'ne- gotiability,' or to perform the office of mon- ey, and hence anything which renders its amount uncertain only after it has ceased to be a substitute for money, but which in no wise affected it until after it had per- forme3. 8 South. 498: Bowie v. Hall, G9 Md. 433, 16 Atl. 64: Sperry v. Horr. 32 Iowa, 18-1. Contra. First Nat. Bank v. Babcock, 94 Cal. 90. 29 Pac. 4\T^■, Altman v. Rittershofer, 68 Mich. 287, 36 N. W. 74. See. for further discussion sustaining this rule, Benn v. Kutz- scban, 24 Or. 28. 32 Pac. 70^3: Farmers' Nat. Bank v. Sttton Manuf'g Co.. 3 C. C. A. 1, 52 Fed. 191; Wood's Byles, Bills & N. 167. note (l)ottom page). See Benn v. Kutzschan and Farmers' Nat. Bank v. Sutton Manuf'g Go. for a collection of the cases pro and con. Also Tied. Com. Paper, § 28b, note; Stoneman v. Pvle. 35 Ind. 103: Sperry v. Horr. 32 Iowa, 1.S4- Iron City Nat. Bank t. McCord, 1.39 Pa. St. .")2. 21 Atl. 143: Leggett v. Jones, 10 Wis. 35: Second Nat. Bank v. Wheeler, 75 Mich. 54G, 42 N. W. 9G3. NOTE-INDUKSEK— UUARAXTUlt— PKE!5UMPT10N OF LAW 25 MILLIG AN V. HOLBROOK. (48 N. E. 157. 168 111. 343.) Supreme Court of Illinois. Nov. 1, 1897. Appeal from api)ellate court, First district. Assumpsit by Charles F. Millijian against Zephaniali S. Holbrook. From a judgment of the appellate court (68 111. App. 631) affirming judgment for defendant, complainant appeals. Aftirnied. G. W. & J. T. Kretzinger, for appellant. Ashcraf t, Gordon & Cox, for appellee. BOGGS, J. Appellant brought asKiuupsit against the appellee in the circuit court of Cook county to enforce an alleged liability as guarantoi; of a note given by one Day to the appellant, the payee, and indorsed in blank by appellee. The defense was that, by virtue •of a special agreement entered into between appellant and appellee at the time the note was indorsed, the liability of the appellee was that of an indorser. The cause was submitted in the circuit court to the court, without a jury. The judgment was adverse to the appel- lant. He brought the case by appeal to the appellate court of the First district, and, the judgment of the circuit court being attirmed, he has prosecuted a further appeal to this ■court. * The only question arising upon the record in this court is whether the circuit court errod in holding that the fourth proposition correctly stated a principle of law applical)le to the con- tention. The proposition is as follows: "Held AS law in this case that if the coiu-t should be- lieve from the evidence that at the time th e name of Holbrook was placr-^ •; ''-^ back of the note in evidence, that pi: 1 in sub- stance t o Holbro ok. 'Vmi in - ■ se notes, do you not?' that HoHm i k i.pl .1. I indorse fhese notes becau-se"! coua;»l. r Mi. Day goolish an agreem ent limit- ing the liability of the appellee to that of in;: dorser, and that the preponderance oTTTie^ evi- dence supported the judgment is conclusi>e)y settled by the decision of the appellate court. The judgment of the appellate court is allirni- ed. Atlirnu'd. .f-HrL 26 NOTE— DONOll TO DONEfcl— DELIVEUY. SCHOOL DIST. OF CITY OF KANSAS CITY v. STOCKESG et al. (40 S. W. 656.) Sapreme Court of Missouri. May 4, 1S97. In h.nnc. Appeal from circuit court, Jackson county. Action by the school di5>trict of the city of Kansas City against William L. Stocking and another, executors of George Sheidley, deceas- ed, on three notes. Judgment for plaintiff, and defendants appeal. Affirmed. W. L. Stocking and C. O. Tichenor, for ap- pellants. Gage, Ladd & Small, for respond- tixxi. MACFARLANE, J. Plaintiff, a public- school cori)oration. sues the defendant.'*, as executors of George Sheidley. deceased, upon three promissory notes, dated March 9, 1S'.>4, each for $5,000, payable, respectively, 6, 12, and IS months after date, one of which is as follows: "S5.000.00. Kansas City. Mo.. March 9, 1894. Six months after date. I promise to pay school district of Kan.sas City. Missouri, or order, at the Union National Bnnk. Kansas City, five thousand dollars, for value received, with interest at the rate of no per cent. per annum. George Sheidley." By answer, de- fendants admit the execution of the notes, but set up as defen.ses— First, that at the time of their execution the testator was of unsound (uind. and incapable of making them; second, that they were wholly without consideration; and, third, that they were never delivered. The case was tried to a jury, and a verdict was found for the plaintiff on all three counts. Judgment was rendered in accordance there- with, and defendants appeal. On the question of want of capacity of de- ceased to make the notes, defendants assign no error, but agree that that issue was fairly tried. Tlie evidence shows that the building occupied bj' the Siihool district for a library was regarded as wholly insufficient, ?nd for several years prior to the execution of these notes the erection of a new building had been under consideration by the board of educa- tion. For the pun)ose of purchasing a site and erecting the building, an issue and sale of bonds of the district had been contempl.-i'ted. Previous to this tran.«action, George Sheidley had expressed an intention of making a do- nation of .*25,000 to the district, to be used in the purciiase of books. About this time ttie board came to the conclusion that the i)roceeds of "bonds could not be lawfully applied to the purchase of a site for the building, and. tiiere being no other funds with which to m'ak'e such purchase, it concluded that the enterprise would have to be abandoned. Sheidley, being inform- ed of the difficulty, and probable failure of the enterjirise for want of means to purchase a site. advisi-d the board of lus willingness tojilLoslJt to use the intended donation in any manner it saw fit. A meeting between him and a com- mittee of the board was held, and his propos- ed donation for that purpose was accepted, giieidley at the time did not have the ready nutuey.'but proposed giving his notes to the district, payable in the future, but promising that they would Ije paid whenever the money was needed. It was thereupon agreed that he should make five notes, of $5.500 each, pay- able to the district; and, as he was expecting^ to leave Kansas City the next morning, he agreed to place them in the hands of Thomas B. Tomb, for the board, to be handed to it when called for. The next morning, JLarch 9. 1S94, lie executed the notes and delivered them to Tomb, as agreed, and informed the president of the board that he had done so. A nl'eeting of the board was immediately called, and the president made the following report of what had been done: "Since recess was taken last Thur-^day evening, we had, in com- pany with J. C. James and J. V. C. Karnes, called on Mr. George Sheidley. who had here- tofore offered to give ?25.4, payable twenty years from their date, with interest at the rate of four per cent, per annum, payable semiannually on the second days of July and January in each year; both principal and interest payable, in gold coin of the United States of America, in the city and state of New York. Resolved, that the presi- dent and secretary of the board be, and they are hereby, authorized and directed to sign and publish, according to law, notice of the submi.s.sion of such jiroposition, and to take all NOTE— DONOR TO DONEE— DELIVERY. 27 other necessary steps for the proper submis- sion thereof, in accordance with the terms of this resolution." In pursuance of this resolu- tion an election was held which resulted in an almost unanimous vote in favor of borrowin.;? $200,000 for the purpose of erecting a public hbrary building. Bonds were thereafter is- sued and sold, and the proceeds were placed in the hands of the treasurer. This was all con- cluded July 14, 18W. Mr. Sheidley was taken §.ick about the 1st of July, IS'.W, and was there- after, until his death, incapa])le of attending to business. On the 14th of July, ISIM, the president of the board demanded the notes of Tomb, who declined to deliver them, on ac- count of objections by members of Sheidley's family. The board afterwards, in February, 1895, purchased a site for $30,000, $5,000 of which was paid in cash, out of tlie general rev- enues of the district, and assumed mortgages on the land, extending over a number of years, for the balance of the purchase price. The board thereupon proceeded In the erection of the building. At the request of the plaintiff the coiu-t gave the jury the following instructions: "(1) You are instructed that, in order to constitute a consideration for the notes in suit, it is not necessary that George Sheidley should have himself received, or have expected to receive, any benefit on account thereof. But, if you believe from the evidence that the plaintiff, through its board of education, relying upon the fact that the five notes had been executed and left with Mr. Tomb, incurred and paid expense in connection with the submission to a vote of the people of the question as to the issue of the bonds of the district, and other expenses in connection with the issue of the bonds, and did incur a liability of $200,000 by the issue and sale of tlie bonds, and that said action of the plaintiff, througli its board of ed- ucation, was induced by the promise of the defendant to execute said notes, and by his subsequent execution thereof, and that the pur- pose of defendant in making said promise and executing said notes was to enable and induce the plaintiff to take such action, this consti- tutes a good consideration for tlie notes. (2) The jury are instructed that, to constitute a delivery of the notes in suit, it was not nec- essary that tlioy should be placed by the de- fendant himself in the liands of any member of the board of education. But if you believe from the evidence that in pursuance of an ar- rangement and a promise to that effect made by George Sheidley to Messrs. Yeager, Karnes, and James on the evening of March 8, ISIH, he did on the next day execute the notes, and leave them with Mr. Tomb, for the board of education, with instructions to him to hand them to the board when any of its members should call for them, intindinj: there' y 1o p'ace them at the disposal of tlie board of education, this constitutes, m law, a complete delivery of the notes to the plaintiff." Defendants re- quested, and the court refused to give, the fol- lowing instructions: "(1) The jury are instruct- ed that a promissory note Is but the promise to pay money In the future, and, if made and " delivered purely a s a £ift, is without consid- eration, anTPcarmot be enforced against the maker. Such a note is but a promise to make a gift in the future. (2) The only act claimed to have been done by plaint iit upon the strength of tlie verbal promise of George Sheid- ley to give $2."»,0) The jurj-are instructed that although It may be the fact that plaintilj would not have submitted the proposition to vote for bonds to build a librarj- building, ex- cept for a promise tn the lart of George Sheid- ley to give ."<2r>.(KH), jM?t ydu are instnu-ted that such submission constitutes no consi leratiojj I jir tlie n otes referred to in the petition. (4; The jury are iustructi-d that, at the time (Teorge Sheidley signeil the notes sued on, tluTe was no subsist.ug liab.lity on the part of said Sheidley to the plaintiff, and hence there was no consideration for said notes, and your verdict must be for defendant. (5) The jury are instructed that the notes sued on are in the possession of one Toinb, and always have been, and that, therefore, i^laiutiff is n tthe holder'thereof, and lience your verdict must !>■ for defendant. (6) Under the pleadings ami the evidence, your verdict must be for the de- fendant." 1. Tlie substantial and most important con troversy in this case is wlicther, under the evidence, any consideration for the notes sueil upon was shown. It is conceded^ by plain- tiff's counsel that Sheidley received'no benefit for his promises which can be regarded as a sufficient consideration to support them. That tlie notes were intended by the maker, and accepted by the payee, as voluntaiy donations, is uiKiuestioned. "It is essential to a gift that it go into effect at once, and completely. If It regards the future, it is but a promi.se. and. being a promise without consideration, it can not be enforced, and has no legal validity." Spencer v. Vance, 57 Mo. 429; Tomlinson v. Ellison. 104 Mo. lO.l, IG S. W. 201. That the note of a donor to a donee is not the subject of a gift is well-settled law. Such a note is but the promise of the donor to pay money in the future. The gift is not completed until the money is paid. There is no dehvery of the gift, but a mere promise to deliver in the fu- ture. Such a note, treated purely as a gratui- tous promise, cannot be enforced eitlier in law or equity. The question, then, is, can these notes be enforced, as valid contracts, not withstanding Sheidley received no benertl therefrom, and intended them as purely grat uitous donations? If so, there must liave been a legal consideration moving from the district to him. To constitut e such consideration, U is_not^^e^ti£^_,tllatS.lieiaUaLsiio»^^^l l"i^e I'e ri ved so me bene|JLIrQUi_tJie_jir'Jii)ise. The cohsMeration will be sufficient_to support the promTse [f the district expt>ndod money OfliUa:. curred eiiforceable Uabilities_ in reliance there- on. If the expense was incurred and the lia- 26 NOTE-DONOU TO DONKK PELIVEUY. bility created in furtherance of the enterprise the donor iutemled to promote, and in reliance upon tlie promises, they will be taken to have been incurred and created at his instance and request, and his executors will be estopped to plead want of consideration. The gratuitous promises will thus be converted into valid and enforceable contracts. Brooks v. Owen, llli Mo. 251. r.> S. W. 723. and 20 S. W. 41)2; Kocli V. I-iy. 38 Mo. 147; Steele v. Steele. 75 Md. 477, 23 Atl. JC>9; University of Des Moines v. Livingston. 57 Iowa. 307, 10 N. W. 7."\S; Simp- son College V. Tuttle. 71 Iowa. 50G. 33 N. W. 74; Trustees v. Garvey. 53 111. 401; Amherst Academy v. Cowls, d Pick. 427; Pitt v. Gentle. 49 Mo. 74; Kichelieu Hotel Co. v. International Military Encampment Co., 140 111, 248, 29 N. K. 1044. Mr. Parsons says; "On the im- portant question, how far voluntary subscrip- tions, for cliari table purjioses. as for alms, education, religion, or otlier public uses, are binding, the law has, in this country, passed through some fluctuation, and cannot now be regarded as, on all points, settled. Where ad- vances have ])een made or expenses or liabili- ties incurred by others, in consequence of such subscriptions, before any notice of withdrawal, this should, on general principles, be deemed sufficient to make themobhgatoiT. provided the advances were authorized by a fair and rea- sonable dependence on the subscriptions; and tliis rule seems to be well established. And the expenses or lial)ilities need not have been incurred by the plaintiff, if othei-s of the sub- scribers incurreil them on the faith of the de- fendant's subscription." 1 Pars. Cont. (8th Kd.) side page 4.'>3. In Koch v. Lay. supra, Wagner, J., says: "Where notes are given by one or more persons to any coiiioration or other legal person, or any trustees, by way oi A oluntary subscription to raise a fund to pro- mote an object, these notes are open to the defense of want of consideration unless the payee has expended money or enteretl into en- gagements which by legal necessity must cause loss or injury to the payee if the notes are not paid. There ai*e many cases which hold that gratuitous promises may be en- forced where tliey liave operated to induce en- gagements and liabilities witliin the knowi- <.'dge of the promisor. Incurring expense and assuming liabilities in consequence of the l)romise is regardetl as sufficient consideration for the promise." It appears from the evi- 4lence, beyond any reasonable controversy, we think, that while ^he board of directors re- garded the erection of a building for a public library, in connection with the schools of the district, to be of great public need, yet it had wholly abandoned the enterprise, for the rea- son alone tliat it had not on hand, and could not procure, the means necessary for pur- chasing the land on which to build it At this juncture Mr. Slieidley made his offer to donate ?25.0(M) to the district, to be used by the board of directors in such way as it might deem best to secure the erection of said build- ing. This offer was accepted, and tlie notes in suit were executed, and placed in the hands of Tomb, as hereinbefore stated. Sheidley knew perfectly well the difficulty under which the l)oard was placed, and his intention un- questionably was that the money, when paid, should be applied to the purchase of a site for the building, and tliat the enterprise should go on at once. The board of directors, rely- ing upon these promises, immediately submit- ted to a vote of the district a proposition to borrow $200,000 and issue the obligations of the district for its payment. The election was held at an expen.se to the district of about $550. The bonds were thereafter issued and sold, and valid obligations of the district were thereby created for $200,000. Under the well- settled principles of law above stated, the notes are supported by a sufficient considera- tion. In reliance on tlie promises, and in furtlinrance of tlie public enterprise they were intended to promote, the district, in good faith, expended a considerable sum in holding an election, and incurred, presumably, a valid in- debtedness for a large amount. The expendi- ture incurred and the indebtedness created were necessary in order to secure money for the erection of the building. This necessity was well known to Sheidley when he execut- ed the notes. 2. It appears from the evidence that Sheid- ley was adjudged insane in October, 1894, and that the site for the building was not bought until February, 1895. From these facts it is argued that the promises were re- voked before the site was purchased, and there was therefore no consideration for the Rotes. It cannot be said that the purchase of a site and the erection of the building were in- dependent enterprises. They constituted but one undertaking, namely, that of securing a library building. The notes became valid and irrevocable contracts as soon as the district, relying upon their payment, expended money or incurred liability in promoting the general enterprise. This occurred before Sheidley was adjudged insane, and his insanity or death thereafter could not revoke them. 3. The purchase of the site before the notes were collected could not effect a revocation of agreements which had become vaUd and bind- ing obligations before that time, though the application of the proceeds had been express- ly limited to the purclif.se of the site, for the reason tliat the purchase price has nat yet been paid. The proceeds are still to be ap- plied to such purchase. But it does not appear that any such condition was imposed. The board of directors were given the discrefion to use the proceeds in such way as it might deem best in order to secure the erection of the building. There would be no misapplica- tion of the funds, under the conditions of the gift, though applied to the construction of the building. 4. It is also insisted that there was no con- sideration for the promises, for the reason that the erection of the building was legally in- cumbent on the board, and the voluntary per- NOTE-DONOR TO DONEE- I>KL1\ EUY. 21> formance of an act which was legally incum- bent on the party to perform is not, in law, a sufficient consideration. This contention has a sufficient answer in the fact that no imjiera- tive iPiral duty rested upon tlio bDard to pro- vide a library IniildinR. Tlie boar d of direct- ors is given the power to establish and main- tain libraries, but it is not made 'Tfs"duty to (io so. The discretion is to be exercised by tiie board in view of all the circumstances and conditions. Rev. St. 188!), §§ SlfiO. 8112. But Jjoards of education are given express jimwim- tji^accept gifts for^Uie erecti on of library Imill ings. Acts 1801, p. 205. Th ugh they may determine to provide a library, tlie character and cost may be determined by tlie voluntai-y aid they may receive or be promisod. Woik done or expenses incurred in reliance upon promises to give in the future would as well furnish a consideration for such promises as it would if the entire enterprise depended upon the promises. We think the consideration for the notes sufficient, and find no error in giv- ing and refusing instructions on this branch of the case. 5. We think there was a sufficient delivery of the notes. II was not essential that the actual manual possession should have i)asse,l fo"some member of the board in order to ef- fect a delivery. A constructive delivery was sufficient AH that was necessary was tliat tjbe control of the notes should have passed from Sheidley with his consent, and tluit tliey should have been placed by his direction under tBe power and control of the board of educa- tion. Daniel, Neg. Inst. § G3a; Ricliardson v, Lincoln, 5 Mete. (Mass.) 201; Welch v. Dam- eron, 47 Mo. App. 227. The evidence shows that the notes were placed by Sheidley in the hands of Tomb, with directions to hand them to the board when called for. This was done pursuant to a previous agreement had with the board. Tomb testified that, when the notes were handed to him, Mr. Sheidley said that "whenever the board of education called for them I should give tliem to them." The Insti-uction on the ,(XX) in furtherance of the enterprise, then such prom- ise is void, as being contrary to public policy. It is undoubtedly the policy of the law that all public officers should be uninfluenced and un- biased in the discharge of their official duties, and, as said by Mr. Bishop: "Any contract be- tween an officer and a private person by which the former undertakes to do anything of offi- cial duty, right or wrong, in accord with such duty or contrary to it, is, in a greater or less degree, an obsti-uction to the unbiased exer- cise of his office, eveii where it does not in- fluence him corruptly, and is therefore void." Bish. Cont. § 500. But we are unable to see that the sound policy of the state was violated in this action of the board, all the circum- stances being considered. The action of the board was not Induced by the i)r(>iiiises of Slieidley, in the sense that its judguifut and discretion were influenced thereby. IToe ifaid had b efore that exercised its judgment, and de- tennTnea~lhe desirability _o_f_ft new public ii- \jifary Uuildlng. The obs tacle i n the way of voluntary action waSfTTie need of money to purcliase a site. Its conclusinn, and the only obstacle in the way > Hr it out, were well known. Tlie i n : Sheidley iOily empowered the board to ai t ujmn its judgment already formed and pulilicl}- declare<1. It guid e the wai' clear for the Uoaxtl to perform what it considered a public duty. We can see nothing in tlie action of the board of educa- tion calculated to control or influence its duty to the public, or which is the least immoral in its tendency. The jKilicy of the state, by ex- press law, favors and t-ncourages donations for the erection of public library buildings, and we can see nothing inconsistent with the free, honest, and impartial exercise of official dis- cretion for a board of education to regulate its^ action, to some extent, with reference to the amount, value, and character of volmitary con- tributions, wliether made or promised. The fact tliat the statute gives power to boards of education to establish and maintain libraries for the use of the public school districts there- of is a recognition by the state of their utility and desirability, and the only question boards really have to deal with is the ability of the district to establish and maintain them. Boards must necessarily be influenced more or less in their actions by the private contribu- tions that may be secured or promised. Such ^ctkm, wlien not otlierwise influcncwl, cannot be regarded as contrary to public policy? 7. It is insisted by plaintifif tliat. the ille- gality of the contract not having been jileaded as a defense, the question should not be con- sidered on this aiipeal. 'Hie rule is that if a plaintiff, in order to make out his cause of action, is required to s how that the contract sued upon is, for any reason, illegal^ the court should not enforce it, wliether pleaded "as a de^^nse~6^ not. But when._yje illegality does not appear from the contract itself, or from the evidence necessary to prove it. but depends upon extraneous facts, the defeu:j£ is new mat- ter, and must have been pleaded in order to be available. Musser v. Adler, 8G Mo. 440; A-ssoclafion" v. Delano, 108 Mo. 217, 18 S. W. 1101. In this case, defendants pleaded want of consideration, and the notes are concedwlly mere gratuitous promises to pay in the futun-. The notes were tlierefore void as gifts. In or- der to prove that they were valid contracts, supported by a suflicient consideration, it be- came necessary for plaintiff to prove the en- tire transaction between Sheidley and tlie board of education, and the subsiniuent action of the board taken in reliance on the jirom- ises. If the notes had been illegal, as against public policy, the fact was necessarily dis- closeil by plaintiff in making out its case, and it would have been the duly of the court to 30 NOTE -DONOR TO DONEE-DELIVERY. deny its assistance, whatever the condition of the pleading. The question was therefi re suf- ficiently raised by the instruction in the nature of a demurrer to the evidence to requu-e its consideration on appeal. 8. Evidence was admitted on the trial, over the objection of defendants, that Mr. Sheidley was a man of large means. This evidence vas clearly inadmissible on the issue raised upon the defense, that the notes were without con- sideration. But the defense was also made tiiat, at the time the notes were executed, de- fendants' testator was of unsound mind, and Incapable of transacting business. The notes amounted to $25,000,— a very large stun to give away,— and, for a man of moderate circum- sTauoes, would have furnished a circumstance tending to prove want of capacity. To rebut that tendency, evidence that he was a man of wealth was admissible. K defendants wished to limit the effect of the evidence, they should i&ave asked an instruction for that purpose. Garosche v. St. Vincent's College, 76 Mo. 3S2; Stanard Milling Co. v. White Line Cent. Ti-an- sit Co., 122 Mo. 273, 26 S. W. 704. The judg- msat is affirmed. BARCLAY, C. J., and GANTT, SHER- WOOD, BURGESS, and BRACE, JJ., Concur. ROBINSON, J., dissents. MOJiTGAOE NOTE— ASSIGNEE— EQUITIES. 31 BUEHLER V. McCORMICK. (48 N. E. 287, 169 111. 269.) Supreme Court of Illinois. Nov. 8, 1897, Appeal from appellate court, First district. Bill by John AV. Buehler against Tilton H. McCormick to foreclose as a mortgage a deed of trust. From a judgment of the appellate court (67 111. App. 73) reversing a decree in favor of complainant, complainant appeals. Affirmed. Goldzier & Rodgers, for appellant. New- man, Northrup & Levinson (Elmer E. .Tackson, of counsel), for appellee. CARTER, J. The circuit couit of Cook county entered a decree in favor of the com- plainant to the bill, John W. Buehler, foreclos- ing as a mortgage a deed of trust given by the defendant, Tilton M. McCormick, upon real estate. The appellate court for the Firet dis- trict has reversed that decree, and dismissed the bill. The case is here on Buehler's appeal. The facts are these: McCormick, being in- debted to William Haerther for the purchase of the real estate, on March 27, 1893, executed his note for $820. payable^ to his own order, one year after its date, indorsed it in blank, and delivered it to Haerther. To secure its payment, he also executed his deed of trust upon the property to one Austin as trustee, and delivered the same also to Haerther. Before the note was due, and only about a month after given, McCormick paid Haerther $;W0, and Haerther credited it on the back of the note. About three weeks later he made an- other payment of $100 on the note, for wliich Haerther gave him a receipt; and a few days later, by agreement with Haerther, he deliv- ered to him (Haerther) a certificate of deposit of the Milwaukee Avenue State Bank for $515 in full payment of the balance of tne note, principal and Interest. McCormick did not, when he made the last payiru^ir fake up the note or jeed of trust, nor did he ask for a re- turn of the same to him, but relied ujjon the trustee, Austin, who had a desk in the office of Haerther, to release the deed of trust, and to return the same and the note to him; l)ut Austin neglected the matter, and moved out of Haerther's office, whereupon McCormick sorght Haerther, and endeavored to obtain his note and deed of trust. Whether Haerther avoided him or not, he was unable to get any satisfactory response until in the latter part of September, when he obtained from Haerther a receipt in full for the amount of the note and interest. About two months al'l-^r the note was executed, and some days after it had been fully paid in the manner before stated, jjfipr- ther, being indebted to the Garden City Banlc- "mg & Trust Company, of which appellant, Buehler, was the casliier, gave the bank his note therefor, and delivered, among others, the note in question to_the bank as collateral se- cui-itv. Some two months later, about July 20,"l895, the bank sold the note in conlrovorsy under the pledge, and appellant, Buehler^ boi'ght it at the public .«ale. Before TBe saTe^ notice was .'served upon the bank that the note had been paid in full, and demand was made for the surrender of the note and deed of trust. Appellant contends that It does not appear that llaorther held the nofe when it was paid, but, as it was indor sed and dcliv- ered to him by McCormick in payuiout for tlie property purchased of him, and he did not transfer it to the bank until after It was paid, and there being no evidence that any one cl.se held the note in the meantime. It nmst be presumed that he was the legal ho'.der of It. It is not contended that appellant acquired any rights, as against appellee, superior to those possessed by the bank before It sold and delivered tlie note to him (Huelilcr). But counsel for appellant, while recognizing the common-law rule, as appli«'d and followed by this court in Olds v. Cimimings, 31 111. 188, and many subsetiuent cases down to McAu- liffe V. Renter, 166 111. 491, 46 N. E. 1087. that the as.signee o f a__mQrtg;ige takea it.aubjecl;_ to all equities existing between the assignor and the mortgagor, insist that the rule can- not be applied in this ease; to use their lan- guage: "(1) Because, by the tenor of the instruments, the maker is estoi»ped from availing himself of such equities; (2) be- c-ause no assignment, equitable or otherwise, of the mortgage In question is involved; (3) because the negligence of appellee, which en- abled the perpetration of a fraud ui>on appel- lant, deprives him of the right to urge his equities as against appellant." And in this connection it is urged that, as the not e jyaa. made pa yable to the order o^ the maker, and Indorsed by him in blank, lirid delivered to Haerlh^i*, It tliereiiTTer passed by mere deliv- ery, the s{ime~as^"irif TTad been made i>ay- i Tile to bearer, and that the trust deed recites i that the maker "is justly indebteal promissory note i hereinafter described in the principal sum of I $820, being part of the purchase money for I the premises thereby conveyed," etc., and de- scribing the note; and the point is made that In such a case the equities of the maker against an innocent holder cannot prevail, even although the instrument is not assign- able, either at common law or by statute. It is, of course, apparent that M cCormic k 1 -yvould ba^e had a complete defense to any suit which Iljierther might have brought, ei- ther upon the note or to foreclose the mort- gage. It is also apparent that. ^s_jthe note passed from Haerther to the bank before its maturity, and without notice that It had been paid, the bank could recover from the maker the amount ai)i)earing to be unpaid and due upon it in an action on the note. It is clear, also, that, unless the mortgagor has estopped himself, or the case falls within some of the exceptions which have been cre- ated to the general rule that the assignee of a mortgage takes it subjei^'t to all of the equities existing between the mortgagor and 32 MORTGAGE NOTE- ASSIGNEE-EQUITIES. mortgagee, the defense that McCormick paid the debt in full to the legal holder of the note, even before its maturity, must be held a valid one. The point made by appellant that Haerther was not mentioned either in the note or mortgage we regard as immate- rial under the facts. See Shippen v. Whit- tier. 117 111. 282, 7 N. E. »U2; McAuliffe v. Ileuter. supra. When McCormick indorsed the note in blank, which he had made pay- able to himself, and delivt-rcd it. with the deed of trust, to Haerther. Haerther became the legal holder, and both instruments were, of course, while in his hands, subject to the defense of payment: but, as the note passed by delivery as if payable to bearer, the bank took it heioTB its maturity, free from the de- fense of payment. He was, in fact, an as- signee of the note, and by virtue of that fact an assignee of Jhe mortgage also, though. as~To the mortgage, only an equita- bl«?jissigne.e. 1 Rand. Com. Taper, pp. 'ZM, 243; 1 Daniel, Neg. Inst. 729. Because the mortgage secured the payment of the note to the legal holder, instead of the payee by name, cannot, uixiu any legal principle which we are aware of. make any difference. It was no more a contract with successive legal holders taking by mere delivery than it would have been in the other case with successive indorsees. - In both cases the note secured would be negotiable, and would pass free from all equities between the parties; but the legal and equitable character of the mortgage remained the same. and. when the mortgagor paid the deed to Haerther, who was the legal holder of the note, the effect was the same as it would have been if Haer- ther had been named as payee. We cannot hold that by the terms of the instrument all the attributes of negotiable paper were im- parted to this deed of trust. Xor does the ease fall within the principles announced in either of the cases cited.— Railroad Co. v. Thompson, 103 111. 1S7, or Miller v. Larned, Id. 5t;2. In the former case this court held that the rule applied in Olds v. Cummings did not apply, and, among other things, said: "In the case of an ordinary mortgage or deed of trust to secure a temporary loan from one individual to another, the note or evidence of the indebtedness taken at the time, al- though it may be negotiable, is not given for the express puri>ose of being put uix)n the market, and used as a permanent investment of capital, as in the case of railroad securi- ties; nor does the mortgagee in such ease, as a general rule, rely wholly on the security which the mortgage aflurOs, as is always doue in the case of railroad mortgage bonds." In the Miller-Larned Case it was held that it did not apply where the mortgage was given to secure the payment of accommoda- tion paper, for the reason that the very pur- pose for which such paper is given is that it may be assigned; and, as it is without con- sideration, it cannot be enforced at all be- tween the original parties, and the applioa tion of the rule in Olds v. Cummings would defeat the security, and render it nugatory in every such ease. It is plain that the case at bar does not fall within the principle of either of those cases. Nor does any ground appear upon which to- base the alleged estoppel against McCor- mick contended for by appellant. It is said that by McCormick's negligence in not taking up the note when he paid it he put it in the power of Haerther to perpetrate a fraud on an innocent party. But this is not a suit upon the note, but upon the deed of trust to foreclose it in equity. And it was held in Olds V. Cummings that it was the dut>' of the purchaser to inquire of the mortgagor if any reason exists why it should not be paid, and in Walker v. Dement. 42 111. 280. it said: "To be protected, the assignee must omit no duty, nor fail to exercise every precaution, which prudence demands of all men when acting in reference to matters of moment." He knows_ from the papers who the mortgagor is, and £ay, by notice and inquiry, ^protect himself in making the purchase much more readily than the mortgagor may, if, for any reason, fie is unable to obtain at once the cancellation and return of his obligations. The assignee is charged with knowledge of the law that a 'mortgage is assignable only in equity, and subject to the equities between the original parties to it, and he cannot relieve himself from the consequences of his own negligence by simply showing that the mortgagor failed to take up the note and mortgage when he paid the debt to the then legal holder. The case diffei*s in several material respects from Keohane v. Smith. 97 111. loG, which made no reference to Olds v. Cummings and subse- quent cases. In the Keohane Case, while the release was obtained from the mort- gagee, yet, when the debt secured was paid to him, he was not the holder of the note, but had assigned it to the true owner for whom he loaned the money, and when it was paid to him he had no authority to receive it. Thus it was said by Mr. .Justice Dickey in his separate opinion in Ogle v. Turpin, 102 111. l."o, that: "Where it is the duty of any one to see that comill"GT(?!al paper is paid, a payment to the payee not in possession of the paper will not affect the assignee. That was the case in Keohane v. Smith, and on that point that case turned." Neither was such payment in pursuance of any original con- tract entered into when the loan was made, as in McAuliffe v. Renter, supra. See, also. Towner v. McClelland. 110 111. 542. It is ap- parent that all that has been said in the dif- lerent cases cannot be fully reconciled, but it is clear, we think, that the case at bar falls within the general principle announced by tills court in Olds v. Cummings, and in a long line of cases .since that case was decid- ed. The judgment of the appellate court must be altirmed. Judgment affirmed. Cll ECKS— ACCEPT A XCE— IX DO U.SEME N T. aa COMMEUCIAL NAT. I5AXK OF CHICAGO I- Mi!»COLX FUEL CO, (67 111. Api). 166.) Appellate Court of Illinois. Nov. 30, 1896. Sleeper, McConlicr A: Rarbour, for appellant. Spencer Ward, for appellee. SHEPAKD, P. J. This is an appeal from a .judgment of the superior court, rendered there upon an appeal from a similar Jud^rment bo- tore a justice of the peace. One II. L. Cogjjer drew his check upon the appellant for .$6;'>.2r), payable "to the order of appellee, in settlement of an account, aiid de- livered the same to the firm of Allan F. (jor- don & Co., who, then and before, acted as ayentsoX appellee in the sale of coal, and as to certain customers, not includins Cooper, in making collections for coal sold by them. Having received the check in question, Gor- don & Co. indorsed the same by the name of "appellee, "Per Allan F. Gordon & Co., Agts.," and deposited it to the credit of their own ac- count in the Oakland National Bank, and the same wa.s duly paid by the drawt-e, the appel- lant, in the regular course of business through the clearing house. Gordon & Co. subsequently became insolvent, and, upon demand made upon (Jooper, by ap- pellee, for payment of the account for which the check had been delivered to Gordon & Co., Cooper produced the said cliec-k as an acquit- tance. Such indorsement being claimed by the ap- pellee to be unauthorized, this suit was brought to recover from the drawee bank as tliough the check had never been paid. It is urged that it was error to allow an affidavit denying the execution of the indorse- ment to be filed by the appellee after the evi- dence was closed. We regard the point as being more technical than meritorious. So far as the record dis- closes, no objection on that score, to the evi- dence that had boon adduced on the question of the indorsement being unauthorized, was made until the evidence on both sides was clos- ed, and was then, for the first time, urgc^l as an objection to a finding in favor of llie ap- pellee as plaintiff. So soon as the objection was made, the court gave leave to the appellant, as defendant, to tile the affidavit, which was, we think, in apt time. The further objection that the justice of tlie lieace had no right to enter judgment for the plaintiff for want of an affidavit denying the <'xecution of the indorsement, and that the BARR.B.& N.— 3 superior court could not remedy an omlssdoii of that kind before the jastice, is frivolous, and. if it were not, the jioint not being iu;ulf in the sujterior coui't could not be made here for the first time. It is next contended that there Is no evidence tliat at the time the check was jiresentcd to ap- ju'llant by the apix'llee for payment there were funds to the cretlit of the drawer sufficient to liay the check. It being made to appear that the bank paid the check upon its presentment, after the un- authorized indorsement by (Jordon & Co., and charged the amount to the account of the drawer, who Uieu had sufficient fimank. supra. Whether there was any express authority tt** Gordon & Co. to indorse and collect checks de- hvered to them, but made itayable to the ap- l»ellee, or whether from the course of dealing between apjicllee and Gordon & Co. such au- thority iniglit be implied, were questions whicli the superior court decided after full hearing; and consideration, and we do not feel justilied' in overturning the conclusion there reached,, but must affirm the judgment :i4 CERTIFYING BANK CiLECKS-RIGHTS AND LIABILITIES. METROPOLITAN NAT. BANK v. JONES ■ ; - et al. ~~ — ' (27 N. E. oS.*?. laililk-^iJ Supreme Court of Illinois. May lo, ^g91. Appeal from nppellnte court, first (lis- tri10, drawn by the defendants on the Traders' Bank of Chicago, payable to the order of the plaintiff. Tiie defemlants pleaded noD as- sumpsit, and on trial before the court, a jury beinfj waived, the issues were found for the defendants, and the court, after tle- nying the jilaintiffs ni(»tion for a new trial, gave judgment in favor of the de- fendants for costs." The facts appear by stipulation, and are, in substance, as follows: On the 1st day of October, Jvsx. after the coninience- ment of banking hours in the niorniny of that day, the defendants, being indebted to the i)laintiff' inTRe^um of $1..>4(J, gave to the j)laint iff their check on the Trad ers ' Bank omncagd. as foTlowsT TIcTvv. S. J ones. $1 .."40.00. Wal ter Metcalf. "Noble .Tones. "Chicago, C(»ok Co.. 11!.. Oct. 1, lKS8. " Pay to the order of Metrop. Nat'l Bank liffen hundred and forty dollars. "To Traders' Bank, "Chicago, 111. "No. lS,12s. ) NouLE Jones On the same day, and during banking liours", the plaintiff sent said cheek by one of its collectors fo the Trach-is" Bank, and asked said bank to certif^v it, which was «T«)ne by writing across the face of it as follows: "Certified. 10, 1, ISsH. Traders' Bank of Chicago. Chakt.es G. Fox. " The next njorning. during banking hours, but before clearing-house hours, the plaintiff sent said che<;k by its collector to the Traders' Bank, and presented it for and denianiled ji^nynnjut, which was^refused TIkh iMii'ii. on the same day. aiid during trniikiii- iiours, the plainti ff protested •said check for non-i)ayn]erit.~and sent n<> tice of dishonor to thiLxlcfcudaiiUlaced in the liands of a receiver, wiio has since ha ayinent had iji-en denuinded instead of certiffcatro'n.'said bank would have paid it. Upon these facts the coun- "flW lor llie jJiaintiH submitted to the court the following proposition, to be held as the law in the de<'i.sion of the case, which was refu.sed : "Tlie court holds, as a proposition of law. that when the holder of a check drawn upon a bank, situated in the same city as the holder, on the day of its issue takes said check to said bank and asks said bank to certify said check, which said bank certifies by marking 'Cer- tified' on the face thereof, and the day following, during bank hours, presents said check to said bank for payment, and the bank refuses payment thereof, having become insolvent and jjassed into the hands of a receiver before banking hours of saiil day, and the holder of said check at once, "and during banking hours of said day, gives notice of such dishonor to the drawer of said check, said certification does not release the drawer of said check, although at the time of the making and certification of said check the dravVer had sufficient funds to his credit in said bank to pay the same, and. if payment had been demanded by the holder instead of certifi- cation, such bank could not have refused to pay the same." The only question presented by this ap- peal is the one raised by the foregoing pro[)osition, viz., whether the plaintiff, by obtaining certification of said check, re- leased the drawers. A check being paya- ble immedi ately and on deina h J", the hold- er can only present it for paymentT and ~lhebank__can fulfill its^ duty to its deposit- or diTTy^by paying the amcjunt demanded. In other words, tiie holder has no right to demand from tlie bank anything but pay- ment of the check, and the bank has no right, as against the drawer, to do any- thing else but pay it. It fcdlows that th ere is n o such thing as "acceptance" of checks, in the ordinary sense of the term, for "af-y^^pf;^nC?" ordTn^iHlY jni plies that the dra^wei:^ requests the drawee to pay the amount a_t aJutur^day.and thedraw- er "accf'pts" to do so. tlu-reby becoming the [jrincipal debtor, and the drawer be coming his suret \ . Daniel, Neg. Inst. § 1601. ill then, the lioldcj ', on making pre- sentment of the check, instead of demand- ing and receiving payment, has the ch eck ce rtified and letains it in his possession. Tie enters int o a new: and express contract: with tlip bnnk ^ot within the scope of the le fi al r elntiorifiT*^ trip pnrTif>i~n-^<^w>n ,^ i.wi^- pendent of the question of its jiossession of the requisite amount of funds of the drawer; it being, by the act of certifica- tion, esto pped t o deny t he pos session of jufTicient lululs. AntffTier resuTt of tlie transaction is that tiiti bank thereby Us: comes _eiLtjtlestion is very elaborately and learnedly discussed in 1 Morse, Bank. (3d Ed.) § 414 et seq., and the same conclusi(jn reached, the fol- lowing beinir a portion of the reasoning there adopted : *' The drawer cau no lon^- er sue, though the bank should finally re^ ttrse to pay the check, for lie Iras original- ly'' OTdy a rigiit to demand that the check shall be duly paid on pi-escntnient, and his action lies for the damage resulting to him or to Ills credit from not havini; his debt duly discharged in th(> mnniier he has led Iiis cr(Hlitor to suiti)<)se would be sulli- cient. But if the holder waives his right to immediate payment, by expressly ask- ing for or even by accepting the offer of a certification by the l)ank, it follows that, sinc.» his act ac(iuits the dcbc due him from the drawer, the dr-awer can there- after have no cause or basis whatsoever on which to sue. The matter is volun- tarily taken out of his iiands by the other parties, who make their arrangements to suit their own convenience. Even, if the drawer has suggested or rc(i nested the ar- i^ngement, the assent of the payee and holder must be rega'ded as at his sole rji^k. He is not t)bliged to take the l)ank's promise in place of the drawer's inde!)ted- ness. The promise of the bank on the drawer's account, accepted as satisfac- tory by the creditor, discharges the debt- or, and at the same time (le|)rives him of all further concern or possil)le i-ight of ac- tion in the premises." See. also. Tied. Com. I'aper, § 4:)i>. Tin's question was be- fore the court of appeals of New York in Mank v. Leach, 52 N'. Y. :!.")(!, and it was there held that, where a holtl<>i' of a check jireseuts it and i)rocures it tu l)e r-ertiiied by the bank instead of being paid, such cei-tilication is. as between the holder and the drawer, a payment, and discharges the drawer from liat>ility. In discuHsing the giounds upf)n which their decision is based, the C(jurt say : "When the dravvee accepts, it is an appropriation of the funds, pro t.iiito, to the service juul use of the payeti or other person holding the i)ill, so that tlie am(iunt ceases henceforth to be the money of the drawer. an' to' pay the draft. But the jtarties to a certified check, due when certified, occupy a different position. There the money is due and iiayable when the check is certi lied. The bank virtually says that the check is good. ' We have the money of the drawer here ri-ady to pay it. We will pay it now, if you will receive it.' The holder says: 'No; 1 will'not take the mon- ey. You may certify the check, and re- tain the money for me until this check is presented." The law will not permit ;• check when due to be thus presented. anlaintiff in this case, by olitaining certilication of their check, discharged the defendants from all lialiility thereon as drawers, and that tlit' subseiiuent present- ment of the check for payment, though on the next business day after the check was issiKMl, did not revive or in any manner affect the defendants' liability. Hut it is said that a different rulewaslaid down bv this court in Bickford v. P>auk. 42II1. J:is. Hounds v. Smith. Id. '-M.". ; and Brown v. Leckie. 4:! 111. 4!tT. It will lie found, on examination, that in each of those cases certilication of the check was obtained by the drawer before delivery to the payee, and that no presentment was made ity the hohler until made in due course foi' payment. It is easy to see that an essentially »lift»'i-ent rule siiould apply in a case of that kind. The factthatXlu; drawer, before delivering the clici U, gets nVe bank to certify it, in__M^i> w its essenUal nature a.s"li ch( ffiytn'/nver's linTTility in case, on (inc pres- entation Tor payment, the |)aper is dis- honoied. The reasoning of the opinion in the above-mentioned cases slionid be re- stricted in its application to the facts ap- peai-ing in those cases, and. as ai)plied to those facts, it is doul»tless correct, and should be follow e:'.2. 36 CERTIFYING BANK CHECKS— EIGHTS AND LIABILITIES. liolder lias liimself made preseutinent of the check, and. instead of receiving pay- ment, as ho niijxht and should have done, has chcisen rather to acce|)t. in lieu of pay- ment, an express executory af?i*''t'ini?nt by the banl< to |)ay the cliecl< to the hohler when itn-sented for payment at any time ti)ereafter. Much effort is made by counsel to show that, to be consistent with the doi.-trine establislied by the case of Munn v. Burch, 25 III. ;r>. anri in tiie numerous cases in which that decision lias been followed, wemust hold that thedefendants were not released from liability by the cei'tification of the check. In Munn v Burch we held, contrary to the rule recognized in many of the states, that a depositor, by delivering to another his check on hie banker for val- ue, transfers to the payee of the check and his assigns so much of the deposit as the check calls f()r, and^ that on presen tati oii of the check fg^t payment the banker be- comes liable to theholder forthat amount, provided the drawer has on dei)ositat the time a sufficient sum aiiplicable to that purpose to paj' the check. Accordingly. if the banker refuses to pay the check on presentment, he becomes liable to an ac- tion by the holder to recover its amount. It follows that the giving of the check be- comes, at least after presentment, an as- signment to the holder of a sutticient amount of the deposit to pay the check, and therefore a definite ai)i)ropriation of that sum to its payment binding upon all the parties to the check. The argument sought to be made, if we understand it, is that the certification of the check is a no moreeffectual approjiriation of the fund on •lejiosit to the payment of the check than was already made by the act of the draw- er in giving the check, and therefore that one of the chief grounds upon which the rule adopted in other states, that' certili cation releases the drawer, is based, fails or is inapplicable here. If the mere fact of such appropriation, however made, is the test by which to determine whether the drawer has been released or not, there may be force in the argument. We do not understand, however, that such is the case. Some of the authorities, it is true, allude to and dwell upon that circum- stance as pos.sessing very considerable significance, but we do not understand that any of them make it the test or basis of the rule. The rule laid down in Munn V. Burch is based upon the implied agree- ment on the part of the banker to pay out the money deposited to the holders of the depositor's checks, at such times and in such sums as the depositor sees fit. by his checks, to order, and such agree- ment is held to be so far available to the holder of tliedepositor'scheitk as toenablc him. after thecheck has been duly presented for i>aymentand payment refused, to bring suit against the banker in his own name, and i-ecover the amount of the check. The banker, as the result of his imi)lied agree- ment, becomes the principal debtor, but the draweris still liable, at least as surety, and is at liberty at any time, by paying and taking up thecheck, to reinvest himself with the legal title to the mone^' on de- posit. Theappropriation of thefuud, then, so far as any definite appropriation of it can. under the circumstances, be said to bi- made, is only conditional, and follows in strict accordance with tlie terms of the contract betwaen the parties, and must be reirarded as one of the consequences contemplated by them at the time the check was drawn. But where the holder of the check, on presenting it to the bank- er, instead of demanding and receiving payment, as the jiarties contemplated and as is his legal duty, requests and obtains certification, and retains the check in his own hands, wholly different rights are ob- tained, and consequently different rules of law are ai)i)licable. The approjiriation of the deposit to the payment of the check then becomes absolute, and the holder en- ters into new contractual relations with the banker, not contemplated or author- ized by the di'awer, and wlwch i)lace the fund appropriated wholly beyonn on the other, involve legal rights, and invoke the aiiplication of legal rules, so es.sentially different that the doctrine of theca.se of .Munn v. Burch. which is con- trolling where payment is demanded and refused, can have no relevancy to or con-. trolling effect, even by analojiy, in a case where the holder gets thj check certifii-d. We are of the o])inion that no error was committed in refusing to hold thQ proposi- tion submitte«l by the plaintiff as the law in the decision of the case, and that the appellate court properly affirmed the judg- ment. The judgment of the appellate court will accordingly be affirmed. WSBT PUBlylBBINU CO., PRINTKB8 AMI KTKKKUTYPKKH, BT. PAUL, MINN. LAW UBRARY UMVERSITY OF CALIFORNU LOS ANQBLflS ► pamphlet BINDER Manjfoctured by tGAYLORD BROS. IncrJ Syracuse, NY. Stockton, Calif. \ I ^'(^^ 4 •« A- . ^■r ,.... fii;