Legal Remedies.—Elsewhere we have shown how civil and criminal law differ. In criminal proceedings the state is a party and prosecutes offenders through agents or attorneys who are chosen or appointed for that purpose. In all civil offenses the person injured prosecutes the offender, through the courts established by the state for that purpose. Suppose A owed B one hundred dollars for which he gave his promissory note payable in ninety days from date, and which on its maturity A declined to pay. B could then have recourse to a court of law to collect the money. If knowing nothing about the mode of proceeding he would employ a lawyer; if he was familiar with legal proceedings he could do this himself.

What is the first step taken by a lawyer? He makes out a writ or complaint stating B's course of action against A—that he has loaned him a sum of money which he has not paid as he promised to do, and he is summoned to appear in court at a certain time and place and answer why he does not pay and the court is asked to render judgment against him, if there is no defense, for the money due with the addition of the costs incurred in seeking the aid of the court to collect the money. This writ, declaration, or complaint is given to the sheriff of the court where either A or B lives, who "serves" it on A. This service consists in reading a copy of it by the sheriff, or by one of his deputies or a constable, or other authorized person, to A, or in leaving a true and attested copy thereof with him, which has become the universal practice. This is the ordinary mode of beginning a legal action against a person or corporation.

An action thus begun is followed by a trial of the case unless it is settled. Usually the trial comes off within a few months, but not infrequently long delays occur. If, after the introduction of testimony, judgment is rendered in favor of B, an "execution" or order is issued by the court directing the sheriff to levy on A's property, whatever he may have, save a small sum, household furniture and the like, and sell it and turn over the proceeds to B in payment of his debt. If there was a balance left from the sale of A's property after satisfying the judgment of the court and the costs of the legal proceedings, it would be paid to A. This, in fewest words, is the mode of proceeding in a court of law to obtain redress in a civil suit or action.

There are several kinds of actions or remedies used in different cases and these will now be explained. First, is the action of assumpsit. This is the form of action used whenever one sues to recover on all kinds of promises, those implied by the law as well as express promises, not under seal. They include all ordinary promises to do things either orally or in writing. Next, is the action of covenant. This is used whenever one sues to recover for some failure on the part of a person who has given a deed or other sealed writing. Suppose the purchaser of land discovered there was an unpaid mortgage thereon, though the deed covenants or declares that it is free from all encumbrances. The vendee or purchaser would sue to recover for a broken covenant. Another action is replevin which is used to recover specific goods. Suppose someone had taken my horse and refused to deliver the animal to me. The proper remedy would be replevin. Suppose I did not wish to have the horse back, but only its value or worth. Then the proper remedy would be an action of trover. Another form of action in much use is called trespass. This is used to recover damages for injuries to persons and property. If a person knocked me down and I sued him to recover for the injury, trespass would be the proper form of action. In many states an action in tort instead of trespass is the proper remedy. If one should come upon my land and take away wood, grass, stone, or in any way injure it, trespass also would be the form of action. Ejectment is the action employed to eject or turn out a wrongful possessor and recover possession of land. In this action the title or ownership of the land lies at the foundation; and the title to many a piece has been settled in an action of ejectment. One of the most familiar actions is habeas corpus, which is employed to recover a person's liberty from illegal restraint. As the actions of slander and libel have been described, only two others require notice, mandamus and quo warranto. The first of these is used to compel one to do something. A familiar example is that of a city which refuses to pay a judgment that has been rendered against it. The court in this action commands the city to pay, and it must obey unless there exists a legal defense. A quo warranto is the form of legal action to which a person resorts to get possession of an office to which he is entitled, but is denied him. Suppose one is elected mayor of a city, but for some reason or other, the one in possession is determined to keep him out. He would bring this action and a court would then decide whether he was entitled to it or not, and if he were, the court would proceed to put him in possession.

In many of the states, especially the newer ones, not all of these different forms of action are used. Only one form, called a complaint, includes most of them. While the substitution of this has simplified the modes of redress, the substance of the complaint really embodies, as before, the different kinds of injuries above explained.

Life Insurance.—The contract of life insurance is a mutual agreement whereby the insurer agrees on the payment of a fixed sum or premium to pay to a person designated in the policy on the happening of a contingency, usually death, a sum of money. By another form of insurance the insurance may be made payable at a fixed time, or before, should the insured die before that period.

The contract to be valid must be for the benefit of one having an insurable interest, otherwise the contract is a wager, which the law condemns. This is sufficient if the person taking the insurance has such an interest arising from his relation to the insured as creditor and surety, or from the ties of blood or marriage that will justify a reasonable expectation of advantage or benefit from the continuation of his life. It is not needful that this expectation or benefit should possess a pecuniary valuation. The mutual legal rights and liabilities of father and minor child are sufficient to create an insurable interest on the part of each in the life of the other; also the relationship of brother and sister, and that of husband and wife. Likewise a man and a woman who are engaged to be married; and a creditor has an insurable interest in the life of his debtor. And this interest covers not only the amount of the indebtedness, but also future advances, and the cost of taking out and keeping up the insurance. A partner who has advanced the capital of the business has an insurable interest in the life of his partner. More generally any person who invests money relying on the efforts of another to produce a return has an insurable interest in such person's life. A surety therefore has an insurable interest in the life of his principal; an executor in the life of a person who has granted an annuity to the testator; a common carrier even may insure against loss from injuries to passengers. But the relationship between uncle or aunt, nephew and niece and that of cousin is not sufficient to support a policy taken by one in the life of the other.

A policy may be assigned to one who has no insurable interest if made in good faith, and not as a cloak for the procuring of insurance by one having no insurable interest. This rule does not prevail everywhere, but the courts which do not accept this rule usually protect the assignee who has paid the premiums to the amount of his payments, while the estate of the insured takes the balance that may come from the insurer, whenever the assignment of the policy is not invalid. An assignment to one who has an insurable interest as relative, creditor and the like, is always valid.

A general agent, says Justice McClain, "may bind the company by an agreement as to rate of premiums, or other terms of the contract, even as against the express provisions of a policy subsequently issued, there being no negligence on the part of the insured in failing to advise himself as to the terms of the policy; but if the want of authority of the agent to vary the terms of the application is brought home to the applicant, oral communications of the insured to the agent are not to be considered in determining the validity of the insurance. If the agent has exceeded his authority as to the terms of the proposed contract, the company cannot reject that part which the agent was without authority to make and enforce the rest, but must accept or reject in toto."

Until a proposition for insurance has been accepted by the company there is no contract. Delay in accepting an application which is subject to approval does not effect an acceptance. There may be a binding contract of insurance as soon as the company has accepted the application, or on the delivery and acceptance of it by the company's agent, when he has authority to do so. In order to complete the contract before issuing the policy there must be an agreement to this effect, and before the death of the applicant. The receipt by an agent for the first premium, or of a note therefor, subject to the approval of the application by the company, does not effect a contract between insurer and insured.

Some states have enacted statutes prescribing requirements for life insurance policies, or standard forms. Delivery to a third person for the insured may be sufficient. The contract becomes complete when the policy is put in the mail, postage prepaid, for delivery in due course to the insured. Delivery to the insured for examination of course does not effect any engagement on the part of the insurer, nor does a delivery on condition.

It is often stated that the delivery shall not be effectual to create a contract unless the insured is alive and in good health when the policy is delivered and the first premium is paid. Indeed, how could it be valid if the insurer is dead? And if the contract is with a person other than the insured as beneficiary, it would be void on the ground of mistake. Likewise, under such a condition, a policy does not become effective, without a waiver, if the insured is in ill health at the time of its delivery or payment of the premium.

Unless waived by the company, there is usually a stipulation to the effect that the company shall not become bound until the first premium has been actually paid and accepted by the company or its authorized agent. But if the premium is actually paid by the agent of the company for the insured by virtue of an agreement between them, this will bind the company. The payment of the premium by a third person without the knowledge of the insured does not have the same effect.

A general agent has authority to waive the stipulation, that the policy shall not take effect until the first premium is paid, though of course he may be restricted in this regard, but a special agent cannot waive this stipulation; though if he acts otherwise and the company ratifies his act, it is bound. A provision also that a policy shall not be valid unless the premium is paid when the insured is in good health may be waived by an agent who has authority to take applications, collect premiums and deliver policies.

Passing to the nature of the contract, if made in violation of a statute, or if contrary to public policy and this is known by both parties, it is void. Thus a stipulation that a policy shall be payable though the insured may be executed for a crime is contrary to public policy and is therefore void. The same is true of a stipulation insuring against death by suicide while sane. It is against public policy to allow one person to have insurance on the life of another without his knowledge. A policy issued on a person beyond a specified age is prohibited by statute.

What is the effect of fraud in negotiating and issuing policies? If the company or its agent perpetrates a fraud whereby one is induced to take out a policy, he can at his option declare it void, unless so negligent in acting as to work an acquiescence of it. But if acting in a proper way and time he can set up fraud as a defense in an action to get the premium for which the contract has stipulated; or he may sue to have the policy declared void and his premiums returned to him; or he may bring an action against the company or its agent, or both, to recover the damages he may have sustained by the fraud that has been practiced on him.

On the other hand, if the insured has been wronged, the courts furnish relief, and perhaps may set the policy aside. Mistake is a common ground of relief; it must in all cases be clearly proved. And if a policy is susceptible of two constructions, the ambiguity is to be resolved in favor of the insured. As the company framed the policy all of its provisions in its favor are strictly construed. It may be added that the construction which the parties themselves have put upon a contract of life insurance will be generally followed in determining their intention. Again, the entire contract is to be construed together for the purpose of giving effect to each clause and as between general and specific provisions relating to the same matter the specific provisions control.

In determining who is the beneficiary under the terms of a policy of life insurance the courts are governed by the intentions of the parties. They need not be named if they can be otherwise identified, and may be designated in a separate paper prepared for that purpose. The amount named in the policy generally fixes the liability of the company. To obviate the wager feature, the amount of insurance effected for a creditor on the life of his debtor ought to be limited to the amount of the debt with interest and premiums during the expectancy of the life insured.

The risk is presumed to begin from the date of the policy and to continue until the happening of the contingency or time when payment is to be made by the insured. It may be added that words or figures written or printed on the margin of a policy of life insurance, on its back, or on a slip, with reference to the terms and conditions of the contract, constitute a part of it and must be considered in deciding its meaning. But representations made in a prospectus or circular issued by a life insurance company are no part of a contract.

The payment of premiums to a general agent without notice of any limitation of his authority to receive payments will bind the company, but a different rule applies to a special agent. The premiums may be paid by the insured, or the beneficiary, or by the agent of the company whenever he has agreed to pay them for the insuring party. A discount allowed by the company for the punctual payment of premiums belongs not to the agent, but to the insured. Cash is usually paid, though other arrangements also exist for taking notes, that are ultimately paid in cash or from the earnings of the company, and belong to the insured and would be paid to him. In mutual life insurance companies a portion of the premium is often paid in this manner.

A policy of life insurance payable to the insured, or in the event of his death to his personal representatives, may be assigned unless forbidden by statute, therefore a policy payable to the wife of the insured, or another may be assigned by the united act of the insured and the beneficiary. Thus a policy taken out for a wife's benefit is often assigned by her and her husband to his creditors to secure their debts. In some states statutes forbid the assignment of such policies for the benefit of creditors. The written assignment must be delivered to the assignee to be effective. On some occasions assignments have been declared valid where the intention was clearly proved though both the written assignment and the policy remained in the possession of the assignor. An assignee who holds a policy as security is entitled on its payment only to the amount of his claim and advances with interest, including premiums paid to keep the policy alive and thus preserve his security. More generally premiums paid for this purpose are chargeable on the proceeds of the insurance, but a mere volunteer who pays the premiums acquires no lien on the proceeds of the policy when it is paid. Nor can one who ought to pay the premiums give a lien on the policy to another for money advanced by him to pay them; and an assignee who has promised to pay the premiums may be liable should he fail to keep the policy alive.

Contracts of reinsurance are often made by all insurance companies. In some states the reinsuring company becomes liable to an action by the beneficiary named in the original policy. Where the reinsuring company, by agreement, undertakes to reinsure the members of the other company should they execute applications for that purpose, any member who does this is not required to be reexamined or comply with other conditions respecting his age or health.

A policy may be canceled or surrendered by mutual agreement. After the death of the insured the rights of the parties become fixed, and there can be no cancellation. During his lifetime the insured may abandon his contract by refusing to pay the premiums, but an intention to abandon will not be presumed, nor will the taking out of a second policy before his failure to pay the premiums on the other establish an abandonment. If both parties treat the contract as void, neither can revive it without the consent of the other. As the beneficiary has a vested or definite interest in the contract, the insured cannot, by surrendering the policy, cut off the rights of the beneficiary without his or her consent unless permitted to do so by the contract itself.

A surrender or cancellation of a policy may be avoided on the ground of mutual mistake. But the insured cannot seek cancellation on the ground that he thought it was something else when his mistake was simply his own in not reading the release.

A policy may be rescinded whenever fraud has been practiced by either party. Thus, should a greater premium be demanded than that stated in the contract this would be a good reason for rescinding on the part of the part of the insured. Likewise, if he was induced to take out the insurance by the fraud of the company or its agent, unless he has lost his right to rescind through inaction or negligence. Likewise, the company may rescind for fraud practiced by the insured by misrepresentation or other fraudulent acts concerning his age, health, etc. Concealment of facts may and often does operate as a fraud on the company. Says Justice McClain: "If the applicant has answered the questions asked in the application he is justified in assuming that no other information is desired. On the other hand if he wholly fails to answer questions the company waives information as to matters thus asked for by accepting the application without objection. If, however, the applicant purports to answer a question by giving only an incomplete answer, concealing facts which should properly be stated in response to the question, and these concealed facts are material, the policy is voidable." If a material change for the worse in the health of the applicant takes place after the application and medical examination, it is the duty of the applicant to disclose it. The failure to disclose facts of which the applicant is ignorant, or which are immaterial to the risk, is not ground for avoiding the policy.

When a policy is surrendered or canceled by the contract or by statute, the insured may be entitled to the surrender value of his policy. The amount is to be determined by the period for which the policy has to run, the amount of the annual premium, the age of the insured, and the probability of the continuance of his life stated in the usual life tables. The value of an immatured paid-up policy is the unearned premium called the reserve and is to be computed in the same manner as that of a policy on which annual premiums are paid. The beneficiary is entitled to the surrender value as against the insured, as well as the creditors, unless the beneficiary has consented to giving them the preference.

By a clause in the contract of insurance or by statute, the insured can convert his policy into a paid-up policy for such an amount as the premiums would have secured. These conversions often happen where the insured is unable or unwilling to continue to pay the premiums required to maintain the policy. Formerly on the failure of the insured to pay, policies lapsed or were forfeited, and the insurance companies gained large sums from this source. This led to legislation and to the creation of paid-up policies. These are issued on somewhat different terms, but the principle in all of them is the same.

Minor.—The contracts of a minor are of two kinds, those for necessaries and other things. Contracts for necessaries made by him the law will uphold. They are really implied contracts which the law will sustain for his benefit and protection. What are necessaries is a question of fact, not always easily answered. Much depends on a minor's place in society and condition. The question is for a jury to decide, also whether the prices for them are reasonable or not. One of the well-known cases occurred many years ago. The bill against the minor was for more than a thousand dollars for twelve coats, seventeen vests, twenty-three pairs of trousers, five canes, fur caps, chip hats and other things, in less than six months. The jury rendered a verdict for almost the entire amount, but the reviewing court remarked that the bill made the members shudder, that the seller must have known that all these things were not needed for the minor's comfort within that short period, and the verdict was therefore set aside.

The question is constantly arising, what are necessaries? A thing might be to one and not to another. Thus a bicycle merely for pleasure would not be a necessity; one that is used to go to and from an individual's daily work would be. A dentist's bill for repairing one's teeth has been disputed, the law, though, generally favors the preservation of human teeth. Education furnished to a minor may be a necessary thing, yet only when it is suitable to his wants and condition. Should a minor repudiate a contract, the law is observed if he restores all that he has received, or that is capable of restoration.

With respect to contracts for other things, they are not always void, but may be avoided. If they have not been executed, he can disavow them at any time. If nothing is done during infancy inaction operates generally as an affirmation. If he disaffirms a contract, he must return the thing purchased or received, or make the best restitution he can, for it would not be just to retain possession and refuse payment.

A different rule applies to a minor who makes a fraudulent contract. Suppose he buys goods assuring the seller that he is twenty-one years of age when in fact he is not, though nearly so. Can the seller recover on his contract? No, but the law has another way of reaching him. He is liable in an action of deceit, and the amount or damage that may be recovered is that of the goods sold to him.

A minor who has a parent or guardian cannot make a contract even for necessaries, nor is he under any obligation to pay his bills for them. Should he be in need of such things and his guardian or parent be unwilling to furnish them, they can be compelled by law if having the means to provide him with whatever he requires.

Mortgage.—Two kinds of mortgages are given, one kind is secured by real estate, the other kind by personal property. In both the borrower of money pledges his property as security while the money remains unpaid. During this period he usually remains in possession and control of the property, though not always. The borrower is called the mortgagor, the lender the mortgagee. The contract is in writing sealed, is in fact a deed. Sometimes the contract is in two writings, the conveyance of the land and security in one, and the conditions or defeasance on which the conveyance is made in another. It is more usual, however, to set forth the transaction in a single writing or conveyance.

A mortgage may be so made as to cover future advances, but it will not cover them in preference to advances or loans made by another without any knowledge of them. Nor need another person who makes such a loan inquire whether a mortgagor has made any other loan, or for a larger amount than that stated on the public record, where the mortgage deed is recorded. For, it should be added, a mortgage deed is recorded like any other for the benefit of all parties, not only to secure the mortgagee from a later purchaser who might buy if knowing nothing of the prior mortgage, but from another who might be willing to lend on such security like himself; or from a creditor of the mortgagor who might attach the property as belonging to him, if he did not know of the existence of the mortgage. As the record is public, and may be examined by everyone, all who are interested in the property are supposed to examine it and thus find out whether it has been mortgaged, and if it has been, the conditions of the mortgage, and if they do not, their neglect is their own.

Improvements, additions of every kind to property after it has been mortgaged, become a part of it, and if the mortgagee takes future possession, they pass to him. But a difficult question arises sometimes, what additions or improvements are included? We have learned what they are whenever a tenancy relation exists. The law does not favor a mortgagor to the same extent. The test to apply is that of intention. If a mill has been mortgaged, the rule is very broad and the mortgage covers machinery attached by bolts and screws though removable without injury to the premises. If a mortgage has been given, by no evidence can it be shown that the deed was intended as an absolute or entire conveyance of the property. On the other hand by proper evidence it can be shown that an absolute conveyance was intended to be only a mortgage. This has been often done. One may ask, why does the rule not work both ways? There is a much stronger probability of making a mistake in the second case than in the other. One of the facts of great importance in such a dispute is the amount of the consideration or money paid. Suppose a piece of land was worth $1000 and the deed mentioned only $100, unless there was some other explanation, there would be a strong probability that the parties intended only a mortgage which for some reason or other was not completed.

Again, it is a rule of law that an agreement which is in fact a mortgage cannot be changed in character by any other agreement made at the time between the parties relating to the repayment of the money and the return of the property. The law presumes that the entire transaction was embodied in the agreement. "Once a mortgage always a mortgage." Of course this rule does not prevent the parties from making any later arrangement they please about the property.

A mortgage may be made with a power of sale whereby, should the debt be not paid at the time fixed, a valid title may be acquired by a purchase from the mortgagee. The mortgagee thus becomes a kind of trustee or agent for the debtor. This is a great responsibility to repose in the mortgagee, and he must perform the trust in good faith in every respect. He must proceed in a way that will best serve the interest of the mortgagor, and strictly observe the terms stated in the mortgage, otherwise the sale will not be valid and the mortgagor can recover his property. If there is a surplus after satisfying the mortgage debt it must be paid to the mortgagor, or, if he is dead, to his heir. Such deeds of trust are made by large corporations to secure loans, and may be made to secure future advances as well as present ones.

If the property is sold to satisfy the mortgage debt, the mortgagee cannot purchase it, unless authorized by statute, or by the terms of the mortgage; but if it is sold by an officer of the law, the mortgagee is as free to purchase it as any other individual. This rule, though, is denied by some courts, which hold he cannot because the officer is acting as the mortgagee's agent.

A vendor or seller of property, may have for the money he is to receive a lien, which is nearly the same thing as a mortgage. A subsequent purchaser would be affected by this lien, however innocent he might be of its existence. But if the purchaser should mortgage the property to a third person, who should put his deed on record, he would gain a valid lien over the vendor. This lien is founded on the idea that the vendor holds the land in trust for the purchaser until he has paid for it, but is not recognized in every state. It is reasonable to suppose that the owner will not sell his land until he has been paid, or the purchase money has been secured. The lien will also prevail against any assignment that the vendor may make for the benefit of creditors, provided he enforces his lien before the assignee begins to execute his trust.

Much has been said about the notice of the vendor's lien. Any reasonable notice will suffice, but what is such a notice to charge, for example, a second purchaser with knowledge? Payment of a part of the money is held to be knowledge of the lien. Again, a vendee who has paid any part of the purchase money before the delivery of the deed to him has a lien for the amount advanced. A third party who pays the purchase money to the vendor for the purchaser and takes a note for the amount does not have such a lien.

The mortgagor in most states is regarded as the real owner and remains in possession; and the mortgagee has a lien, or security for his advance of money or whatever it may be. The mortgagor may sell his land at any time subject to the mortgage, in other words he cannot by any sale impair the mortgagee's security. On the other hand, the mortgagee can transfer, sell or assign his mortgage to another, and this is often done.

Both parties may insure the premises though the mortgagee cannot exceed his debt. If they are destroyed by fire, the mortgagor cannot claim to have the insurance applied in liquidation of the mortgage debt. The mortgagee, therefore, can first collect the insurance money and then proceed to collect the debt that is due to him from the mortgagor. If the sums collected from the two sources exceed the amount advanced to the mortgagor that is only the mortgagee's affair. But if he insures the property at the mortgagor's request or at his expense, then the mortgagor would have the benefit of the insurance.

Frequently several mortgages are made of the same property. The one that is the first recorded has the first lien, the one recorded next the second lien, and so on. And if the property is subsequently sold to pay the mortgage, the first mortgagee has the first claim to the money received, the second mortgagee next and so on. If there is not enough to pay all, the last mortgagee is the first to be cut off, or to receive less than the full amount due to him.

If a testator devises mortgaged land, is the devisee or person who receives the land also entitled to the money due from the mortgagor? Generally, but not everywhere. A bequest of money securities includes a note secured by mortgage. The mortgagor's interest in the land on his death, if leaving no will directing who shall take it, goes to his heirs, and not to his executor or administrator like other personal property. Of course, if there were no other property that could be used to pay his debts, if he had any, it could be claimed and taken by his creditors for that purpose.

The mortgage usually states a time for paying the debt, and if the terms are not observed, the mortgagee may proceed to take the property. This he cannot do in an arbitrary way, except in the case of mortgages in which the mortgagee is entrusted with power to sell the property and apply the money in payment of the debt. In other cases the mortgagee must apply to the court to fix a time for the sale of the property, if the mortgagor fails to make payment. The courts usually give the mortgagor a period of several weeks or months to pay, and if payment is not made at the end of this period, the land is sold by an officer of the court, who conveys the title to the new purchaser, and if there is any surplus left after satisfying the mortgage, this is returned to the mortgagor. If there is a deficit, he is still liable therefor. Any person who is interested in a mortgaged estate has the right to redeem it; heirs, devisees, creditors. On the death of a mortgagor his heirs may call his executor or administrator to pay the mortgage out of the personal estate if there is any, and not from the sale of real estate, because it was given, so the law presumes, for the benefit of the personal estate belonging to the mortgagor. Or, if the land has been given to a devisee, he can require the executor or administrator to pay the mortgage. Again, if two persons are jointly liable for the debt, and one of them pays it, he may call on the other to contribute his portion. See Chattel Mortgage.

Negotiable Paper.—By negotiable paper is meant paper that can be sold and transferred. The law on this subject is now regulated by a statute that is nearly uniform in almost all the states of the Union. The courts are constantly applying it, and in doing so are putting their meaning or interpretation on the words of the statute. Thus far they have looked with quite similar eyes, and no serious differences have arisen.

The statute declares that a promissory note must be in writing and signed by the maker or drawer; that it must contain an unconditional promise or order to pay a certain sum of money on demand, or at a fixed future time to order or to bearer. And if the note is addressed to a drawee he must be named or indicated with reasonable certainty. A note may be written payable with interest or by stated installments, or with exchange, or with costs of collection, or an attorney's fee in case payment shall not be made at maturity.

An unqualified order or promise to pay is unconditional within the meaning of the law even though it indicates a particular fund from which it is to be paid, or a statement of the transaction on which the note is based. Thus the indorsement of the words "per contract" on the back of a note written at the time of its execution does not affect its negotiability.

A note payable at a fixed future time may be at a fixed period after date or sight, or on or before a fixed future time specified therein, or on or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening be uncertain. A note that is payable on a contingency is not negotiable, and the happening of the event does not cure the defect. Likewise a note which contains an order or promise to do any act in addition to the payment of money is not negotiable. To this rule, though, are some exceptions. Thus a note may be negotiable that authorizes the sale of collateral securities that have been delivered to the holder if the note is not paid at maturity. But a note stating that the title to property for which it is given shall remain in the payee, and that he shall have the right to declare the money due and take possession of the property whenever he may deem himself insecure "even before the maturity of the note," is not negotiable.

Again, the validity and negotiable character of a note is not affected by the fact that it is not dated, or does not specify the value given or the place where it is drawn, or the place where it is payable, or bears a seal, or designates a particular kind of current money in which payment is to be made. Furthermore, a note is payable on demand when it is thus stated, or is payable at sight or on presentation. Also an overdue note accepted or indorsed is regarded as payable on demand, so far as the maker is concerned.

A note may be drawn payable to the order of a specified person, or to him or his order, or it may be drawn payable to the order of a payee who is not the maker, drawer or drawee, or it may be drawn payable to the order of the drawer or maker, or to the drawee, or to two or more payees jointly, or to one or some of several payees, or to the holder of an office for the time being.

Again, a note is payable to the bearer when it is thus expressed, or to a person named therein or bearer, or when it is payable to the order of a fictitious or non-existing person, and the fact is known to the person making it so payable, or when the name of the payee does not purport to be the name of any person, or when the only or last indorsement is an indorsement in blank. On one occasion funds were deposited in a bank in the name of a federal disbursing agent under treasury regulations that "any check drawn by a disbursing office upon moneys thus deposited must be in favor of the party by name to whom payment is to be made and payable to order." The disbursing officer fraudulently drew checks payable to fictitious payees and cashed them under forged indorsements of the fictitious payees' name. The court held that the checks were not payable to bearer and that the bank was not protected in paying them.

A note is not invalid for the reason only that it is ante dated or post dated, provided this is not done for an illegal or fraudulent purpose. The person to whom it is delivered acquires the title from the date of delivery. If a note expressed to be payable at a fixed period after the date is issued undated, or the acceptance of such a note is ante dated, the holder may insert the true date of issue or acceptance. Nor does the insertion of the wrong date avoid the note in the hands of a regular subsequent holder. More generally, when a note is wanting in any particular material, the holder or possessor has the authority to complete it by filling up the blanks. This authority extends to every incomplete feature of the note and may be used for inserting the date, amount, name of the payee, and time and place of payment. When authority is conferred on another to fill blanks it must be strictly followed. If a note is drawn payable with interest at the rate of __ per cent, it draws interest at the legal rate, although the blank is not filled. The presumption that a note was completed before it was signed and not afterwards does not arise in a note written in several inks and by different hands. And the purchaser of a note with an unfilled blank is put on inquiry respecting the authority of a person entrusted with an incomplete note. Thus A signed blank forms of notes and left them with his attorney, but with no authority to complete and issue them until instructed. The attorney filled them up without further instructions and issued them to a person who knew they had been signed, that the attorney had a power of attorney to act for A, but did not attempt to read or otherwise ascertain its terms. A was not prevented from denying the validity of the notes. In another case a person who signed a number of notes in blank as to date, payee and amount, and left them in his desk in his office, whence they were stolen, filled in and indorsed to B for value before maturity and without notice of any defects, was nevertheless not liable on them. When therefore an incomplete instrument has not been delivered it cannot be completed and negotiated without authority, and if it is, it is not a valid contract in the hands of any holder as against the person whose signature was placed thereon before delivery.

Every contract on a negotiable note is incomplete and revocable until its delivery. As between the immediate parties, and also a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by the authority of the party making, drawing, accepting or indorsing as the case may be. The delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property of the note. But where the note is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him is conclusively presumed.

When the language of a note is ambiguous the following rules of construction are applied: (a) if there is a discrepancy between the words and figures in expressing the amount, the words control, if the words are ambiguous or uncertain, reference may be had to the figures to fix the amount; (b) if the note provides for paying interest without specifying the date from which it is to run, the interest runs from the date of the note, if this is undated, from the issue of it; (c) if not dated a note will be considered as dated from the time of issue; (d) if there is a conflict between the written and printed provisions, the former will prevail; (e) if it is doubtful whether the instrument is a bill or note, the holder may elect which it shall be; (f) it is not clear in what capacity the person making the note intended to sign he is to be deemed an indorser; (g) when a note containing the words "I promise to pay" is signed by two or more persons, they are deemed to be jointly and severally liable thereon.

The signature of any party may be made by a duly authorized agent. No particular form of appointment is necessary for this purpose, and the authority of the agent may be established as in other cases of agency. If, however, one signs as agent without disclosing his principal, he is personally liable. Thus, a husband signed a note in his own name without adding more. As he had disclosed no principal, he was personally bound, and his wife, for whom he claimed to have signed the note, was not liable. The maker of a note added to his signature, "Pastor of St. Frances' church." This was regarded as his personal note, all besides his name were words merely of description. A person signed a note thus: "Estate of William R. Clark by William R. Clark, Jr., Trustee." As he was not authorized to borrow on behalf of the trust and give a note as trustee, he was individually liable notwithstanding the form of the note.

Where the signature is forged or made without the authority of the person whose signature it purports to be it is wholly inoperative. Thus A cashed a number of drafts and checks payable to B's order on a forged indorsement of B's name by B's bookkeeper, who appropriated the money to his own use. Nevertheless, B recovered the amount of the drafts and checks from A, nor was his negligence in not examining the bookkeeper's books or accounts a good defense. In another case before a note was delivered to and accepted by the payee, A, whose name appeared on the back, was shown the note who said, "Everything is all right." Afterward he resisted payment on the ground of forgery. As the payee was induced to take the note on A's statement of its genuineness, he could not escape payment.

Every negotiable note is deemed to have been issued for a valuable consideration, and every person, whose signature appears thereon, to have become a party for the value. An accommodation party is one who has signed the note as maker, drawee, acceptor or indorser without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the note to a holder for value, though the latter knew he was only an accommodation party.

What is meant by negotiating a note? By transferring it in a way whereby the transferee becomes the holder or owner. If payable to bearer it is negotiated by delivery; if payable to order it is negotiated by indorsement and delivery. An indorsement may be either special or in blank; and it may also be either restrictive, or qualified, or conditional. A special indorsement specifies the person to whom, or to whose order the note is payable. An indorsement in blank specifies no indorsee, and a note thus indorsed is payable to bearer and may be negotiated by delivery. The holder may convert a blank indorsement into a special one by writing over the signature of the indorser in blank any contract consistent with the character of the indorsement. By a qualified indorsement the indorser becomes a mere assignor of the note, and is made so by adding to his signature the words "without recourse," or others of similar import. Such an indorsement does not impair the negotiable character of the note. When a note is payable to the order of two or more payees or indorsers who are not partners, all must indorse unless the one indorsing has authority to indorse for the others. Again, where a note is drawn or indorsed to a person as cashier or other fiscal officer of a bank or corporation of which he is the officer, it may be negotiated by either the indorsement of the bank or corporation or by the indorsement of the officer. And where the name of a payee or indorser is wrongly designated or misspelled he may indorse the note as therein described, adding, if he thinks fit, his proper signature. The holder may at any time strike out any indorsement which is not necessary to the title. When this is done, he and all subsequent indorsers are thereby relieved from liability on the note.

The holder of a negotiable note may sue thereon in his own name; and payment to him in due course discharges it. Who is a holder in due course? One who holds a note on the following conditions: (a) that it is complete and regular on its face; (b) that he became the holder before it was overdue and without notice that it had been dishonored; (c) that he took it in good faith and for value; (d) that at the time of its negotiation to him he had no notice of any infirmity in the note or defect in the title of the person negotiating it. A note therefore, providing that any delinquency in the payment of interest "shall cause the whole note to immediately become due and collectable" is made overdue by the maker's failure to pay the interest when due, and a subsequent taker cannot be a holder in due course.

To constitute notice of an infirmity in a note or defect in the title of the person negotiating it, the person to whom it is negotiated must have had such actual knowledge of the infirmity or defect that his action in taking the note amounted to bad faith, but merely suspicious circumstances are not enough to put a prudent man on inquiry.

On the other hand if the purchaser does suspect and fails to investigate, lest a defense be disclosed to the maker of the note, he is not a purchaser in good faith. The maker of a note engages that he will pay it according to its terms and admits the signature of the payee and his capacity to indorse, and engages that on due presentation the draft will be accepted or paid or both, according to its terms, and that if it is dishonored, and the needful proceedings in consequence are taken, he will pay the amount. A person placing his signature on a note otherwise than as maker, drawer or acceptor is deemed to be an indorser unless he clearly indicates his intention to be bound in some other way. The Negotiable Instruments Act fixes the liability of a person who is not a party to a note, and who indorses it before delivery. The law was in great confusion before this act established a definite rule. Such a person is now liable as indorser in accordance with the following rules: (a) if the note is payable to the order of a third person, he is liable to the payee and to all subsequent parties; (b) if payable to the order of the maker or drawer, or if payable to bearer he is liable to all parties subsequent to the maker or drawer; (c) if he signs for the accommodation of the payee he is liable to all parties subsequent to the payee.

Presentment for payment is not necessary in order to charge the person primarily liable on a note, but if it is payable at a mentioned place and he is able and willing to pay it there at maturity, such action is equivalent to a tender of payment on his part. Presentment for payment, of course, is needful to charge the drawee and indorsers. When the note is not payable on demand, presentment must be made on the day it falls due. When it is payable on demand, presentment must be made within a reasonable time after its issue. This rule does not apply to all bills of exchange. Thus unreasonable delay in presenting a check will discharge the indorser whether such delay is a cause of loss to him or not. Likewise a certificate of deposit payable on demand must be presented for payment within a reasonable time after its issue in order to hold the indorser. "The usage of trade or business includes the usage of banks relating to presentment of checks for payment. It is sufficient diligence to charge an indorser if a check on the bank in another place is forwarded through various banks for collection in accordance with the regular usage of the business, although presentment might have been more promptly made if a more direct course had been taken." Presentment for payment must be made by the holder or by some person authorized by him to receive payment, at a reasonable hour on a business day and at a defined place, and to the person primarily liable thereon. And if he is absent or inaccessible then to any person who is at the place where presentment is made. If a note is payable at a bank the payor has until the close of banking hours to pay it, and if, before the close of the bank day, he deposits money enough to pay it a demand earlier in the day is premature. Delay for presenting a note for payment is excused where the delay is caused by circumstances beyond the holder's control, and he is in no way negligent. Nor need presentment for payment be made when after using reasonable diligence it cannot be made, or where the drawee of a bill is a fictitious person, and lastly where presentment, express or implied, has been waived.

Every negotiable note is payable at the time fixed therein. When the day of maturity falls on Sunday or a holiday, the note is payable on the next succeeding business day. Notes falling due on Saturday are to be presented for payment on the next succeeding business day, except that notes payable on demand may, at the option of the holder, be presented for payment before twelve o'clock noon on Saturday when that entire day is not a holiday.

When the note is payable at a fixed period after the date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run, and includes the date of payment. And where a note is made payable at a bank it is equivalent to an order to the bank to pay it for the account of the principal debtor thereon. In accordance with the notation on the margin of a note the holder sent it for collection to a bank which held, as a special deposit, the maker's money. The cashier at maturity notified the maker who directed the cashier to pay the note. The cashier said "All right, your note is paid." The note was regarded as paid.

When a negotiable note has been dishonored by non-acceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged. A written notice need not be signed and an insufficient notice may be supplemented by verbal communication. Nor does misdescription of the note vitiate the notice unless the party to whom the notice is given is in fact misled thereby. The notice may be in writing or merely oral, and may be given in any terms which sufficiently identify the note and indicate that it has been dishonored by non-acceptance or non-payment. It may be delivered personally or through the mails. Where the parties to be notified are partners, notice to any one of them is notice to all even though there has been a dissolution. But notice to joint parties who are not partners must be given to each of them, unless one of them has authority to receive the notice for the others.

When the person giving, and the person who is to receive notice reside in the same place, it must be given within the following times: (a) if given at the place of business of the person who is to receive notice this must be done before the close of the business hours on the day; (b) if given at his residence it must be given before the usual hours of rest on the day following; (c) if sent by mail it must be deposited in the post office in time to reach him in usual course on the day following. If the parties reside in different places the notice must be sent within the following times: (a) if sent by mail it must be deposited in the post office in time to go by mail the day following the day of dishonor, or if there be no mail at a convenient hour on that day by the next mail thereafter; (b) if given otherwise than through the post office then within the time notice would have been received in due course of mail if it had been deposited in the post office had it been deposited in the post office as above described.

If a party had added an address to his signature the notice must be sent to that address, if he has not, then the notice must be sent as follows: (a) either to the post office nearest to his place of residence or to the post office where he is accustomed to receive his letters, or if he lives in one place and has his place of business in another, notice may be sent to either place, or if sojourning in another place, the notice may be sent there. In any event if he receives the notice within the time specified, it will satisfy the law.

Of course notice may be waived; sometimes, also, it is quite impossible to give notice; whenever this happens the law does not require notice to be given.

Something should be added concerning alterations that are made occasionally in negotiable instruments. Any alteration which changes the date, the sum payable either of principal or interest, the time or place of payment, the number or the relations of the parties, the medium or currency in which payment is to be made, or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect is a material one and ought not to be made. To add the words "with interest," with or without a fixed rate, is a material alteration. But the insertion by the payee of the words "interest" after the making of a note by authority of maker will not vitiate it. And if a note had the clause, "interest at __ per cent," the insertion of the legal rate would not be a material alteration since the legal import would not be changed.

The position of a writing on a note is not important, for the effect of the contract is to be gathered from the four corners of the paper. The general rule is, if a memorandum written on an instrument in the margin or at the foot is made before or at the time of its execution, it is considered a part thereof, and if it affects the operation of the terms of the body of the instrument it is a material part. It follows that words written by a party on the margin of an instrument after its execution and delivery, constitute an alteration if intended to affect the terms of the instrument and would have such effect if they were there when the instrument was executed.

A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed determinable future time a certain sum of money to order or bearer. A bill of itself does not operate as an assignment of the funds in the hands of the drawee available for its payment, nor is the drawee liable on a bill until he accepts or agrees to pay it. An inland bill is one drawn and payable within a state. Any other is a foreign bill.

An indorsed promissory note and an accepted bill are very much the same thing, and that is why the law always treats of both together. The maker of a note incurs the same obligations as the acceptor of a bill, both are the parties primarily liable thereon, and the indorser of a note and the drawer of a note are both secondarily liable on proper notification of the failure of the primary parties to pay, as we have learned. The payees in both cases are the same. The acceptance of a bill is the signifying by the drawee that he has assented to the drawer's order, and must be in writing. An unconditional promise in writing to accept a bill before it is drawn is deemed an actual acceptance in favor of every person who on the faith thereof receives the bill for value. The drawee is allowed twenty-four hours after presentment to decide whether or not he will accept the bill; but the acceptance, if given, dates from the day of presentation. Furthermore, an acceptance may be qualified as to time, acceptance of payment in part only and in other ways. When a foreign bill is not accepted it must be protested, which must specify the time and place of presentment, and other particulars, and is usually made by a notary public, though this can be done by other persons.