§1. The inventive spirit of modern finance and commerce has thrown into circulation a new species of security which is daily becoming more popular and important. We allude to bonds issued by corporations, payable to the holder or to bearer, and to the coupons attached, also payable to holder or bearer.

These securities have been recognized as negotiable by the supreme tribunals of many States of the Union, including Virginia, Connecticut, Iowa, New York, New Jersey, Illinois, Massachusetts, Mississippi, Missouri, Indiana and Wisconsin. Arents vs. Commonwealth, 18 Grat., 773; Society for Savings vs. City of New London, 29 Conn., 174; Clapp vs. County of Cedar, 5 Clarke, 15; Conn. Mutual Life Insurance Co. vs. Cleveland &c., R. R. Co., 41 Barb., 9; Morris Canal & Banking Co. vs. Fisher, 1 Stock., 667; Johnson vs. County of Stark, 24 Ill., 75; Chapin vs. Vt. & Mass. R. R., 8 Gray, 575; Craig vs. City of Vicksburg, 31 Miss., 216; Railway vs. Cleneay, 13 Ind., 161; Clark vs. Janesville, 10 Wis., 136; Mills vs. Jefferson, 20 Wis., 50; Barrett vs. County Court, 44 Missouri, 197. And they have been established upon a firm commercial footing by a series of decisions of the Supreme Court of the United States. Aurora City vs. West, 7 Wallace, 82, White vs. Vermont & Mass. R. R. Co., 21 Howard, 575; Moran vs. Commissioners of Miami County, 2 Black, 722 Mercer County vs. Hacket, 1 Wallace, 83; Gelpecke vs. City of DubuVOL. I.-NO. 11.-2.

que, Id., 175; Thomas vs. Lee County, 3 Wallace, 227; Murray vs. Lardner, 1 Wallace, 110; Meyer vs. Muscatine, 1 Wallace, 382: Supervisors vs. Schenck, 5 Wallace, 772.

In the case of Mercer County vs. Hacket, 1 Wallace, 83, which went up from Pennsylvania, the obligatory part of the bonds ran: "Know all men by these presents, that the county of Mercer, in the Commonwealth of Pennsylvania, is indebted to the Pittsburg & Erie Railroad Company in the full and just sum of $1,000, which sum of money said county agrees and promises to pay twenty years after the date hereof to the said Pittsburg & Erie Railroad Company, or bearer, with interest at the rate of six per centum per annum, payable semiannually, &c.," and was signed under the corporate seal of the county.

The court sustained their negotiability, and said Grier, J.: "This species of bonds is a modern invention, intended to pass by manual delivery; and their value depends mainly upon this character. Being issued by States and Corporations, they are necessarily under seol. But there is nothing immoral or contrary to good policy in making them negotiable, if the necessities of commerce require that they should be so. A mere technical dogma of the courts or the Common Law, can not prohibit the commercial world from inventing, or using any species of security not known in the last century. Usage of trade and Commerce are acknowledged by courts as part of the Common Law, although they may have been unknown to Bracton or Blackstone; and this malleability to suit the necessities and usages of the mercantile and commercial world, is one of the most valuable characteristics of the Common Law. When a corporation covenants to pay to bearer, and gives a bond with negotiable qualities, and by this means obtains funds for the useful enterprises of the day, it can not be allowed to evade the payment by parading some obsolete judicial decision that a bond for some technical reason, can not be made payable to bearer." The single case referred to, to the contrary of this doctrine, was Diamond vs. Lawrence, 37 Penn. State R., 353, which the Supreme Court entirely repudiated.

Bonds of corporations payable to "A or his assign," and assigned by A in blank, are transferable, by delivery, Brainard vs. New York & Harlem Railroad Co., 10 Bosw., 832; 25 N. Y. R., 496.

$2. For the sake of convenience, and to facilitate the collection of he interest due on the bond, the coupons are furnished and

attached to it, as evidence of successive periodical liabilities. They are the evidence of title to demand the interest; they may be separated from the bond and negotiated apart from it; and they serve the purpose of vouchers when the money is paid upon them. But the contract for the payment of interest is in the bond. So intimate is the relation of the coupon to the bond, that Legislative authority to a corporation to issue bonds implies authority to attach coupons to them for the interest. Arents vs. Commonwealth, 18 Grat., 750.

§3. It is obvious from the nature and purpose of coupons, that, unlike bank-notes, they are not intended for indefinite circulation. The bank-note is issued for indefinite circulation, and the longer it circulates the better for the bank; but the coupon, though it may circulate after date of payment like a bill or note, and will pass by delivery, yet this purpose was not contemplated in its issue. The general principles applicable to other species of commercial paper are therefore applicable to them. They are payable on the day fixed for payment, and not on demand.

It was argued in Arents vs. Commonwealth, 18 Grat., 775, where the coupons ran "Duncan, Sherman & Co., of New York, will pay the bearer thirty dollars, the half yearly interest on the Wheeling bond, 269, due 1 January, 1867," that they must be regarded as payable on demand on or after the day specified, and not on that day, because the bond provides that the interest shall be paid by Duncan, Sherman & Co., "on presenting" to them the proper coupons. But the Court of Appeals held otherwise, and said Joynes, J., “sometimes the form of expressions, in such bonds is, that the coupons shall be 'surrendered,' or 'delivered.' But the meaning is the same, whether the coupon is to be 'presented,' 'surrendered,' or 'delivered'. The coupon passes by delivery, and is evidence of the title of the holder to demand the interest. This evidence of title must be produced before the money it calls for can be demanded, and it must be surrendered when the money is paid. This is just what the law requires of every holder of a negotiable securety and no more. But can it be said that a bill of exchange or promissory note, payable on a specified day, or so many days after date, is not payable on a day certain, because payment can not be maintained without a presentment or surrender of the note?

"I conclude, therefore, that these coupons are negotiable instruments, payable at a day certain; namely, the day mentioned in each,

as the day the interest called for by the coupon is payable, though the holder was not bound to present them for payment on that day, so as to save the liability of the city, (the principal obligor,) or of the State, (the guarantor.)"

$4. In Arents vs. Commonwealth, 18 Grat., 775, negotiable coupons were distinguished from bills of exchange, in several particulars:

1. They are not intended for acceptance.

2. They are not entitled to grace.

3. They are drawn on bankers, and against funds deposited with them, if they are drafts at all, and are therefore checks, rather than bills, in the strict and proper sense.

4. To regard them as bills would make them import a contract varying from that in the bond, and impose a degree of diligence on the holder not in conformity with the general understanding and usage in respect to coupons.

§5. It is not material in what terms the coupon is expressed, so that it answers the purposes heretofore indicated. Sometimes they contain words of promise, making them substantially Promissory Notes in themselves. Thus in Thompson vs. Lee County, 3 Wallace, 327, the form was: "Promise to pay to the bearer, at the Continental Bank, in the city of New York, forty dollars interest on bond No. Sometimes they are in the form of a bill of exchange, or draft upon the Treasury of the corporation issuing them. Thus, in Moran vs. Commissioners of Miami County, 2 Black., 722, the form was: "The treasurer of said county will pay the legal holder hereof one hundred dollars on the 1st day of September, 1857, on presentation thereof, being for interest due on the obligation of said county, No. 16, given to the Peru & Indianapolis Railroad Company." Sometimes they are in the form of a mere ticket, or token or "Interest Warrant," as it is called. Thus, in Woods vs. Lawrence County, 1 Black, U. S. R., 360, the coupon is in this form: "County of Lawrence-Warrant No.-, for thirty dollars, being for six months' interest on bond No.-, payable on the -- day of- at the office of the Pennsylvania Railroad Company, in the city of Philadelphia.”

Sometimes they are in the form of a check upon a banking house, as in Arents vs. Commonwealth, 18 Grat., 753, where the form was: "Duncan, Sherman & Co., of New York, will pay the bearer thirty dollars, the half-yearly interest on the Wheeling bond due 1 Janu