Brief of Defendants in Error.

forty-nine dollars, and promising to refund this sum in current funds, should be held so. There can be no objection to this note on the ground of its being payable in current funds.

This brings us to the real question in this case. How do the statutes of this territory, in force at the time this note was given, affect this note? There are two acts of our legislature (Stat. '55, pp. 139 and 155) which bear on this subject, and are to be construed together: the act concerning bonds and notes, and the act concerning bills of exchange and negotiable promissory notes. The third section of the act in relation to bonds and notes provides "that the nature of the defense of the obligor or maker shall not be changed by the assignment, but he may make the same defense against the bond or note in the hands of the assignee that he might have made against the assignor." The second section of this act makes all bonds and promissory notes for money or property assignable.

The fifteenth section of the act concerning bills of exchange and negotiable promissory notes provides as follows: "The payees and indorsees of every such negotiable note, payable to them or order, and the holders of every such note, payable to bearer, may maintain an action for the sums of money therein mentioned, against the makers and indorsers of them respectively, in like manner as in cases of inland bills of exchange, and not otherwise." Both these statutes are taken from the Missouri statutes. The first named act makes certain bonds and notes assignable, and the fifteenth section of the above act makes certain notes negotiable. It creates, like the English statute and the statutes of the various States, a class of mercantile paper. By this section, (Mo. Stat., vol. 1, pp. 295-6 and 319,) to make a note negotiable, it must be made payable to order or bearer. All other notes and bonds fall within the provisions of the act in relation to bonds and notes, and are assignable, but not negotiable.

[*33] To understand our legislature on this subject, we must look at the statutes of Missouri, from which our statutes were copied, with some omissions. The Missouri statute in relation to bonds and notes is the same as ours. (Vol. 1, p. 319.) The legislature of this territory, in adopting the Mis

COURT OF KANSAS

. Northup & Chick

souri statute in relation to bills and negotiable promissory notes, omitted the fifteenth section, (vol. 1, pp. 295-6,) which provides that every promissory note for the payment of money, expressed on the face thereof to be for value received, negotiable and payable without defalcation, shall be due and payable as therein expressed, and shall have the same effect and be negotiable in like manner as inland bills of exchange. This section of the Missouri statute created a class of commercial paper in that state unknown in the commercial world, and unknown in any other state of this union. Our legislature, therefore, wisely omitted this section of the Missouri statute, but adopted the sixteenth section thereof, which is the fifteenth section above quoted of our act. In adopting this section of the Missouri statute, the legislature omitted to strike out the word "such," which refers to the preceding section in the Missouri act not adopted by our legislature. In reading the fifteenth section then, the word such is to be omitted. It has no antecedent to refer to. (See State v. Beasley, 5 Mo. 91.)

The law, then, in this territory, in regard to notes, is the same as in the other states, except Missouri. A note, payable to bearer or order, is negotiable, and is placed on the same footing of inland bills of exchange. All other notes come under the provisions of the act in relation to bonds and notes, and are assignable, but not negotiable. By this construction, force and effect are given to the fifteenth section of the act in relation to bills and negotiable notes, and also to the act in relation to bonds and notes. The construction contended for on the other side, gives no force whatever to the fifteenth section of the above act. [*34] The proper construction makes these two acts harmonious, by making them act on different classes of paper.

The opinion of the court was delivered by

BAILEY, J.: Petition in error to reverse the judgment of the United States district court for the second judicial district of Kansas territory, sitting in the county of Douglas for the trial of causes arising under the laws of said territory, at the October Term, 1859. The original action was brought by the

Opinion of the Court.

defendants in error in the court below upon the following certificate or memorandum in writing, viz.:

"$649.79. Received, Lawrence, May 29, 1857, of Wilson Bennett, six hundred and forty-nine and seventy-nine onehundredth dollars, payable to his order, on return of this certificate, in current funds. J. BLOOD."

On the back of which was the following indorsement, viz.: "Pay Northup & Chick. WILSON BENNETT."

The petition of plaintiffs (defendants in error) in the court below is in common form, setting forth the execution and delivery of the writing declared on, on the day of its date, by defendant to the payee, Wilson Bennett, and its subsequent indorsement and delivery by said Bennett on the same day to the plaintiffs, for the consideration expressed on its face, presentation and demand of payment by plaintiffs and refusal by defendant.

In their answer, the defendant (plaintiff in error) sets up two pleas as a defense to the action, to wit:

First. That defendant Blood purchased of a person calling himself Wilson Bennett a draft, drawn by A. A. Tucker & Co., of Chicago, upon J. J. Anderson & Co., of St. Louis, payable to one Nathaniel Miller or order, for nine hundred dollars, and paid to said Bennett two hundred and fifty dollars and twenty-one cents in cash, and gave him the writing declared on for the balance. [*35] That the draft so purchased of Bennett by defendant was an altered or forged draft, having been altered from a draft for one hundred dollars to a draft for nine hundred dollars, and that said draft was refused payment by the drawers, on the ground of forgery. That the writing declared on by plaintiffs is not negotiable, and that defendant can avail himself of the same defense against plaintiffs that he would have had as against Bennett.

The second plea denies the indorsement and delivery of the writing or certificate declared on, by said Bennett to plaintiffs, alleged in plaintiffs' petition.

To the first plea, the plaintiffs below demurred and the court sustained the demurrer.

The issue joined on the second plea was submitted to a jury, who returned a verdict for the plaintiffs, assessing the

KAN

Blood v. Northup & Chick.

damages at seven hundred and forty-eight dollars and eightynine cents, for which the court rendered judgment.

The errors complained of are two, viz.: First. That the court erred in refusing the instructions to the jury prayed for by defendant's counsel. Second. That the court erred in sustaining the demurrer.

With regard to the first assignment of error, it is only necessary to remark that the record does not show that any instructions to the jury were requested to be given on the trial. The only question to be considered, therefore, would seem to be the ruling of the court below, in sustaining the demurrer.

In considering this question, it may be proper first to determine the legal character of the writing declared on, and we find no difficulty in reaching the conclusion that it is to be regarded as a promissory note. "A promissory note, or, as it is frequently called, a note of hand, is an absolute promise in writing, signed but not sealed, to pay a specified sum at a time therein limited, or on demand, [*36] or at sight, to a person therein named, or to his order, or to the bearer." (Byles on Bills, p. 4.) "An acknowledgment of indebtedness in writing, in a specific sum, for a valuable consideration, raises a promise to pay, and is, in law, a note." (Finley v. Shirley et al., 7 Mo. 42.)

The writing declared on is, in its terms, payable to Wilson Bennett or his order, in "current funds;" and it may well be questioned whether such a note can be deemed negotiable. On this point the authorities are numerous and somewhat conflicting. In England, it has been held that, to be negotiable, a note must be for money in specie, and therefore a promise to pay in "Bank of England notes" is not a promissory note. (Byles on Bills, 171 [70] and cases cited.) So a note, payable in current funds or "New York" funds, held not negotiable. (Hasbrouck v. Palmer, 2 McLean, 10.) So, in Missouri, a bill drawn payable in currency, was held to be not a bill of exchange. (Farwell et al. v. Kennet et al., 7 Mo. 595.) So a note for a sum certain, payable to A. or order in "foreign bills," (meaning, thereby, bills of country banks,) held not to be a good promissory note within the statute, and not

Opinion of the Court.

negotiable. (Jones v. Fales, 4 Mass. 245.) So in New York a note, payable in New York or Pennsylvania paper currency, to be current in the state of Pennsylvania or New York, is not a promissory note within the statute. (Leiber v. Goodrich, 5 Cowen, 186.) So in Pennsylvania it was held that a promissory note, payable to A. B. or order, in notes of the chartered banks of Pennsylvania, was not a negotiable note, on which an indorsee could sue in his own name. (McCormick v. Trotter, 10 Serg. & Rawle, 94; Cook v. Satterlee, 6 Cowen, 108.) So in South Carolina it was held that a paper medium was not money, and therefore a note, payable in a paper medium, is not assignable. (Lungo v. Kahne, 1 McCord, 115; McClasen v. Nesbitt, 2 Nutt & McCord, 519.) [*37] So a draft, payable in "Arkansas money," was held not to be negotiable. (Hawkins v. Watkins, 5 Pike, 481, cited in Byles on Bills-note.)

On the other hand a bill, payable in "funds current in the city of New York," was held to be payable in gold or silver or their equivalent, and therefore good as a bill of exchange. (Lacy v. Holbrook, 4 Ala. 88.) So in Mississippi, a note for a sum certain, payable in cotton at a fixed price, is a good promissory note, and may be declared on as such. (Rankin v. Saunders, 6 How. [Miss.] 52, cited in Byles on Bills supra.) So it was formerly decided in New York that a note, payable to A. or bearer, in New York state bills or specie, was a negotiable note within the statute, upon the ground that the bills mentioned meant bank paper, which, in conformity to general usage and understanding, are regarded as cash, and, therefore, that the meaning was the same as if payable in the lawful current money of the state. (Keith v. Jones, 9 Johns. 120.) So a promissory note, payable at a particular place in "bank notes current in the city of New York," was held to be negotiable. (Judah v. Harris, 19 Johns. 144.) So, likewise, in Ohio, a note, payable in current funds of the state of Ohio, was held to be a note payable in money and negotiable. (Swetland v. Craigh, 15 Ohio, 118. See also, Morris v. Edwards, 1 Ohio, 189, and White v. Richmond, 16 Ohio, 5.)

But without determining the relative weight or preponderance of the conflicting authorities upon this point, we proceed to an examination of the Kansas statutes of 1855, the