The Princeton union. [volume] (Princeton, Minn.) 1876-1976, 1914-06-25
NEGOTIABLE paper: !: /.
Bills Of Exchange, Bank Checks
and Promissory Notes.
IN A CLASS BY THEMSELVES.


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, vet how like para
dox it sounds From childhood we
have been accustomed to take frequent
liberties with the flimsy material, to
fold and rend it according to our light.
est whim. and now to speak of it as
strong! But strong it is, and the bust
ness world of America is bound into
cohesive whole by the fbers Of mil
lions of notes, checks and drafts which
pledge the honor and credit of its citi-
zens.
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, as to which business
| convenience DEGREES that the form
shall be just as important as the sub
stance.
| IL all u4l4uS nCSdA tAC SoAIAdNCOA
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 l employ Regain to do the work
| and give him a prOmlSSOry note in
payment Of his services, our rights, so
far as that note is concerned, are large
~ determined by the exact form in
| which l issued it, taken in connection
Of course with the subsequent indorse-
ments-that is, whatever written adj
the course Of business.
The vital feature of bills Of exchange
or drafts, as they are generally called
-promissory notes and bank checks is
their negotiability is to say, they
are a 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-
iently than actual cash.
An ordinary contract may be assign
ed or transferred from one to another.
Thus if l have agreed to furnish a
large factory with knitting machines /
may assign my right to be paid for
doing so to Bogardus for valuable
consideration. Suppose, though, that
misrepresented some important feature
of my knitting machines to the Sue
cess Textile company, which ordered
them, and after have transferred my
rights in the contract to Bogardus they
find it out. Under such circumstances
the textile company can employ the de-
Tense Of Misrepresentation against Bo.
gardus just as readily as they could
against me. for he has simply stepped
into my shoes and is in no better posi-
ton than l would be had remained g
party to the contract
Now, this is just where drafts. notes
and bills. or, as they are often called
collectively, negotiable instruments OF
commercial paper. differ radically from
other contracts. While still in thu
hands of the original parties who gave
them birth they are subject to any de
lenses which one may have against tn
other, so that if Curzon gives Il prom
issory note for $500, due in sixty days
to Plaisted and then finds that through
t mutual dealings Plaisted really owe
him $500 he may ut the end of the six
r ty days refuse to pay Plaisted the not
I and demand instead $500 from him
i Suppose. however. that Plaisted ha
meanwhile sold the note to Rangely
: who knows nothing OF his debt to Cur
> zon, can Curzon still set off Plaisted'
debt and refuse to pay Rangely tn
+ note? Undoubtedly he cannot do so.
q Such a case illustrates the disti1
gushing characteristic Of commerce.
:. paper Like bird which has flow
from the parent nest, it is freed fror
y any defenses which the original partie
y to it may have, just as soon as it ha
- been purchased. in good faith and for
r, valuable consideration. by some thir
, person.
, In every other form of contract til
:. rule is otherwise: land bears its bu
- dens from owner to owner. the a.
# signed mortgage conveys no better It'll
-. to the purchaser than the aSSignOr ha
y to give: but for the purely practic:
= reason that in trade there must
r. some convenient representative of sp
II Gle, which may pass from hand to han
Il as readily as actual coin. gener
e agreement and strength of custo
,s among merchants bred the three form
% of credit paper-the bill Of exchang
the promissory note and the bank chez
"a all Of which travel. in the words of
7 great jurist. as couriers without lu
q gage. and to all of which an innoce1
&c purchaser. for value. gets an absolute
~ clear title.--Saturday Evening Post
n Deceptive. s~
It The Pastors Wife-What peculi'
ir eyes young Ashley has. They alwa.
seem half closed The Pastor-Yes.