Ashland tidings. [volume] (Ashland, Or.) 1876-1919, 1914-07-23
NEGOTIABLE PAPER
Bills of Exchange, Bank Checks
and PromiSSOry Notes.
IN A CLASS BY THEMSELVES.

These Convenient Substitutes For
Specie, Which May Pass From Hand
to Hand as Readily as Coin, Differ
Radically From Other Contracts.
We may speak truthfully Of the
strength Of paper, yet how like a para-
dOx it sounds! From childhood we
have been accustomed to take frequent
liberties with the fimsy material, to
fold and rend it according to our light
est whim. and now to speak of 1t as
strong! But strong it is, and the busi-
ness world of America Is bound into
cohesive whole 10y the fbers of mil
lions of notes, checks and drafts which
pledge the honor und credit Of its cld-
EenS
In this brief article we shall attempt
to define three kinds of commercial pa.
per-bills of exchange, promissory
notes and bank checks-that are all
business contracts. They are con-
tracts. however, us to which business
convenience DEGREES that the form
shall be just us important as the sub
sInnce.
If | am hiring Regan the contractor
to build my house and we fall out over
our agreement the court will consider
every possible point connected with
the transaction in order to determine
what our mutual intentions really were.
But If employ Regan to do the work
and give him II promissory note In
payment OF his services, our rights, so
far as that note is concerned, are large
ly determined by the exact form in
which | issued 1t, taken in connection
OF course with the subsequent indorse-
ments-that is whatever written ad-
ditiOns were afterward made to 1t in
the course of business.
The vital feature of bills of exchange
or drafts. as they are generally called
-pr0missOry notes and bank checks Is
their negotiabllity-t Is to say, they
are special class of contracts which
are SO framed and so favored by the
law that If certain rules are adhered to
they can be passed from man to man
quite as freely and far more conven-
BeHtiy tIlun hcCudI ChSn.
An ordinary contract may be assign
ed or transferred from one to another
Thus if ! have agreed to furnish
large factory with knitting machines
may assign my right to be paid for
doing 30 to Bogardus for a valuable
consideration. Suppose. though, that
mlsrepreSented some important feature
OF my knitting machines to the Sue.
Cess Textile company. which ordered
them. and after 1 have transferred my
rights in the contract to BOgardus they
md II out Under such circumstances
tue textile company can employ the de-
frnse of misrepresentation against Bo-
Rlrdus Just as readily as they could
against me. for he has simply stepped
Into nay shoes and In In no better posi-
non than | would be had remained
party 10 the contract
Now this Is just where drafts. notes
aud bills. or. as they are often called
rOiiertively. negotiable instruments or
commercial paper. differ radically from
other contracts. While still In the
hands "f the original PARTIES who gave
them birth they are subject TO any de-
frns'S which one may have against the
other ~ that if Curzon gives prom.
issDry note for 500. due in sixty days,
TO Plaisted and then 6nds that through
D'nTnaI dealings Plaisted really owes
linn Sihn he may at the end of the six.
ty days refuse to pay Plaisted the note
aud demand Instead $400 from him.
SupI"'s+ however. that Plaisted has
meanwhile sold the note to Rangely.
who knows nothing OF his debt 10 Cur
Jnn. can CurZon still set Off Plnisted's g
debt and refuse TO pay Rangely the
notei Undoubtedly he cannot do so.
Snch = ease illustrates the dlstin.
gushing characteristic of commercial
IHper Like bird which has flown
f1I'm the parent nest, 1t Is freed from
ANY deienses which the original parties
Z" " MAY have. Just as soon as 1t has
htTn purchased. IN good faith and for a
'alDniit consideration. by some third
PERSON
IN every other form Of contract the
ruw H. otherwise: land bears its bur.
NcnS from owner TO owner, the as
F,rlrd mortgage conveys no better title
." the purchaser than the assignor had
io give: hut for the purely practical
rraS"n that In trade there must be
s''ine convenient representative of spe
rir. which may pass from hand to hand
IT. readily m actual coin. genera
sgr--uIent and strength OF custom
annne merchants bred the three forms
Ell ''r'dil paper-the hill OF exchange
Tnr prumiSsory note aud the bank checl
ali ot which travel. IN the words Of {
great juriSt. us couriers without lug
gage. and TO all Of which an iunocen
PUr'basrr. for value. gets an absolutel!
"lfnr title Saturday Evening Post.