of commercial paper as to make it an available medium for commercial transactions. § 472. The Negotiable Instruments Law.-The common law governing negotiable instruments which is commonly known as the law merchant has been codified into the Negotiable Instruments Law and this code has been adopted in almost all of the states and in the District of Columbia. A similar act has been adopted in England. The main objects of the code are to produce uniformity among the various states "and to preserve its existing rules, as reflected by the current of the best judicial authority and existing legislation, in plain intelligible terms." Since it is mainly the codification of the common law and existing statutes with but few important changes, this chapter will deal with the underlying principles of the code, it in itself being too lengthy to be printed in a volume of this scope. § 473. Origin of law merchant.-Bills of exchange which were first used by the bankers and merchants of Florence and Venice, to facilitate the transfer of credits between distant points, came to England through France early in the fourteenth century. Negotiable notes did not come into use in England until about two hundred years ago. Embarrassments arose in the application of the common law of England to these forms of contract, and it was after a long struggle that the courts engrafted upon the common law the law merchant, by which the parties to bills and notes are put upon a footing entirely different from that of parties to other contracts. Some statutes require that the note, to be negotiable according to the law merchant, must be payable to the order of the payee; some that it must be payable to his order and at a bank of discount and deposit. Some : authorities hold that a promissory note is negotiable, without the phrases "or order" or "to the order." Notes payable to bearer are negotiable by delivery. § 474. Foreign and inland bills.-A foreign bill of exchange is one that is drawn in one state or country and payable in another, and the several states of the Union are foreign to one another in this respect. An inland bill of exchange is one that is drawn and payable in the same state or country. § 475. Parties to a bill of exchange. The parties to a bill of exchange may be the drawer, who is the maker; the drawee, the person who is requested to pay it; the payee, to whom by the terms of the bill it is to be paid. We give a simple form of a bill with the three parties named: $500.00 NEW YORK, May 1, 1895. On demand pay John Jones (payee) or order five hundred dollars, value received, and charge same to account of JOHN SMITH (drawer). TO RICHARD ROE (drawee), Philadelphia. § 476. Indorsement.-If John Jones, the payee, wishes to transfer the bill he does so by simply writing his name on the back of it and delivering it to the person to whom he transfers it, and this new party, so long as he keeps the paper, is the indorsee or holder. If he in turn wishes to transfer it, he writes his name on the back and gives it to the person to whom he transfers it, in which case he loses his character as indorsee and holder and becomes an indorser, and the person to whom he transfers the paper becomes the indorsee and holder. of commercial paper as to make it an available medium for commercial transactions. § 472. The Negotiable Instruments Law.-The common law governing negotiable instruments which is commonly known as the law merchant has been codified into the Negotiable Instruments Law and this code has been adopted in almost all of the states and in the District of Columbia. A similar act has been adopted in England. The main objects of the code are to produce uniformity among the various states "and to preserve its existing rules, as reflected by the current of the best judicial authority and existing legislation, in plain intelligible terms." Since it is mainly the codification of the common law and existing statutes with but few important changes, this chapter will deal with the underlying principles of the code, it in itself being too lengthy to be printed in a volume of this scope. § 473. Origin of law merchant.-Bills of exchange which were first used by the bankers and merchants of Florence and Venice, to facilitate the transfer of credits between distant points, came to England through France early in the fourteenth century. Negotiable notes did not come into use in England until about two hundred years ago. Embarrassments arose in the application of the common law of England to these forms of contract, and it was after a long struggle that the courts engrafted upon the common law the law merchant, by which the parties to bills and notes are put upon a footing entirely different from that of parties to other contracts. Some statutes require that the note, to be negotiable according to the law merchant, must be payable to the order of the payee; some that it must be payable to his order and at a bank of discount and deposit. Some : authorities hold that a promissory note is negotiable, without the phrases "or order" or "to the order." Notes payable to bearer are negotiable by delivery. § 474. Foreign and inland bills.-A foreign bill of exchange is one that is drawn in one state or country and payable in another, and the several states of the Union are foreign to one another in this respect. An inland bill of exchange is one that is drawn and payable in the same state or country. § 475. Parties to a bill of exchange. The parties to a bill of exchange may be the drawer, who is the maker; the drawee, the person who is requested to pay it; the payee, to whom by the terms of the bill it is to be paid. We give a simple form of a bill with the three parties named: $500.00 NEW YORK, May 1, 1895. On demand pay John Jones (payee) or order five hundred dollars, value received, and charge same to account of JOHN SMITH (drawer). TO RICHARD ROE (drawee), Philadelphia. § 476. Indorsement.-If John Jones, the payee, wishes to transfer the bill he does so by simply writing his name on the back of it and delivering it to the person to whom he transfers it, and this new party, so long as he keeps the paper, is the indorsee or holder. If he in turn wishes to transfer it, he writes his name on the back and gives it to the person to whom he transfers it, in which case he loses his character as indorsee and holder and becomes an indorser, and the person to whom he transfers the paper becomes the indorsee and holder. § 477. Duty of the holder.-It is the duty of the holder of the bill, whether he be payee or indorsee, to promptly present it to the drawee for payment, if it is payable on demand, or to present it to him for acceptance if presentment for acceptance is necessary to fix the maturity of the instrument, or where the instrument expressly stipulates it, or where the bill is drawn elsewhere than at the residence or place of business of the drawee. If the bill is accepted the drawee evidences his acceptance by writing across the face of the bill the word "accepted," and signing his name under it. If when presented to the drawee he refuses to pay or accept the bill, it becomes the duty of the holder to have it protested if it is a foreign bill; that is done by a notary public who presents it for payment or acceptance at the place where it is payable in business hours, and upon acceptance or payment not being made, he protests the bill and makes a certificate, attested by his signature and notarial seal, showing the fact of presentment and nonacceptance or nonpayment, as the case may be. Notice in writing of protest must be promptly given by the notary to the drawers and indorsers, if any, in order to fix their liability to the holder. If the bill is not presented in time, and if notice of nonacceptance or nonpayment and protest is not promptly given, the drawer and indorsers are discharged from liability, unless by the terms of the bill presentment, demand and protest are waived. § 478. Special indorsements.-The form of indorsement, and the rights and liabilities of indorsers and indorsees, are not always the same. By an indorsement "without recourse," the indorser engages that the instrument is the valid obligation of those whose names are upon it and that he has the right to indorse it, but does |