the tendency of the time now is to recognize more fully the spirit which governed the Statute of Anne in giving legal effect to a universal custom, and to extend the quality of negotiability to other instruments when such instruments are looked upon as negotiable by the entire business community.1 The States of the Union being independent of one another in matters of commercial law, it has necessarily followed that there has been some diversity in the law of NegoNegotiable paper. tiable Instruments. Thus, the form of words necessary to confer negotiability differs in various States. As has already been said, the Statute of Anne has been substantially adopted in many States. In others, special requirements are appointed by statute, such as that the instrument shall be payable at a bank, etc. Another instance of diversity is the obligation and status of an irregular indorser, who is variously presumed to be a joint maker, a guarantor, or simply an indorser. The foregoing are given merely as examples of the many points on which there is a difference in the various States. In 1882, Great Britain enacted a law entitled the Bills of Exchange Act, which was, in effect, a codification of the law relating to bills, notes, and checks. This Act having worked very well, the Commissioners for the Promotion of Uniformity of Legislation in the United States took steps for the enactment of a similar statute for this country on the lines of the British statute. The result was that an Act entitled the Negotiable Instruments Law was drafted by Mr. John J. Crawford of the New York Bar, and was, after consideration and some amendment, adopted by the Commissioners.2 The Act is mainly declaratory, but it has made some changes which are summed up by Dean Ames, of the Harvard Law School, in the Harvard Law Review for December, 1900, pp. 242-243, substantially as follows: A negotiable instrument may be made payable to one or more of several 1 Goodwin v. Robarts, Law Reports, 10 Exchequer (English), p. 357. payees, or to the holder of an office for the time being. An instrument, though indorsed in blank, ceases to be negotiable by delivery whenever the last indorsement thereon is a special indorsement. The maturity of an acceptance for honor of a bill payable after sight shall be calculated from the date of the noting for non-acceptance. The abolition of days of grace; the assimilation of sight and demand paper; the provision that the negotiability of the instrument shall not be affected by its bearing a seal; that a payor may disregard a condition in an indorsement; and that the holder in due course may enforce payment of an altered instrument according to its original tenor. So far, the Act has been adopted in sixteen jurisdictions, viz., Colorado, Connecticut, Florida, Maryland, Massachusetts, New York, North Carolina, North Dakota, Oregon, Rhode Island, Tennessee, Utah, Virginia, Washington, Wisconsin, and District of Columbia. The dates of adoption of the law in the foregoing vary from 1897 to 1899, and up to the present time its effects do not appear to have come under the consideration of courts of last resort. While there has necessarily been some criticism on minor points, the general opinion seems to be that, on the whole, the Act is a good one, and likely to be of great use in making clear the law on this most important branch of Contract. The aim of this statute is to clarify and consolidate rather than create; it has settled doubtful or disputed points, deciding them according to the weight of authority in the United States, and it has changed the law only in cases where modern conditions have rendered the old rules cumbersome or ineffective. Next, as to Statute Law in relation to Contract. Two great statutes, passed in England in the seventeenth century and substantially adopted in the United Statutory States, have exercised great influence on the law changes. of Contract. These are the Statute of Frauds and the Statute of Limitations. Statute of Frauds. Contracts,1 First, as to the Statute of Frauds. This statute, says Professor Parsons, in his work on "was intended as an effectual prevention of all the more common frauds practised in society . . . The questions which have arisen under this statute are almost innumerable, and the great variety of cases leave some of them as yet unsettled. But the statute has had a most important operation upon a great variety of contracts, especially upon those of sale and guaranty.” Nothing more can be attempted here than a brief summary of the chief points of the statute, the fourth and the seventeenth sections of which peculiarly affect the law of Contract. The fourth section provides that "no action shall be brought whereby to charge" a person upon certain specified contracts, unless "the agreement or some memorandum or note thereof shall be in writing, and signed by the party to be charged, or some other person thereunto by him lawfully authorized." In the States which have adopted the wording of the English statute, it is held that the contracts specified by this section, if made orally, are not void but voidable Such a contract cannot form the basis of a suit, but if it has been fully performed, the courts will recognize and protect the rights of the parties under it.2 The contracts specified in this section. are as follows: Promises by an executor or administrator to answer damages out of his own estate; promises to answer for the debt, default, or miscarriage of another person; agreements made in consideration of marriage; contracts or sales of lands, tenements, or hereditaments or any interest in or concerning them; agreements that are not to be performed within the space of one year from the making thereof. On all these points there have been many questions raised and discussed by the courts, the details of which would, however, be out of place here. The memorandum required by the statute must, generally, 1 Parsons on Contracts (7th edition), vol. iii. p. 3. 2 Clark on Contracts, p. 129, and cases cited. show the parties, terms, subject-matter, and the consideration. It need not be contained in one paper if the various papers relied on show by internal evidence their connection. This connection, however, cannot be shown extrinsically by oral testimony. The seventeenth section provides "that no contract for the sale of any goods, wares and merchandises, for the price of fifty dollars or upwards, shall be allowed to be good" except under the specified conditions. Some question has arisen as to whether, under the wording of this section, a contract within its provision which failed to fulfil the specified conditions has any validity, the language "no contract shall be allowed to be good," differing from that of the fourth section. On this point Mr. Clark says: "In this country the question has been decided, and it has been held that the difference in the wording of the two sections of the statute in this respect is immaterial, and that failure of a contract within the seventeenth section to comply with its requirements does not go to its existence, but merely renders it unenforceable by suit, as in the case with verbal contracts within the fourth section. . . . In Missouri, however, it has been held that section 17, unlike section 4, goes to the very existence of the contract." 1 As in the case of the fourth section, the seventeenth has given rise to much discussion, controversies having occurred principally on the question of the interpretation of the clause "sale of any goods, wares or merchandises," and upon what is and what is not a fulfilment of the required conditions. These questions, however, belong properly to the special Contract of Sale, and will not be considered here. We turn now to the Statute of Limitations. Passed in the 21st James I., it has been adopted, substantially as originally passed, in every State of the Union, although in many States provision is made, in addition, for especial demands or debts. Thus, in Cali 1 Clark on Contracts, p. 146 and notes. Statute of Limitations. fornia, the recovery of rents and profits in ejectment is limited to three years, and in Missouri, scire facias to revive a judgment is limited to ten years from its rendition. Passing over special cases, we may note that the statute has had a somewhat varied career, both as regards the estimation in which it has been held and the principle on which it is founded. There seems to have been at one time an opinion that the plea of the statute was dishonorable, and not to be favored.1 Justice Story, as quoted by Mr. Parsons, thus states the view just mentioned. "Yet I well remember the time when courts of law exercised what I cannot but deem a most unseemly anxiety to suppress the defence; and when, to the reproach of the law, almost every effort of ingenuity was exhausted to catch up loose and inadvertent phrases from the careless lips of the supposed debtor, to construe them into admissions of debt. Happily, that period has passed away; and judges now confine themselves to the more appropriate duty of construing the statute, rather than devising means to evade its operation." The disrepute into which the statute fell for a time was probably caused by a change in opinion regarding the principle on which it was founded, thereby making possible the practices so severely commented upon by Justice Story. At first it seems to have been regarded as a statute of repose, but soon after another view was taken, and it was held to be a statute of presumption. Not before the prevalence of the latter opinion do we find it regarded as a dishonorable defence. There is, of course, an important practical distinction involved. If the statute is to be regarded as one of presumption, i. e., a presumption that the debt claimed has been discharged, it can be no bar to an action nor afford any protection to the debtor when the presumption is rebutted. Therefore, a simple acknowledgment by the debtor that the claim is not settled will be sufficient to rebut the Parsons on Contracts (7th edition), vol. iii. p. 70. 2 Parsons on Contracts (7th edition), vol. iii. p. 73. |