NEGOTIABLE PAPER 213 payment. In this way the paper may pass through many hands, and be the instrument of many payments ; and the owner for the time being will be always protected against the consequences of a loss of the instrument, be- cause so long as he keeps it the indorsements will show that he alone has legal right to the money. In either of these forms of indorse- ment the indorser is held to undertake to make payment of the bill or note to the legal holder, provided the drawee or maker does not meet it when due, and the indorser is duly notified of the dishonor; and if there are several indorsers, the undertaking of each is the same. To avoid this, the indorsement may be without recourse ; that is, the indorser in writing his name upon the paper may write over it " without recourse," or any other words indicating that he is not to be looked to for pay- ment in any contingency. This does not affect the negotiability of the paper, but is only to shield the indorser from personal responsibil- ity in case the drawee or maker fails to make payment. In order to understand the advan- tages to the holder of negotiable paper to be derived from this quality, the position of the holder may be compared with that of the as- signee of other rights in action. Suppose, for instance, that one shall give his creditor a pa- per in these words : " Due A. B. five dollars, payable on the first day of January next," dated and signed by him; this paper is not negotiable, because it is payable only to A. B., and not to his order or to the bearer. If this paper is sold by the payee, and suit is brought upon it, this must be in the payee's name, as already stated. But it may be that when thus sued the maker will set up some defence to it, as that it was obtained by fraud, or without consideration, or that it has been paid ; and such defence would be equally good against the paper in the assignee's hands as it would be were the payee still the owner. On the other hand, suppose the paper to be a promise to pay five dollars to A. B. or order on the first day of January after its date ; in this case, if A. B. sells the note and indorses and deliv- ers it, the assignee may not only sue upon it in his own name if it is not paid at maturity, but if it was indorsed to him before it fell due, and he paid value for it in good faith and without notice or knowledge of any defence to it, he may enforce payment regardless of any such defence, though it might have been one that was perfectly good as against the payee himself. In this respect negotiable pa- per is placed on the footing of money. If a man loses his watch, or is robbed of it, and the finder or robber sells it for value to an innocent purchaser, who sells it to another, and he to another, and so on, the owner can take it wherever he can find it, for no buyer acquires the slightest property in it against the owner. But if a man loses or is robbed of gold coins, and the finder or robber pays them away to an innocent party in the pur- chase of goods, the owner loses his money. He cannot reclaim it unless by proof that the receiver of it knew when he took it that it belonged to some one other than the holder. Now this is precisely so in relation to promis- sory notes or bills of exchange, payable to order or to bearer. A familiar example may be found in bank notes, which are only prom- issory notes payable to bearer, and which stand exactly on the footing of coined money, in that any one receiving them innocently for value holds them against any original owner. If we require the reason for this doctrine, it is that negotiable paper may become the adequate instrument of business, as the word negotiable implies ; and for this end, that it may repre- sent money, and take the place of money, and possess in all the transactions of business all the immunities and privileges of money. If we understand clearly this principle and pur- pose of negotiable paper, or rather of the rules of law in relation to negotiable paper, we shall be able to understand those rules. It is for this purpose that all those rules aim at giving to negotiable paper the certainty of money; at making it tell its own story as money does ; and, in a few words, at enabling every person who holds it to use it precisely as he would use money, with the additional advantage that he may by his indorsement add his own credit to that which the paper already holds. The chief rules governing ne- gotiable paper may be here stated. No espe- cial form is necessary to either a bill or a note. The essential things are, a distinct promise, and sufficient certainty as to the payee, the payer, the amount, and the time of payment. The paper may be payable to any body or num- ber of persons, if sufficiently designated, as " to the executors of A. B.," &c. ; but if pay- able "to A. or B.," it is bad for want of cer- tainty. It must be payable in money and -not in property; and in England it has been de- cided that paper payable in bank of England notes was not negotiable, because such notes were not money. Similar decisions have been made in some of the states, while in others it is held otherwise if the paper is payable in what passes current as money at par. It is not to be inferred from what has been said that those only can be indorsers to whom or to whose order the paper has been made payable ; any number of persons may indorse paper ^ in order to charge themselves contingently with its payment under the rules given further on. As soon as negotiable paper has been dishon- ored, or is over-due, it loses almost the whole of its peculiar character, and what may be called its privilege. The reason is the obvious one, that it is no longer capable of negotiation in the proper sense of the word ; that is, it is no longer fit to be an instrument of business : in the first case, because it is already discredited, and cannot be considered the equivalent of money ; and in the second, because there is no longer any time fixed when it can be paid or
