consideration for a bill is illegal when it is wholly or in part immoral, contrary to public policy, or forbidden by statute."* Thus, B embezzles the money of a building society. His wife and brother give promissory notes to the society for the amount, on the implied condition that he shall not be prosecuted. The notes are given on an illegal consideration and cannot be enforced.""

When a bill is given for a consideration which, by statute, expressly makes it void, it is, as against the party who gave it, void in the hands of all parties, immediate or remote." Thus, A draws a bill on B payable to his own order; B accepts for a consideration which, by statute, avoids it; A indorses it to C, who takes it for value and without notice. C can sue A, but he cannot sue B."

DELIVERY

40. Delivery of an instrument is the transfer of possession of it, actual or constructive, from one person to another. Actual possession will result from giving it into the payee's hands, and constructive possession is effected when it is in the actual possession of the agent of the payee. Delivery is the final step necessary to perfect any written contract; in fact, it becomes a contract only by delivery. In order to give an instrument effect, it must be delivered, as by that act the property in an instrument passes.' So long, therefore, as a bill or note remains in the hands of the drawer or maker, it is a nullity. Where B owed C a debt and made a note for the amount payable to C, B dies and the note is found among his papers, C has no right to the paper, and, if it be given to him, he cannot enforce payment on it.' Where an instrument was stolen from a drawer, in which it had been placed by one who was a party to it, he was held not to be liable upon it because his contract had not been completed by delivery of the instrument.*

64 Chal. Dig. Eng. B. of E. Act (5th Ed.), p. 100. 6519921 Ch. (Eng.) 173.

664 B. & Ald. (Eng.) 212 (1821).

67 Ibid.; Chal. Dig. Eng. B. of E. Act (5th Ed.), p. 101.

1 L. R. 5 C. P. (Eng.) 42 (1869). 21 Dan. Neg. Inst., Sec. 63.

31 Ex. (Eng.) 32 (1847).

43 Q. B. Div. (Eng.) 525 (1878).

The delivery of a promissory note by the maker is necessary to a valid inception of the contract. The possession of a promissory note by the payee or indorsee is prima facie evidence of a delivery; but if it appear that the note has never been actually delivered, and that without any negligence or fault on the part of the maker, but by force or fraud, it was put in circulation, there can be no recovery upon it, even when in the hands of an innocent holder."

41.

IMPORTANCE OF. INTENTION

Delivery by Mistake. - An important requisite to delivery is intention; so, if an instrument be handed to a payee for his inspection and he take it away against the maker's will, that would not constitute a complete and valid delivery. A delivery may be valid, even though made by mistake. A thing done in mistake is done intentionally, though the effect or result may not be in the mind and may not be intended. A person may desire to send a letter to A, but if in consciousness he send it to B, though under mistake, the sending is intentional; he has adopted the means whereby the letter goes to B and that is enough. A delivery by mistake may, however, be revoked by mutual consent."

No liability will attach to the maker of a note who delivers it in the belief that it is a paper of a different character, the mistake being induced by the payee's fraud, and the maker being chargeable with no negligence. When there is negligence on the part of the maker, if he can read and does not use ordinary precaution against imposition, he will be liable in a suit by a bona-fide holder. Delivery of an instrument

may be made by an agent for his principal, and such delivery within the scope of the agent's authority is valid, even though in violation of the principal's instructions, if the instrument were transferred to a holder in good faith without notice.

As to the time a bill or note is considered as delivered, the rule is, if it bear no date, the time must be computed from its actual delivery, and if the day of the actual delivery cannot be proved, it will be computed from the earliest day on which it appears to have been in the hands of the payee or any holder.

BY WHOM MADE-WHEN EFFECTUAL; WHEN PRESUMED

42. Delivery, when effectual and when presumed, is thus prescribed by the English act," and by negotiable instruments laws in the United States," where such have been enacted:

As between immediate parties, and as regards a remote party" other than a holder in due course, the delivery, in order to be effectual, must be made either by, or under the authority of, the party making, drawing, accepting, or indorsing, as the case may be; it may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument. But, if the instrument be in the hands of a holder in due course," a valid delivery thereof by all parties prior to him, so as to make them liable to him, is conclusively presumed. Where the instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved.

DELIVERY BY MAIL

43. Depositing an instrument in the post office with the assent of the payee or indorsee is a sufficient delivery in the United States; but placing a package containing bills of exchange, and addressed to a payee, in a servant's hands to be given to the postman was held, in England, to be no delivery." Delivery to a postman direct is. equivalent to depositing a bill or note in the post office."

10 Eng. B. of E. Act, Sec. 21 (2).

11 N. Y. N. I. L., Sec. 35.

12 See subtitles General Remarks,

Words and Phrases, supra.

13 Ibid.

145 Price (Eng.) 428 (1818).

152 Hurlst. & C. (Eng.) 956 (1864).

By the regulations of the English post office, a letter once posted cannot be reclaimed. If the indorsee of a bill authorize the indorser to transmit to him by post, the property in the bill passes to the indorsee, and the indorsement becomes complete as soon as the letter which contains the bill is posted."

DELIVERY ON SUNDAY

44. In England, and in most of the United States, statute law interdicts the delivery of bills and notes on Sunday, and, generally, in suits to recover on instruments, the claimant is denied the right to recover when he has to set up an illegal agreement to which he was a party to establish his claim. Yet, it seems to be the rule that, as delivery completes the contract, a bill or note, though dated. and signed on Sunday, would be valid if delivered on another day."

16 L. R. 9 Ch. (Eng.) 27 (1873).

17 40 Mo. 555 (1867); 72 Ill. 21 (1874); 19 N. W. (Mich.) 179 (1884).

THE LAW OF COMMERCIAL PAPER

(PART 2)

NEGOTIATION OF INSTRUMENTS

DEFINITIONS

NEGOTIATION

1. The act by which an instrument is put into circulation, passing from one to another, is called negotiation. To negotiate a bill, note, or check, or other instrument is to transfer it for value in the way of business. An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder thereof. If payable to bearer, it is negotiated by delivery; if payable to order, it is negotiated by the indorsement of the holder, completed by delivery.'

The term negotiable, in its enlarged signification, applies to any written security that may be transferred from one person to another by delivery, or by indorsement and delivery, so as to vest the transferee or indorsee with the legal title to the instrument and thus enable him to maintain a suit thereon in his own name. In the latter sense, a bond is negotiable;' so, also, are most kinds of commercial instruments.

2. Negotiability is a technical term derived from the usage of merchants and bankers, in transferring, primarily, bills of exchange, and, afterwards, promissory notes.

1 Eng. B. of E. Act, Sec. 31; N. Y. N. I. L., Sec. 60.

2 15 Mo. 342 (1851).

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