Utility. valent to specie, enlarging the capital stock of wealth in circulation, General and thereby facilitating and increasing the trade and commerce of the nature and country. The trader whose capital may not be sufficient to enable him to pay ready money for the commodity which he purchases, on account of his not having the means of immediately obtaining payment of the debts due to him from others, and who might find a difficulty on his own individual security, to purchase goods, or obtain money for the purposes of his trade, by drawing a bill on one of his debtors payable at a future period, may obtain the goods on money on the credit of such bill; the vendor of the goods, to whom the bill is handed as a security, may also, in his turn, obtain goods or money, in the way of his trade, on the credit of the bill, and the bill may have the same effect in different person's hands, to whom it may be transferred by indorsement or otherwise. This security is preferable to many others of a more formal nature, for each of the parties to a bill, by simply writing his name upon it, either as drawer, acceptor, or indorser, guarantees the due payment of it at maturity, and the consideration in respect of which he became a party to it can be rarely inquired into ; whereas, in the case of a formal guarantee, the Statute against Frauds requires the consideration to be expressed, and other matters of form, which frequently render an intended guarantee wholly inoperative. So with respect to interest, it is a better security than a bond, for when the principal and interest in a bond equal. the amount of the penalty, the interest must thenceforth cease, for the obligor in a bond is not answerable in the whole beyond the amount of the penalty." From the circumstance also of the exposure of the contract to the public eye, there is a stronger stimulus on every party to a bill, to take care that it be duly honoured; whereas punctual payment of a guaranty or bond is not so frequent, and consequently less to be relied on in commerce, where certainty is so essential to the welfare of the merchant. There are, however, some disadvantages accompanying this security, compared with others, and principally, that is in case of the dishonour of the bill by the person on whom it is drawn, the holder must immediately give notice of the non-payment to all the other parties, or he will lose the benefit of his security, whereas in the case of a guaranty, such nice and exact conduct on the part of the creditor is not in general requisite. Again, in case of death, a bill of exchange being a simple contrat, is not entitled to the same priority of payment out of the assets of the deceased as a bond; nor is there the same expeditious or extensive mode of obtaining payment as in case of a bond, warrant of attorney, Statute Staple, or Statute Merchant. » The pernicious effects of a fabricated credit, by the undue use of * Per Eyre, C. J. Gibson v. Minet, 1 Hen. Bla.618. 129 Car. 2 ch. 3. s. 4. Wain v. Walter, 5 East, 10. In this case it was held, that an engagement in writing to pay the debt of a third person at an hour named, in consideration of the creditor suspending proceedings in an action till that time, but which consideration did not appear on the face of the written engagement, was void on that account; but in Ex parte Minet, 14 Ves. 189, and in Ex parte Gardom, 12 Ves. 286. this doctrine was denied; and see La Morris "Hefford v. Alger, 1 Taunt. 220. Wild • Warrington v. Furbor, 8 East, 245. but see Philips v. Astling, 2 Taunt. 206. See these cases, post. P 2 Saund. 70. a. and b. in notes. Utility. General accommodation bills of exchange, drawn out of the ordinary course of nature and trade, have been too much felt to require any observation; the use of them, where there is no real demand subsisting between the different parties, is injurious to the public as well as to the parties concerned in the negotiation ; unless in cases where, from some sudden and unexpected event, a particular branch of commerce may be affected, and the trader unable to bring his commodities to a fair market in time to meet the payments for which he has to provide. In these cases, by the temporary assistance of friends, through the medium of bills of exchange, his credit may be saved, and he may be enabled to hold his goods til some fair opportunity of sale presents itself. The use of fictitious names to bills has not been unfrequent, but this practice is not only censurable, but in some cases punishable criminally." Peculiar The various advantages which commerce derives from the use of bills Properties of exchange, have induced our courts of justice to allow them certain Bills, peculiar privileges in order to give full effect to their utility. These are, of &c. first, that although a bill of exchange is a chose in action, yet it may be assigned so as to vest the legal as well as equitable interest therein, in the indorsee or assignee, and to entitle him to sue thereon in his own name. And secondly, that although a bill of exchange, &c. is not a specialty, but merely a simple contract, yet a sufficient consideration is implied from the nature of the instrument, and its existence, in fact, is rarely necessary to be proved. The first of these privileges is of most essential importance in various points of view, and principally that a release by the drawer to the acceptor, or a set-off or cross demand due from the former to the latter, cannot affect the right of action of the payee or indorsee; because the legal and not the mere equitable interest is vested in such payee or indorsee, and the action is sustainable in his own name; whereas suits upon bonds, and most other choses in action, must be in the name of the original obligee; and though it be apparent that he sues merely as a trustee for another to whom he has assigned his interest, yet a release from him, or a set-off due from him to the obligor, may be an effectual bar to the action. The second of these privileges is also of great importance. In general, an action cannot be supported upon a contract not under seal, without alleging in pleading, and proving on the trial, that the contract was made for a sufficient consideration ; but in the case of bills of exchange, promissory notes, &c. a sufficient consideration is presumed, and the validity of the bill, &c. cannot in general be disputed on account of the want of sufficient consideration, when it is in the hands of a third person who has given value for it. t As it may tend to elucidate the properties of bills of exchange, and other negotiable instruments of that nature, we will shortly examine the doctrine relating to the assignment of choses in action; and the necessity in general for a sufficient consideration to give effect to a contract. Doctrine The first peculiar privilege of a Bill of Exchange is its assignable to the quality, and which is in direct opposition to a very ancient rule of law, assignment the founders of which refused to sanction or give effect to the transfer of choses in action." 9 Per Ld. Eldon, in Ex parte Wilson, 11 Ves. 411. . See post. Bishop v. Young, 2 Bos. & Pul. 79. Bauerman v. Radenius, 7 T. R. 663. "As to the assignment of choses in action in general, see Master v. Miller, 4 T. R. 340. In Williamson v. Thompson, 16 Ves. OF BILLS OF EXCHANGE, &c. assignment 5 of any possibility, right, or any other chose in action (which is defined Doctrine to be a right not reduced into possession,) to a stranger; on the ground as to the that such alienations tended to increase maintenance of litigation, and of choses in afforded means to powerful men to purchase rights of action, and there- action. by enable them to oppress indigent debtors, whose original creditors would not perhaps have sued them. Our ancestors were so anxious to prevent alienation of choses, or rights in action, that we find it enacted by the 32 H. 8. c. 9. (which, it is said, was in affirmance of the common law,) that no person should buy or sell, or by any means obtain any right or title to any manors, lands, tenements, or hereditaments, unless the person contracting to sell, or his ancestor, or they by whom he or they claim the same, had been in possession of the same, or of the reversion or remainder thereof, for the space of one year before the contract and this statute was adjudged to extend to the assignment of a copyhold estate," and of a chattel interest, as a lease for years, of land, whereof the grantor was not in possession. At what time this doctrine, which, it is said, had relation originally only to landed estates, was first adjudged to be equally applicable to the assignment of a mere personal chattel not in possession, it is not easy to decide: it seems, however, to have been so settled at a very early period of our history, as the works of our oldest text writers, and the reports contain numberless observations and cases on the subject. Lord Coke says, that it is one of the maxims of the common law, that no right of action can be transferred, "because, under colour thereof, pretended titles might be granted to great men, whereby right might be trodden down, and the weak oppressed, which the common law forbiddeth." Accordingly we find, that judgment was arrested in an action on a bond conditioned for the performance of articles of agreement, which contained a covenant that the defendant should assign certain bonds to the plaintiff for his own use, on the ground that such condition and covenant amounted to maintenance." And although it was decided, that the king, in respect of his prerogative, might transfer a right of action, yet it was afterwards ruled, that his assignee had no such power. This doctrine, however strictly adhered to in our courts of law, was not adopted by our courts of equity: for though it is said to have been decided on the 11th James 1. that the assignee of a covenant could not sue in a court of equity to enforce performance, because it was against law to assign a covenant, yet that seems to be an insulated case; and no other authority is to be found, where a court of equity has refused to 443. it was held, that the indorsement of an Indian Certificate did not pass the legal interest. In Glynn v. Baker, 13 East, 509. it was held, that an India Bond was not assignable, but this has been since altered by 51 Geo. 3. c. 64. which makes them assignable, and enables the assignee to sue in his own name. * Termes de la ley, tit. Chose in Action. 2 Bla. Com. 442. In other words, "the interest in a contract, which, in case of non-performance, can only be reduced into beneficial possession by an action or suit." * Co. Lit. 214. 265 a. n. 1. 232 b. n. 1. 2 Rol. Ab. 45, 6. Godb. 81. Termes de la ley, tit. Chose in Action. Daniel, 2 Bos, & Pul. 541. Scholey v. 2 Partridge v Strange, Plowd. 88. Doctrine give effect to the assignment of a chose in action, provided such assignas to the ment were made for a sufficient consideration. A court of equity assignment of choses in having it in its power to decree according to the justice of every case, there could have been no danger of maintenance being increased by its given effect to such assignments; we therefore find a great number of cases where decrees have been made in favour of such assignees.1 action. P In courts of law, the equitable interest of the assignee of a chose in action seems to have been recognized as far back as the middle of the last century, when we find it said by one of the judges," that if an assignee of a chose in action, have an equity, that equity should be no exile to the courts of common law." In another case also, the court speak" of an assignment of an apprentice, or an assignment of a bond, as things valid between the parties, and to which they must give their sanction; and an assignment of a chose in action has always been deemed a sufficient consideration for a promise, although the debt assigned was uncertain. So, indeed it was decided, that where the obligee has assigned over a bond, and afterwards become a bankrupt, he might nevertheless bring an action on the bond ; and that in an action upon a bond given to the plaintiff in trust for another, the defendant may set off a debt due from the person beneficially interested, in like manner, as if the action had been brought by the cestui que trust. But though courts of law have gone the length of taking notice of assignments of chose in action, and of giving effect to them, yet in almost every case they have adhered to the formal objection that the action should be brought in the name of the assignor, and not in the name of the assignee; the consequence of which rule is, that the defendant may give in evidence a release, declaration, or admission of the plaintiff on the record, to defeat the action, although it be evident such plaintiff is but a mere trustee for a third person. It has been observed, that the substance of the rule being done away, there can be no use or convenience in preserving the shadow of it; for where a third person is permitted to acquire the interest in a thing, whether he bring the action in his own name or in the name of the assignor, does not seem to effect the question of maintenance. However, in a late case," Lord Kenyon expressed his determination not to sanction the assignment of a chose in action, so as to k Vin. Abr. tit. Maintenance, B. 2 Rol. Abr. 45, 46. Co. Lit. 232. Baldwin v. Rochford, 1 Wils. 229. Wright v. Wright, 1 Ves. 411. 412. Peters v. Soame, 2 Vern. 428. Baldwin v. BilJingsley, id. 540. Crouch v. Martin, id. 595. Cole v. Jones, id. 692. Carteret (Lord) v. Paschel, 3 P. W. 199; and it has lately been decided, that an equitable assignment of a debt may be by parol as well as by deed, Heath v. Hall, 4 Taunt. 326. m In Kingdom ». Jones, 33 Car. 2. Skin. 6, 7. Sir T. Jones, 150. S. C. The King against the Parish of Aickless, 12 Mod. 554. 1 Rol. Abr. 29. Loder v. Cheslyn, Sid. 212. Lewis v. Wallis, Sir. T. Jones, 222. Meredith v. Short, 1 Salk. 25. Banfill v. Leigh, 8 T. R. 571. Israel v. Douglass, 1 Hen. Bla. 239. Moulsdale v. Birchall, 2 Bla. Rep. 820. Winch v. Keeley, 1 T. R. 619. Carpenter v. Marnell, 3 Bos. & Paul. 40. Bottomley v. Brook, and Rudge r. Birch, cited in 1 T. R. 621. and in 4 T. R. 341. sed vid Bauerman v. Radenius, 7 T. R. 663. But the court refused to allow a defendant to set off a bond debt of the plaintiff assigned to him by a third person, to whom and for whose use it was originally given, Wake v. Tinkler, 16 East. 36. Bauerman v. Radenius, 7 T. R. 663. Banfill v. Leigh, 8 T. R. 571. Jones v. Dunlop, id. 596. Offly v. Ward, 1 Lev. 235. Johnson v. Collings, 1 East, 104. et vide Medlicot's case, Sei. Cas. 161. Per Buller, J. in Master v. Miller, 4 T. R. 310. et vide Winch v. Keeley, 1 T. R. 621. Israel v. Douglass, 1 Hen. Bla. 239. and Banfill v. Leigh, 8 T. R. 571. "Johnson v. Collings, 1 East, 104. Whitwell r. Bennett, 3 Bos. & Paul. 559. as to the allow the assignee to sue in his own name.(11) The consequence of this Doctrine doctrine is, that if an instrument which is not assignable at law, so as to assignment pass the legal interest, be indorsed by the person to whom it is payable of choses in to his agent to whom he is indebted generally, without any specific ap-action. propriation, the agent, in case of the death of the principal, will have no legal or equitable interest in the instrument towards satisfaction of his debt, but must restore it to the executor.< Even at the earliest period of our history, the doctrine relating to the assignment of choses in action was found to be too great a clog on commercial intercourse; an exception was therefore soon allowed in favour of mercantile transactions. It was the observation of the learned and elegant commentator on the English laws, that in the infancy of trade, when the bulk of national wealth consisted of real property, our courts did not often condescend to regulate personalty; but, as the advantages arising from commerce were gradually felt, they were anxious to encourage it by removing the restrictions by which the transfer of interests in it was bound. On this ground, the custom of merchants, whereby a foreign bill of exchange is assignable by the payee to a third person, so as to vest in him the legal as well as equitable interest therein, was recognised and supported by our courts of justice in the fourteenth century; and the custom of merchants, rendering an inland bill transferrable, was established in the seventeenth century. In short, our courts, anxiously attending to the interests of the community, have, in favour * Williamson v. Thompson, 16 Ves. 443. (11) Courts of law now take notice of assignments of choses in action, and afford them every protection not inconsistent with the principles and proceedings of tribunals acting according to the course of the common law. They endeavour in these respects to apply, as far as may properly be done, the rules and doctrines recognised in Courts of Equity. They will not therefore give effect to a release procured by the original debtor under a covenous combination with the assignor in fraud of his assignee; nor permit the assignor injuriously to interfere with the conduct of any suit commenced by the assignee to enforce the rights, which passed under the assignment. Welsh v. Manderville, 1 Wheaton, 233. See, as to the right of the United States to sue in their own name upon a bill indorsed to their agent, Dugan v. United States, 3 Wheaton, 172. See also Skelding et al. v. Warren, 15 Johns. 270. Upon these principles a release procured after a notice of the assignment has been held to be a nullity. Andrews v. Beecher, 1 John. Cas. 411. Littlefield v. Storey, 3 John. Rep. 426. Legh v. Legh, 1 Bos. & Pull. 447. Raymond v. Squire, 11 John. Rep. 47. So a satisfaction of a judgment entered up by the assignor after the assignment has been vacated. Wardell v. Eden, 2 John. Cas. 121. 258. S. C. 1 John. Rep. 531. note. So a dismissal of a suit or a retraxit entered up without the consent of the assignee will be no bar to a subsequent suit. Welsh v. Mandeville, ut supra. And if the fact of the assignment be known to the court, it will not suffer the defendant, whose name is used, to discontinue the suit without the agreement of the assignee. M'Cullum v. Coxe, 1 Dall. Rep. 139. There are many other cases in which the rights of the assignee have been recognised and enforced in suits at law; but it is foreign to the purposes of this note to give them a minute analysis. The reader will receive further information on the subject by consulting the subjoined cases. Perkins v. Parker, 1 Mass. Rep. 117. Wakefield v. Martin, 3 Mass. Rep. 558. Dix v. Cobb, 4 Mass. Rep. 508. Dawes v. Boylston, 9 Mass. Rep. 337. Crocker v. Whitney, 10 Mass. Rep. 316. Wood v. Partridge, 11 Mass. Rep. 488. Alner v. George, 1 Camp. N. P. 392. Tuttle v. Beebee, 8 John. Rep. 152. Meghan v. Mills, 9 John. Rep. 64. Brisban v. Caines, 10 John. Rep. 45. Inglis v. Inglis's Executors, 2 Dall. Rep. 45. Roussett v. The Insurance Company of North America, 1 Binn. 429. Woodbridge v. Perkins, 3 Day's Rep. 564. Da Costa v. Shrewsbury, 1 Bay's Rep. 211. Administrators of Compty v. Alken, 2 Bay's Rep. 481. Raymond v. Squire, 11 John. Rep. 488. Anderson v. Van Allen, 12 John. Rep. 843. Mowry v. Todd, 12 Mass. Rep. 281. Jones v. Witter, 13 Mass. Rep. 304. Bowman v. Wood, 15 Mass. Rep. 531. Martin v. Hawkes, 15 Johns. 405. |