by the same statute 3 & 4 Anne, c. 9, are made assignable and endorsable in like manner as bills of exchange. But, by statute 15 Geo. III. c. 51, all promissory or other notes, *bills of exchange, drafts, and undertakings in writing, *468] being negotiable or transferable, for the payment of less than twenty shillings, are declared to be null and void; and it is made penal to utter or publish any such; they being deemed prejudicial to trade and public credit. And by 17 Geo. III. c. 30, all such notes, bills, drafts, and undertakings, to the amount of twenty shillings, and less than five pounds, are subjected to many other regulations and formalities; the omission of any one of which vacates the security, and is penal to him that utters it. 28

The payee, we may observe, either of a bill of exchange or promissory note, has clearly a property vested in him (not indeed in possession, but in action) by the express contract of the drawer in the case of a promissory note, and, in the case of a bill of exchange, by his implied contract, viz., that, provided the drawee does not pay the bill, the drawer will: for which reason it is usual in bills of exchange to express that the value thereof hath been received by the drawer;(u) in order to show the consideration upon which the implied contract of repayment arises. And this property, so vested, may be transferred and assigned from the payee to any other man; contrary to the general rule of the common law, that no chose in action is assignable: which assignment is the life of paper credit. It may therefore be of some use to mention a few of the principal incidents attending this transfer or assignment in order to make it regular, and thereby to charge the drawer with the payment of the debt to other persons than those with whom he originally contracted.

In the first place, then, the payee, or person to whom or whose order such bill of exchange or promissory note is payable, may by endorsement, or writing his name in dorso, or on the back of it, assign over his whole property to the bearer, or else to another person by name, either of whom is then called the endorsee; and he may assign the same to another, and so on in infinitum. And a promissory note, payable to A. or bearer, is negotiable without any endorsement, and be demanded by any bearer *of it.(v) payment thereof may But in *469] case of a bill of exchange, the payee, or the endorsee, (whether it be a general or particular endorsement,) is to go to the drawee, and offer his bill for acceptance; which acceptance (so as to charge the drawer with costs) must be in writing, under or on the back of the bill. If the drawee accepts the bill, either verbally or in writing, (w) he then makes himself liable to pay it; this being now a contract on his side, grounded on an acknowledgment that the drawer has effects in his hands, or at least credit, sufficient to warrant the payment. If the drawee refuses to accept the bill, and it be of the value of 207. or upwards, and expressed to be for value received," the payee or endorsee may protest it for non-acceptance; which protest must be made in writing, under a copy of such bill of exchange, by some notary public; or, if no such notary be resident in the place, then by any other substantial inhabitant, in the presence

(*) Stra. 1212.

(*) 2 Show. 235. Grant vs. Vaughan. T. 4 Geo. II. B. R.

(w) Stra. 1000.

28 By the statute of 7 Geo. IV. c. 6, the issuing of promissory notes for any sum under 57. is prohibited, under a penalty of 207. for every such note issued.-CHITTY.

29 No authority is cited by the learned commentator for the qualification here ex pressed; and I have been unable to trace it. I can find no statute which confines a protest for non-acceptance to bills of the value of 201. and upward and expressed to be for value received. Bills for the payment of less than 20s. are void by statute 15 Geo. III. c. 51. I have supposed that this was a mistake of pounds for shillings; but every edition has it 20%. Again, although some advantages were formerly held to arise from a bill or note being expressed to be for value received, such as that it was necessary to raise the presumption of value, or estopped the maker from denying consideration,yet all distinctions of that character are now exploded; and all the incidents of negotiable paper attach as fully to bills and notes which are not, as to those which are, expressed to be for value received. White vs. Ledwick, 4 Doug. 427. Grant vs. Da Costa, 3 M. & 8. 351. Benjamin vs. Fillman, 2 McLean, 213. Townsend vs. Derby, 3 Metcalf, 365. [ubble vs. Fogartie, 3 Rich. 413.—SHARSWOOD.

of two credible witnesses; and notice of such protest must, within fourteen days after, be given to the drawer.30

But, in case such bill be accepted by the drawee, and after acceptance he fails or refuses to pay it within three days after it becomes due, (which three days are called days of grace,) the payee or endorsee is then to get it protested for non-payment, in the same manner, and by the same persons who are to protest it in case of non-acceptance; and such protest must also be notified, within fourteen days after, to the drawer. And he, on producing such protest, either of non-acceptance or non-payment, is bound to make good to the payee, or endorsee, not only the amount of the said bills, (which he is bound to do within a reasonable time after non-payment, without any protest, by the rules of the common law,)(x) but also interest and all charges, to be computed from the time of making such protest. But if no protest be made or notified to the drawer, and any damage accrues by such neglect, it shall fall on the holder of the bill. The bill, when refused, must be demanded of the drawer as soon as conveniently may be for though, when one draws a bill of *exchange, he subjects him[*470 self to the payment if the person on whom it is drawn refuses either to accept or pay, yet that is with this limitation, that if the bill be not paid when due, the person to whom it is payable shall in convenient time give the drawer notice thereof; for otherwise the law will imply it paid: since it would be prejudicial to commerce if a bill might rise up to charge the drawer at any distance of time: when in the mean time all reckonings and accounts may be adjusted between the drawer and the drawee.(y)

:

If the bill be an endorsed bill, and the endorsee cannot get the drawce to discharge it, he may call upon either the drawer or the endorser, or, if the bill has been negotiated through many hands, upon any of the endorsers; for each endorser is a warrantor for the payment of the bill, which is frequently taken in payment as much (or more) upon the credit of the endorser as of the drawer. And if such endorser, so called upon, has the names of one or more endorsers prior to his own, to each of whom he is properly an endorsee, he is also at liberty to call upon any of them to make him satisfaction; and so upwards. But the first endorser has nobody to resort to but the drawer only."

What has been said of bills of exchange is applicable also to promissory notes, that are endorsed over, and negotiated from one hand to another; only that in this case, as there is no drawee, there can be no protest for non-acceptance; or rather, the law considers a promissory note in the light of a bill drawn by a man upon himself, and accepted at the time of drawing. And, in case of non

30 With respect to acceptance and protest, the law now is, in several material points, different from the statement of it in the text. Acceptance is not necessary, though usual and desirable, on bills payable at a certain time; but when the bill is payable at a certain distance of time after sight, then acceptance is essential and should not be delayed, because (as the time for payment of the bill does not begin to run till it is accepted, 6 T. R. 212. Bayl. 112. Chitty on Bills, 268) the responsibility of the drawer would be thereby protracted. Acceptance of an inland bill can now be in writing only on the face of the bill itself, (by 1 & 2 Geo. IV. c. 78;) though formerly, as is still the case with foreign bills, it might have been verbal, or in writing on any other paper. 4 East, 67. 5 East, 514. But in all cases, whether of an inland or foreign bill, if it be presented and ac ceptance is refused, prompt notice (within fourteen days will not suffice, but usually the next day to the immediate endorser; and each endorser is allowed & day) must be given to the drawer and endorsers, or they will be discharged from responsibility. Upon non-acceptance, the holder may immediately sue the drawer (2 Camp. 458) and endorsers, (4 East, 481,) without waiting till the bill become due, according to the terms of it. No protest of an inland bill is essential to entitle the holder to recover interest and costs; and such protest now seems useless. 2 B. & A. 696.-CHITTY.

31 The holder of the bill may bring actions against the acceptor, drawer, and all the endorsers, at the same time. But, though he may obtain judgments in all the actions, yet he can recover but one satisfaction for the value of the bill. But he may sue out execution against all the rest for the costs of their respective actions. Bayley, 43.— CHRISTIAN.

payment by the drawer, the several endorsees of the promissory note have tho same remedy, as upon bills of exchange, against the prior endorsers.

CHAPTER XXXI.

OF TITLE BY BANKRUPTCY.

THE preceding chapter having treated pretty largely of the acquisition of personal property by several commercial methods, we from thence shall be easily fed to take into our present consideration a tenth method of transferring property, which is that of

X. Bankruptcy; a title which we before lightly touched upon,(a) so far as it related to the transfer of the real estate of the bankrupt. At present we are to treat of it more minutely, as it principally relates to the disposition of chattels, in which the property of persons concerned in trade more usually consists, than in lands or tenements. Let us, therefore, first of all consider, 1. Who may become a bankrupt: 2. What acts make a bankrupt: 3. The proceedings on a commission of bankrupt: and, 4. In what manner an estate in goods and chattels may be transferred by bankruptcy.

1. Who may become a bankrupt. A bankrupt was before(b) defined to be "a trader, who secretes himself, or does certain other acts, tending to defraud his creditors." He was formerly considered merely in the light of a criminal or offender; (c) and in this spirit we are told by Sir Edward Coke,(d) that we have *472] fetched as well the name, as the wickedness, *of bankrupts from foreign nations.(e) But at present the laws of bankruptcy are considered as laws calculated for the benefit of trade, and founded on the principles of humanity as well as justice; and to that end they confer some privileges, not only on the creditors, but also on the bankrupt or debtor himself. On the creditors, by compelling the bankrupt to give up all his effects to their use, without any fraudulent concealment: on the debtor, by exempting him from the rigour of the general law, whereby his person might be confined at the discretion of his creditor, though in reality he has nothing to satisfy the debt: whereas the law of bankrupts, taking into consideration the sudden and unavoidable accidents to which men in trade are liable, has given them the liberty of their persons, and some pecuniary emoluments, upon condition they surrender up their whole estate to be divided among their creditors.

In this respect our legislature seems to have attended to the example of the Roman law. I mean not the terrible law of the twelve tables; whereby the creditors might cut the debtor's body into pieces, and each of them take his proportionable share: if, indeed, that law, de debitore in partes secando, is to be understood in so very butcherly a light; which many learned men have with reason doubted.(f) Nor do I mean those less inhuman laws, (if they may be called so, as their meaning is indisputably certain,) of imprisoning the debtor's person in chains; subjecting him to stripes and hard labour, at the mercy of his rigid creditors; and sometimes selling him, his wife and children, to perpetual foreign slavery trans Tiberim: (g) an oppression which produced so many But I mean *popular insurrections, and secessions to the mons sacer. *473] the law of cession, introduced by the Christian emperors; whereby, if a

See page 285.

Ibid.

Stat. 1 Jac. I. c. 15, 17.

4 Inst. 277.

() The word itself is derived from the word bancus or banque, which signifies the table or counter of a tradesman, (Dufresne, i. 969,) and ruptus, broken,-denoting thereby one whose shop or place of trade is broken and gone; though others choose to adopt the word route, which in French sigcifies a trace or track, and tell us that a bankrupt is one ho hath removed his banque, leaving but a trace behind. 4 Inst. 277. And it is observable that the title of the first

English statute concerning this offence, (34 Hen. VIII. c. 4,) "against such persons as do make bankrupt," is a literal translation of the French idiom, qui font banque route.

() Taylor, Comment. in L. Decemviral. Bynkersh. Observ. Jur. I. 1. Heinecc. Antiq. iii. 30, 4.

(9) In Pegu and the adjacent countries in East India, the creditor is entitled to dispose of the debtor himself, and like wise of his wife and children; insomuch that he may even violate with impunity the chastity of the debtor's wife; bui then, by so doing, the debt is understood to be discharged. Mod. Un. Hist. vii. 128.

debtor ceded, or yielded up, all his fortune to his creditors, ne was secured from being dragged to a gaol, "omni quoque corporali cruciatu semoto."(h) For, as the emperor justly observes, (i) "inhumanum erat spoliatum fortunis suis in solidum damnari." Thus far was just and reasonable; but, as the departing from one extreme is apt to produce its opposite, we find it afterwards enacted,(k) that, if the debtor by any unforeseen accident was reduced to low circumstances, and would swear that he had not sufficient left to pay his debts, he should not be compelled to cede or give up even that which he had in his possession: a law which, under a false notion of humanity, seems to be fertile of perjury, injustice, and absurdity.

The laws of England, more wisely, have steered in the middle between both extremes: providing at once against the inhumanity of the creditor, who is not suffered to confine an honest bankrupt after his effects are delivered up; and at the same time taking care that all his just debts shall be paid, so far as the effects will extend. But still they are cautious of encouraging prodigality and extravagance by this indulgence to debtors; and therefore they allow the benefit of the laws of bankruptcy to none but actual traders; since that set of men are, generally speaking, the only persons liable to accidental losses, and to an inability of paying their debts, without any fault of their own. If persons in other situations of life run in debt without the power of payment, they must take the consequences of their own indiscretion, even though they meet with sudden accidents that may reduce their fortunes: for the law holds it to be an unjustifiable practice for any person but a trader to encumber himself with debts of any considerable value. If a gentleman, or *one in a liberal profession, at [*474 the time of contracting his debts, has a sufficient fund to pay them, the delay of payment is a species of dishonesty, and a temporary injustice to his creditor: and if at such time he has no sufficient fund, the dishonesty and injustice is the greater. He cannot therefore murmur, if he suffers the punishment which he has voluntarily drawn upon himself. But in mercantile transactions the case is far otherwise. (Trade cannot be carried on without mutual credit on both sides: the contracting of debts is therefore here not only justifiable, but necessary. And if by accidental calamities, as, by the loss of a ship in a tempest, the failure of brother traders, or by the non-payment of persons out of trade, a merchant or trader becomes incapable of discharging his own debts, it is his misfortuno and not his fault. To the misfortunes, therefore, of debtors, the law has given a compassionate remedy, but denied it to their faults; since, at the same time that it provides for the security of commerce, by enacting that every considerable trader may be declared a bankrupt, for the benefit of his creditors as well as himself, it has also (to discourage extravagance) declared that no one shall be capable of being made a bankrupt, but only a trader; nor capable of receiving the full benefit of the statutes, but only an industrious trader.

The first statute made concerning any English bankrupts was 34 Hen. VIII. c. 4, when trade began first to be properly cultivated in England: which has been almost totally altered by statute 13 Eliz. c. 7, whereby bankruptcy is confined to such persons only as have used the trade of merchandise, in gross or by retail, by way of bargaining, exchange, rechange, bartering, chevisance,() or otherwise; or have sought their living by buying and selling. And by statute 21 Jac. I. c. 19, persons using the trade or profession of a scrivener, receiving other men's moneys and estates into their trust and custody, are also made liable to the statutes of bankruptcy: and the benefits, as well as the penal parts, [*475 of the law, are *extended as well to aliens and denizens as to natural-born subjects; being intended entirely for the protection of trade, in which aliens are often as deeply concerned as natives. By many subsequent statutes, but lastly by statute 5 Geo. II. c. 30,(m) bankers, brokers, and factors are declared liable to the statutes of bankruptcy; and this upon the same reason that scriveners are included by the statute of James I., viz., for the relief of their cre

(That is, making contracts. Dufresne, ii. 569.
(*) 33.

ditors; whom they have otherwise more opportunities of defrauding than any other set of dealers; and they are properly to be looked upon as traders, since they make merchandise of money, in the same manner as other merchants do of goods and other movable chattels. But by the same act,(n) no farmer, grazier, or drover, shall (as such) be liable to be deemed a bankrupt: for, though they buy and sell corn, and hay, and beasts, in the course of husbandry, yet trade is not their principal, but only a collateral, object; their chief concern being to manure and till the ground, and make the best advantage of its produce. And, besides, the subjecting them to the laws of bankruptcy might be a means of defeating their landlords of the security which the law has given them above all others, for the payment of their reserved rents; wherefore, also, upon a similar reason, a receiver of the king's taxes is not capable,(o) as such, of being a bankrupt; lest the king should be defeated of those extensive remedies against his debtors which are put into his hands by the prerogative. By the same statute,(p) no person shall have a commission of bankrupt awarded against him, unless at the petition of some one creditor, to whom he owes 1007.; or of two, to whom he is indebted 1507.; or of more, to whom altogether he is indebted 2007. For the law does not look upon persons whose debts amount to less, to be traders considerable enough, either to enjoy the benefit of the statutes themselves, or to entitle the creditors, for the benefit of public commerce, to demand the distribution of their effects.1

*476] *In the interpretation of these several statutes, it hath been held, that buying only, or selling only, will not qualify a man to be a bankrupt; but it must be both buying and selling, and also getting a livelihood by it. As, by exercising the calling of a merchant, a grocer, a mercer, or, in one general word, a chapman, who is one that buys and sells any thing. But no handicraft

2

(*) 240.

(•) Ibid.

(P) 32.

But all these statutes have been superseded by the Bankrupt Law Consolidation Act, 1849, (12 & 13 Vict. c. 106,) by which all previous acts are repealed; and by sect. 65 it is enacted that all alum-makers, apothecaries, auctioneers, bankers, bleachers, brokers, brickmakers, builders, calenderers, carpenters, carriers, cattle or sheep salesmen, coachproprietors, cow-keepers, and persons using the trade or profession of a scrivener, receiving other men's moneys or estates into their trust or custody, and persons insuring ships or their freight, or other matters, against peril of the sea, warehousemen, wharfingers, packers, builders, carpenters, shipwrights, victuallers, keepers of inns, taverns, hotels, or coffee-houses, dyers, printers, fullers, and all persons using the trade of merchandise by way of bargaining, exchange, commission, consignment, or otherwise, in gross or by retail, all persons who, either for themselves or as agents or factors for others, seek their living by buying and selling, or by buying and letting for hire, or by the workmanship of goods or commodities, and some others expressly mentioned in the section, shall be deemed liable to become bankrupt; provided that no farmer, grazier, common labourer or workman for hire, receiver-general of the taxes, or member of or subscriber to any incorporate, commercial, or trading companies established by charter or act of parliament, shall be deemed, as such, a trader, liable by virtue of this act to become bankrupts.-STEWART.

By the act of Congress August 19, 1841, (5 Story, 2829,) there were two classes of bankrupts. First, those who became so upon their voluntary petition; and this class comprehended all persons whatsoever residing in any State, District, or Territory of the United States owing debts, which shall not have been created in consequence of a de falcation as a public officer, or as executor, administrator, guardian, or trustee, or while acting in any other fiduciary capacity. Second, persons declared bankrupts upon the petition of one or more of their creditors, to whom they owe debts amounting in the whole to not less than five hundred dollars; and this class comprehended all persons being merchants or using the trade of merchandise, all retailers of merchandise, and all bankers, factors, brokers, underwriters, or marine insurers, owing debts of not less than two thousand dollars. This act was repealed by the act of March 3, 1843, (5 Story, 2978,) with a proviso that the repeal should not affect any case or proceeding in bankruptcy commenced before the passage of the repeal, or any pains, penalties, or forfeitures incurred under the original act, but every such proceeding may be continued to its final consummation.-SHARSWOOD.

2 It has been long held that if the affidavit of debt term the debtor a “dealer and chapman," that is a sufficient description of trading to support a commission of bankriptcy; and a general statement in the commission that the bankrupt "got his living