American Commercial Law Series | by Alfred W. Bays

Preface To Revised Edition

The first edition of these books was prepared and published in 1911 and 1912, largely with the idea of meeting the class room needs of the author's own students. They have, however, been widely sold t...

General Survey. Chapter 1. Law Defined

Sec. 1. What Is Law To obtain an accurate estimate of the idea contained in the word law (i. e., political law) it must first be divided into that law which governs sovereign nations in their relat...

Chapter 2. The Branches Of Municipal Law

Sec. 5. Constitutional Law The law by which a government is organized and by which basic principles of its existence are formulated and enforced is known as constitutional law. The constitutiona...

The Branches Of Municipal Law. Part 2

Sec. 7. The State Constitutions The state con-stitutions are those by which the people of the state constitute their local form of government and limit the powers of their own representatives. W...

The Branches Of Municipal Law. Part 3

Sec. 10. The Law Of Torts The law of torts is the law which determines the obligations of each person toward his neighbor as imposed by the general law of the land and by the breach of which the ne...

Chapter 3. Form Of Law

Sec. 13. Purpose Of This Chapter In this chapter we propose to inquire into the form which the law takes in its expression. Where it is stated, so that we may read it ? Who has authority to state i...

Chapter 4. The Judicial System

Sec. 21. Function Of The Courts The courts are the constituted tribunals for the trial of cases according to the law as interpreted by them. In our scheme of government we have the legislature t...

The Judicial System. Continued

Sec. 23. Courts Of Original Jurisdiction And Of Review Our courts may be divided into those courts which take original jurisdiction for the trial of cases and those courts to which a defeated party...

Chapter 5. Administrative Boards And Commissions

Sec. 25. In General There have been created in the federal government and in the state governments, boards and commissions of considerable importance in the administration of certain laws. These bo...

General Law Of Contract. Part I. Formation Of Contract. Chapter I. Definition And Classification

Sec. 1. Contract Defined A contract is an agreement that contemplates as its object and results in an obligation for the breach of which a suit for damages may be maintained in a court of law. T...

Chapter 2. Parties To Contracts. A. Who Are Parties

Sec. 4. Parties Defined A party to a contract is a person who by himself or his agent, has a part in making the contract. A contract carries an adversary idea, that is to say, an arrangement of ...

B. Minors

Sec. 6. Who Are Minors? A minor or infant is one who has not attained the age which the law deems necessary to give him his full maturity of mind and below which he requires a special protection fr...

B. Minors. Part 2

Sec. 9. What Are Necessaries? Necessaries are advantages supplied to a person under age which are requisite to his physical well-being, and common school education, and with which he is not already...

B. Minors. Part 3

Sec. 11. Tortious Liability Of Minors In Cases Involving Contracts A minor is responsible for his torts. If in connection with some voidable contract made by him he commits a wilful and independent...

Chapter 3. Offer And Acceptance. 1. What Constitutes. A. Necessity Of Offer And Acceptance

Sec. 17. No Contract Without Offer And Acceptance In every contract, there must be an offer and an acceptance thereof. Offer and acceptance are essential to contract. That is, there must be, as ...

C. Duration Of Offer

Sec. 23. Duration Of Offer An offer remains open for acceptance: (1) The time stated; or (2) if no time is stated, a reasonable time; provided in either case it is not sooner withdrawn. An offer...

D. The Acceptance

Sec. 29. What Constitutes Acceptance Acceptance is a definite manifestation of a purpose to be bound according to the terms of the offer. Therefore there is no acceptance where there is doubt or di...

Chapter 4. Offer And Acceptance. 2. Validity Of Assent Therein

Sec. 33. Introduction We have discussed what will constitute offer and what acceptance. In so doing we have assumed a true contractual intent on both sides without mistake as to subject matter, or ...

Offer And Acceptance. Validity Of Assent Therein. Part 2

Sec. 35. Mistake A mutual mistake of fact, (a) as to the existence of the subject matter, (b) as to the identity of the subject matter, (c) as to terms employed, prevents the existence of a contrac...

Offer And Acceptance. 2. Validity Of Assent Therein. Part 3

Sec. 38. Opinions And Predictions Not Fraud Opinions and predictions are not fraud even if stated by one who himself does not believe them to be true. It is well established that the statement o...

Offer And Acceptance. 2. Validity Of Assent Therein. Part 4

Sec. 42. Silence As Fraud - Contract One Uberrimae Fidel If a contract is of such a nature that it presupposes full disclosure non-disclosure is fraud. This has been applied to cases of suretyship ...

Chapter 5. Consideration

A. Theory and Nature. Sec. 49. Consideration Defined; A Necessary Element In Every Simple Contract A promise or undertaking not under seal is not legally binding upon the promisor unless the pro...

Consideration. Part 2

Sec. 51. Consideration May Consist In Promise Or Act The detriment sustained by one as a consideration may be either his promise or his act, whichever is responsive to the expression of the other s...

Consideration. Part 3

Sec. 55. Part Payment Of Debt As Consideration For Release Of Balance A payment of a part of a debt whose amount is liquidated and not in question is not a good consideration for a release of the e...

Chapter 6. Legality Of Contracts

A. Legality of Contract an Essential Element. Sec. 59. Illegal Agreements Void Any agreement to violate the law and any agreement forbidden by law is void. An illegal agreement cannot be a co...

Legality Of Contracts. Part 2

Sec. 61. Contracts Of Monopolistic Tendency Contracts of monopolistic tendency are illegal by the principles of the common law and by statute. A contract whose purpose or effect is to create mon...

Legality Of Contracts. Part 3

Sec. 64. Wager Contracts A wager contract is a contract that on the outcome of a risk created or assumed by the contract, one party shall be winner, the other loser. It is illegal. There are man...

Legality Of Contracts. Part 4

Sec. 69. Knowledge By One Of Other's Intent To Commit Crime Where the contract is innocent upon its face, and the intention of one party is not illegal, the guilty intention of the other will not i...

Chapter 7. Form And Evidence Of Contract

Sec. 76. General Statement We have considered the ingredients that must enter in the formation of contracts, without which a contract cannot exist; confining ourselves to a consideration of those e...

Form And Evidence Of Contract. Part 2

Sec. 79. Instruments Requiring Seal At Common Law By the common law a seal is essential to make binding all promises intended to operate without consideration and is required upon deeds, mortgages,...

Form And Evidence Of Contract. Part 3

Sec. 83. Text Of The Statute Of Frauds The original English Statute of Frauds provided as follows: That no action shall be brought (1) whereby to charge any executor or administrator upon any s...

Form And Evidence Of Contract. Part 4

Sec. 86. Promises To Answer For The Debt, Default, Or Miscarriage Of Another Person A promise of any person to answer for the debt, default, or miscarriage of another person cannot be enforced unle...

Form And Evidence Of Contract. Part 5

Sec. 90. Contracts For The Sale Of Goods, Wares And Merchandise For A Certain Price Or Upwards 131. Bull v. Griswold, 19 Ibid. 631. 132. MacElree v. Wolfersberger, 59 Kan. 105. These contract...

Form And Evidence Of Contract. Part 6

Sec. 94. Contracts For Work And Labor Not Within The Statute If when the contract was made it was contemplated that the seller should make up for the buyer the goods which were the subject matter...

Form And Evidence Of Contract. Part 7

Sec. 97. Parol Evidence Rule Permits Contract Partly In Writing And Partly Oral The parol evidence rule does not prevent a contract from being partly oral and partly in writing if such appears to h...

E. Oral And Implied Contracts

Sec. 100. Oral Contracts Any contract may be oral which the law does not require to be in writing. The general rule is that any contract may be oral (or implied) if some statute does not require...

F. Contracts Implied In Law Or Quasi-Contracts

Sec. 102. Definition Of Quasi Contract A quasi contract may be defined as a legal obligation arising out of the receipt of a benefit for which there has been no actual promise to pay the retention ...

Part II. The Interpretation Of Contracts. Chapter 8. General Rules Of Interpretation

Sec. 103. The Governing Principle In Construction Of Contracts The purpose of construe tion of contracts is to discover the intention of the parties. It is not a court's business, nor has it pow...

Chapter 9. Construction In Respect To Time Of Performance

Sec. 105. In A Court Of Law, Time Is Of The Essence In a court of law time is deemed to be of the essence of a contract, and, unless time is waived, performance must be within the time stated, or, ...

Chapter 10. Interpretation Of Provisions As To Penalties Or Liquidated Damages

Sec. 107. In Explanation Usually in contracts, no provision is made as to rights or remedies in event of breach, but not infrequently the possibility of breach is contemplated, and provisions made ...

Part III. Operation Of Contracts. Chapter 11. Operation As To Parties

Sec. 112. General Rule A contract operates to confer upon the parties, and only upon the parties, rights and obligations according to its tenor. We have discussed the formation of the contract, ...

Chapter 12. Beneficiaries To Contracts

Sec. 113. General Statement One who is not a party to a contract, but who benefits thereby, cannot sue upon it at all in some jurisdictions, but in the majority may sue provided he comes within rul...

Chapter 13. Assignment Of Contracts

Sec. 116. General Statement The transfer of something of an incorporeal nature is accomplished by assignment. Assignment may signify (1) a sale; (2) a pledge to secure a loan; (3) a gift; (4) a tra...

Assignment Of Contracts. Continued

Sec. 122. The Assignee As The Successor To The Title Of The Assignor The assignee takes the title and right of the assignor, and is subject to all the equities and defenses between the original par...

Chapter 14. Interference With Contractual Relationships By Third Parties

Sec. 126. Duty Not To Interfere With Contract Rights A third person has a duty not to interfere to induce another to break his contract, unless done in good faith, in the exercise of fair competiti...

Part IV. Discharge Of Contracts. Chapter 15. Discharge By Performance, Tender And Breach

Sec. 129. Meaning Of Phrase Discharge Of Contracts. A contract is discharged when the obligations thereunder are in some way extinguished, so that no liability on the contract furthermore exists...

Discharge By Performance, Tender And Breach. Continued

Sec. 133. Effect Of Acceptance Of Performance Which Does Not Fulfill Requirements Of Terms If defective or part performance is accepted, with knowledge of the breach, such acceptance, when voluntar...

Chapter 16. Discharge Of Contracts By Other Means Than Performance Or Breach

Sec. 138. Discharge By Impossibility Of Performance If an event transpires rendering performance impossible this will discharge the contract where it may be said to have been the mutual intent of t...

Chapter 17. Remedies Of The Parties. A. Action For Damages

Sec. 145. In General The most usual relief which one has against another for breach of contract is an action for damages in a court of law. And wherever there is a breach of contract, the other par...

Appendix. Questions And Problems. Appendix. Questions And Problems In General Survey

Chapter 1 1. What are the two great branches of political law? What is municipal law? 2. What is international law? What two forms does it take? 3. What are the branches of municipal law, as ...

Questions And Problems On Contracts

Chapter 1 1. Define contract; is every agreement a contract? Why? What ideas enter into contract? 2. What are the essential elements in contract? 3. Define (a) formal contracts; (b) simple co...

Questions And Problems On Contracts. Part 2

25. A writes B a letter offering to sell B five carloads of lumber according to terms stated - giving B five days to accept. B replies within the five days agreeing to take the lumber on the terms pro...

Questions And Problems On Contracts. Part 3

43. What is undue influence? When will it be presumed? When presumed what must the other party do to remove the presumption? Chapter 5 44. Define consideration. Can there be a contract without i...

Questions And Problems On Contracts. Part 4

61. Define usury. Is it a crime to charge usury? Can usury paid be recovered? What is the penalty of charging usury? 62. A borrows money from B at usurious rates. A repays interest from time to tim...

Questions And Problems On Contracts. Part 5

83. A applies for Are insurance upon the house and outbuildings upon his farm. The insurance agent comes out and looks the place over and decides to write the insurance. By mistake he mis-described th...

Law Of Agency. Part I. Nature And Formation Of Agency. Chapter 1. Definitions

Sec. 1. Nature Of Agency If one appoints another to do an act for him as the act of the appointing party, such appointing party is known as the principal or master and the other party the agent or ...

Chapter 2. Capacity Of Parties And Power Of Delegation

Sec. 5. In General The power of a person to act as principal or to act as agent involves the general subject of the legal competency of classes of persons. The power of any person to be principal o...

A. Power To Be Principal Or Agent As Dependent Upon Capacity To Contract

Sec. 6. General Rule As To Power To Be Principal The general rule is that whatever one has capacity to do himself he has capacity to appoint another to do for him. If one has legal capacity and ...

B. Power To Be Principal Or Agent As Dependent Upon Nature Of Act Involved

Sec. 10. Appointment Of Agent For Illegal Purposes An appointment of an agent for an illegal purpose is void. If the agent is appointed for an illegal purpose, the appointment is void. Obviously...

Chapter 3. The Appointment Of The Agent. A. Authorization By Act Of Party

Sec. 13. In General Except as considered in Part B of this chapter (covering cases not of true agency) an agent's authority must be traceable to something the principal has said or done whereby he ...

B. Authority Conferred By Law

Sec. 16. In General In some cases, as considered below, one person may bind another without the consent of the other, and even against his protest. But this is a liability imposed by law and is not...

Chapter 4. Authorization By Ratification. A. Definition And Essentials

Sec. 20. Meaning Of Ratification If one acts as an agent and yet without authority, the party for whom he purported to act may hold the third person, and is himself liable to such third person, by ...

B. What Constitutes Ratifications

Sec. 22. Express Ratification Express ratification consists in supplying the lack of authority by writing or orally. Ratification may be expressly made. The principal might ratify by express sta...

Part II. The Duties And Liabilities Arising Out Of. Agency. Chapter 5. The Duties And Liabilities Of The Principal To The Agent

Sec. 28. Agent's Right To Compensation The agent's right to compensation depends on his contract, and may be either conditional upon results or absolute. His right may be implied from the facts. ...

Chapter 6. The Duties And Liabilities Of The Agent To The Principal. A. The Agent's Obligation Of Good Faith

Sec. 33. Duty Of The Agent To Use Good Faith General rule. The agent must display and exercise the utmost good faith toward his principal. One employs another as agent out of personal regards. T...

B. Duty To Obey Instructions, Use Care And Skill, Etc

Sec. 37. Duty Of Agent To Obey Instructions An agent must obey instructions and is personally responsible for losses resulting from disobedience and may be discharged for disobedience. 47. Blank...

C. Liability Of Agent To Principal For Defaults Of The Third Person

Sec. 42. General Rule The general rule is that an agent has no responsibility for defaults of the third person upon the contract executed by the agent. An agent is merely an intermediary. He for...

Chapter 7. The Duties And Liabilities In Contract Of A Disclosed Principal To Third Persons (The Authority Of The Agent)

Sec. 44. General Rule A principal in whose name a contract is made pursuant to authority, is liable to the third person. We may find three situations in which a principal who is disclosed at the...

Duties Of A Disclosed Principal To Third Persons. Part 2

Sec. 48. Construction Of Special Appointments Special powers of attorney or appointments will not be extended by implication to include any act not necessary or reasonable to carry into effect the ...

Duties Of A Disclosed Principal To Third Persons. Part 3

Sec. 53. Implied (Or Apparent) Power Of Agent To Sell To Receive Payment An agent who has power to sell does not have implied or apparent power to receive the price unless (1) he has and delivers p...

Chapter 8. Undisclosed Principals

Sec. 59. General Rule If the principal is undisclosed at the time of the transaction, but subsequently discovered, the third person may elect to hold such principal because he is the real party in ...

Chapter 9. Principal's Liability For Torts Of Agents

Sec. 66. Authorized Torts If the principal authorizes the tort, he is liable. If before the commission of a tort by an agent the principal authorizes or counsels its commission he is liable as a...

Chapter 10. The Duties And Liabilities Of The Agent To The Third Person

Sec. 70. General Statement Where the agent regularly pursues his authority and acts as an agent and not as principal, and is guilty of no wrong, he is not liable to the third person with whom he ac...

A. Liability Of Agent In Contract

(a) The agent warrants his authority. Sec. 71. Warranty Of Authority By Agent If an agent expressly claims to have authority or by his acts indicates that he has authority, he warrants his autho...

B. Liability Of Agent In Tort

Sec. 78. Agent Responsible For His Torts An agent is responsible to third persons for torts committed by him, whether the principal is liable or not for them. An agent is responsible for his tor...

Part III. Professional Agents. Chapter 11. Professional Agents. A. Factors

Sec. 79. Definition Of Factor A factor, or commission merchant is an agent, who receives goods from the owners thereof to sell for a commission. Where he sells upon a guaranty of payment of debts a...

B. Brokers

Sec. 84. Definition A broker is one whose business is to bring parties together to contract, or in their name to contract for them, in some line of business. A broker makes it his business to br...

C. Auctioneers

Sec. 87. Auctioneer Defined An auctioneer is an agent who makes it his business to represent owners of property in selling the same to the highest and best bidder among those who attend the sale. ...

Part IV. Termination Of Relationship. Chapter 12. Termination By Act Of Parties

Sec. 91. By Terms Of Original Agreement Where the authority is stated to be for a limited period, the passing of the term terminates the agency. If one is employed as agent for a certain time, t...

Chapter 13. Revocation By Operation Of Law

Sec. 99. By Death Of Principal The death of the principal terminates the agency, except when the agency is coupled with an interest. This is true though the death is unknown when the contract was a...

Appendix A. Forms

(It is not believed desirable to furnish forms in a book of this character, except forms commonly in use, and for purpose of illustration. A form of power of attorney is supplied below.) 1. Power o...

Appendix B. Questions And Problems

Chapter One 1. Define the terms agent and servant ; show in what way an agent is the same as a servant and in what respects the two differ, and how an agent or servant differs from an independe...

Appendix B. Questions And Problems. Part 2

25. A employed B to purchase property for her for $5,000. B negotiated with the owner and found he could purchase for $4,500. B thereupon bought it himself. A learning of this brings suit, tendering $...

Appendix B. Questions And Problems. Part 3

47. In a personal injury case, caused by breaking of chains, plaintiff offers to testify as evidence against the defendant that defendant's foreman an hour after the accident stated to plaintiff that...

Preface To Volume II

In preparing this book the author considered the plan of setting out the Negotiable Instruments Act, section by section, following each section with an explanation and illustrations. But for several r...

The Law Of Negotiable Paper. Part I. General Nature And History. Chapter 1. What Is A Negotiable Instrument. A. General Description Of Negotiable Paper

Sec. 1. Technical Significance Of The Term Negotiable. By the term negotiable we Indicate that certain instruments, so described, are given by law a property by virtue of which they may be tran...

B. Negotiability Of Various Instruments Considered

(a) The instruments which are negotiable by and subject to the negotiable instruments law or law merchant. Sec. 2. Promissory Notes A negotiable promissory note within the meaning of this act i...

B. Negotiability Of Various Instruments Considered. Continued

Sec. 4. Checks A check Is a bill of exchange drawn on a bank, payable on demand.4 A check may be called a kind of a bill of exchange. It differs from other bills of exchange in these particula...

Chapter 2. History And Origin Of Negotiable Paper

Sec. 13. Continental Origin And Adoption In England Bills of exchange originated among the Florentine and Venetian merchants. They came into use in England and with promissory notes became negotiab...

Part II. The Formation Of The Contract. Chapter 3. Expression In Negotiable Form. 1. Formal Requisites

Sec. 15. In General Certain elements are required by law to be present in any instrument, as essential to negotiability. While it cannot be said that there are any particular words, exclusively nec...

A. "It Must Be In Writing And Signed By The Maker Or Drawer."

Sec. 16. Writing And Signature A negotiable instrument must be written and signed. Rights secured through oral promises may be assignable but never negotiable, no matter what words are used to e...

B. "Must Contain An Unconditional Promise Or Order To Pay A Sum Certain In Money."

Sec. 17. Unconditional Promise Or Order A negotiable Instrument must contain an unconditional promise or order-------. (1) In general. Absolute promise or order is essential. A note must co...

"Must Contain An Unconditional Promise Or Order To Pay A Sum Certain In Money.". Continued

7. Siegel v. Bank, 131 Illinois Reports, 669. The court decided that the note was negotiable and allowed the bank to recover judgment thereon; saying in part: If it be conceded, as it must, tha...

C. Must Be Payable On Demand Or At A Fixed Or Determinable Future Time

Sec. 20. Demand Paper Instrument may be payable on demand. It is a common practice to make negotiable paper payable on demand. It is payable on demand: 1. Where it is expressed to be paya...

D. "Must Be Payable To Order Or To Bearer."

Sec. 22. Necessity Of Words Of Negotiability A negotiable instrument must contain words of negotiability. These stamp its character. The intent of the parties as to the negotiability of the inst...

Chapter 4. Expression In Negotiable Form. 2. Non-Essential And Non-Vitiating Matter Of Form And Rules Of Construction

Sec. 25. Authorizing Sale Of Collateral Securities A provision which authorizes the sale of collateral securities in case the instrument is not paid at maturity, is valid and does not affect negoti...

Chapter 5. Execution And Delivery. Parties Bound

Sec. 33. Delivery Essential; When Presumed The Instrument Is Ineffectual between the parties until delivery thereof, which consists of a parting with the control over It, with an Intention to be bo...

Chapter 6. Consideration For Execution.27

Sec. 36. Necessity Of Consideration Every negotiable Instrument to be enforceable between the parties must be supported by a consideration. But lack of consideration cannot be availed of against a ...

Chapter 7. The Formation Of The Acceptor's Contract

Sec. 39. Definition Of Acceptance The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee. ...

Chapter 8. The Formation Of The Contract Of Parties For Accommodation Or For Honor

Sec. 47. Accommodation Party Defined One who becomes a party to a negotiable instrument in order to lend his credit to another is called an accommodation maker, drawer, indorser, or acceptor as the...

Part III. Operation Of The Contract. Chapter 9. Negotiation. A. In General Of Negotiation And Indorsement

Sec. 50. Meaning Of Negotiation By negotiation Is meant the transfer of negotiable paper by the payee thereof or his transferee with the intention and effect of constituting the transferee the hold...

B. Kinds Of Indorsement

Sec. 57. Special Indorsement A special Indorsement Is one which specifies a particular Indorsee. An indorsement to a certain person naming him in the indorsement is called a special indorsement....

Chapter 10. The Title Of A Transferee Of Negotiable Paper

Sec. 62. In General The title of a transferee of negotiable paper involves the two-fold inquiry, (1) whether the party liable on such paper had any defense, and if so what defense, against any prio...

A. Transferee Must Be A Holder In Due Course To Claim Full Benefit Of Law Merchant

Sec. 63. Holder In Due Course, Who Is In order to claim the peculiar advantages of the law merchant, the holder must be a holder in due course; that is, he must have acquired (1) paper complete and...

B. The Defenses Which Cannot Be Made Against A Holder

In due course, as above defined. Personal defenses. Sec. 69. Payment Before Maturity If one pays the sum or any part thereof owing, but not due, on paper which he fails to take up or...

C. The Defenses Which Can Be Set Up Against A Holder In Due Course, As Above Defined. Real Defenses

Sec. 78. Infancy A minor can plead his non-age against a holder in due course. The defense of minority is good against all the world. A minor's express contract is voidable by him. He is liable ...

Chapter 11. The Contract Of The Parties.40

Sec. 83. Of Maker Of Note The maker's contract Is to pay the note, according to Its tenor, to the payee, or his transferee. He cannot deny the payee's existence or his then capacity to indorse. His...

Chapter 12. The Procedure Necessary To Fix The Liability Of The Parties

Sec. 92. General Statement In order to fix the liability of parties secondarily liable on a negotiable Instrument it Is necessary to take certain steps provided by law for the benefit of such parti...

Liability Of The Parties. A. Presentment For Payment At Maturity To Parties Primarily Liable

Sec. 93. Not Necessary To Charge Parties Primarily Liable Presentment of a note to the maker thereof, or of an accepted bill to the acceptor thereof at its maturity, Is not necessary to fix the lia...

B. Presentment Of Bill For Acceptance

Sec. 97. Presentment For Acceptance Necessary In Certain Cases To Charge Drawer And Indorsers In order to charge the drawer, presentment for acceptance to the drawee is necessary (except where excu...

C. Notice Of Dishonor

Sec. 101. Notice Of Dishonor Necessary To Charge Drawer And Indorser Notice to the drawer of a bill or check and to the indorser of a bill, check or note, that it has been dishonored by non-payment...

D. Protest

Sec. 106. Protest Necessary To Charge Drawer And Indorser On Foreign Bill Where a foreign bill is dishonored by non-acceptance or non-payment It must be protested; otherwise the drawer and Indorser...

Part IV. Discharge Of Negotiable Instruments. Chapter 13. Manner And Effect Of Discharge.44

Sec. 110. Meaning Of Term Discharge. A contract is discharged when it loses Its force and effect as a legal obligation. A discharged contract is one which for some reason is no longer in force...

Appendix A. Uniform Negotiable Instruments Law

(For states in which this law is substantially enacted, see page 40, note.) Secs. 1-23. Form and interpretation. 24-29. Consideration. 30-50. Negotiation. 51-59. Rights of the holder. ...

Title I. - Negotiable Instruments in General

Article I. - Form and Interpretation. SEC. 1. An instrument to be negotiable must conform to the following requirements: 1. It must be in writing and signed by the maker or drawer. 2. Must co...

Negotiable Instruments in General. Part 2

SEC. 15. Where an incomplete instrument has not been delivered it will not, if completed and negotiated, without authority, be a valid contract in the hands of any holder, as against any person whose ...

Negotiable Instruments in General. Part 3. Negotiation

Article III. - Negotiation. SEC. 30. 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 b...

Negotiable Instruments in General. Part 4. Rights of the Holder

Article IV. - Rights of the Holder. SEC. 51. The holder of a negotiable instrument may sue thereon in his own name and payment to him in due course discharges the instrument. SEC. 52. A holder i...

Negotiable Instruments in General. Part 5. Liability of Parties

Article V. - Liability of Parties. SEC. 60. The maker of a negotiable instrument by making it engages that he will pay it according to its tenor, and admits the existence of the payee and his then ...

Negotiable Instruments in General. Part 6. Presentment For Payment

Article VI. - Presentment For Payment. SEC. 70. Presentment for payment is not necessary in order to charge the person primarily liable on the instrument but if the instrument is, by its terms, pay...

Negotiable Instruments in General. Part 7. Notice of Dishonor

Article VII. - Notice of Dishonor. SEC. 89. Except as herein otherwise provided, when a negotiable instrument has been dishonored by non-acceptance or non-payment, notice of dishonor must be given ...

Negotiable Instruments in General. Part 8. Discharge of Negotiable Instruments

Sec. 119. A negotiable instrument is discharged: 1. By payment in due course by or on behalf of the principal debtor. 2. By payment in due course by the party accommodated, where the instrument ...

Title II. - Bills of Exchange

Article I. - Form and Interpretation. Sec. 126 A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to...

Bills of Exchange. Continued. Presentment for Acceptance

Article III. - Presentment for Acceptance. Sec. 143 Presentment for acceptance must be made.: 1. Where the bill is payable after sight, or any other case where presentment for acceptance is n...

Title III. - Promissory Notes and Checks

Article VII. - Bills in a set. Sec. 178 Where a bill is drawn in a set, each part of the Bet being numbered and containing a reference to other parts the whole of the parts constitute one bill. ...

Title IV. - General Provisions

Article I. Sec. 184 A negotiable promissory note within the meaning of this Act is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on dema...

Appendix B. Various Forms

1. Promissory Note. $100.00 Chicago, 111., July 1st, 1911. August first, 1911, after date, for value received, I promise to pay to the order of William Smith, the sum of One Hundred (100) Dollar...

Appendix C. Table Of Interest Laws

Table Showing What Interest May Be Charged in the Different States and the Effect of Charging Usury. State Interest Chargeable By Contract Penalty for Usury ...

Appendix D. Questions And Problems

Chapter One 1. State three ways in which a negotiable instrument differs from an instrument not negotiable. How does assignment differ from negotiation? 2. Define a negotiable promissory not...

Appendix D. Questions And Problems. Continued

Chapter Eight 38. A, for the purpose of securing credit with C, drew a bill of exchange on B, requesting B to accept It, and Informing B that he, A, would be able to pay it when It became toe. w...

Subdivision I. Bailments And Carriers. Chapter 1. Definitions

Sec. 1. Bailment Defined A bailment is a holding of personal property by one person which belongs to another under a contract or legal duty to redeliver to that other either in the same or altered ...

B. Extraordinary Bailments

1. Inn Keepers. 2. Common Carriers. Sec. 3. How Bailment Differs From Sale There is a sale whenever ownership passes. In a bailment ownership does not pass. A bailment may be involved in a sa...

Chapter 2. Rights And Obligations Of Ordinary Bailees

Sec. 5. Bailee's Duty Of Care An ordinary bailee is not an insurer, and is only bound to use such care in keeping the goods as under the circumstances of the case amounts to reasonable care. In ...

Chapter 3. Extraordinary Bailees

Sec. 9. Public Service Businesses A business which peculiarly serves the public is subject to the peculiar regulation of the state and is known as a public utility or public service business. Histo...

Extraordinary Bailees. Continued

Sec. 13. Common Carrier's Duty To Transport Goods Safely The rule of the common law was that the carrier of goods undertook an absolute duty to carry and deliver safely, unless harm befell by Act o...

Chapter 4. Bills Of Lading And Warehouse Receipts

Sec. 16. Documents Of Title Defined A document of title is a document issued by a carrier or warehouseman reciting the receipt of goods for carriage or keeping and the terms and conditions thereof....

Subdivision II. Sales Of Personal Property. Part I. Formation Of Contract Of Sale. A. Definitions And Distinctions. Chapter 5. Definition And General Nature

Sec. 26. Definitions A sale of goods is an agreement whereby the seller transfers the property in goods to the buyer for a consideration called the price. A contract to sell goods is a contract ...

B. Form Of Contract

Sec. 30. Sale In Writing; Oral; Or Implied Subject to the provisions of this act and of any statute in that behalf, a contract to sell or a sale may be made in writing (either with or without seal...

B. Form Of Contract. Continued

Sec. 33. Statute Of Frauds No Defense If Payment Has Been Made In Whole Or In Part If there has been a payment by the buyer the contract is enforceable by or against him though it is otherwise unex...

Chapter 6. Parties And Subject Matter

Sec. 37. Parties To Sales The capacity of parties to sales is governed entirely by the general law of contract. Reference is made to the general law of contract as to capacity of parties to sale...

Chapter 7. The Contract's Obligations As Affected By Warranties

Sec. 41. Definition Of Warranty A warranty is a part of the contract of sale. It consists in the assertion of some fact concerning the goods put forth to induce the contract and which did induce it...

A. Express Warranties

Sec. 42. What Constitutes Express Warranty Any affirmation of fact or any promise by the seller relating to the goods is an express warranty if the natural tendency of such affirmation or promise ...

Express Warranties. Part 2

Sec. 45. Generally Of The Implied Warranties Under the law of sales, warranties of an implied nature arise, from different classes of fact, unless negatived by the agreement of the parties. Unde...

Express Warranties. Part 3

Sec. 48. The Implied Warranties In A Sale By Description In a sale by description there is (1) an implied warranty that the goods shall correspond with the description; (2) that the goods are merch...

A. Express Warranties. Part 4

Sec. 50. The Implied Warranty Of Fitness For Purpose Bought Where goods are purchased for a particular purpose which is expressly or by implication made known to the seller there is an implied warr...

Express Warranties. Part 4

Sec. 52. Right Of Remote Purchaser To Sue In Tort A remote purchaser of an article may sue the manufacturer or producer thereof for injuries sustained by him in cases in which such manufacturer or ...

Part II. The Contract's Effect As Transferring Title. Chapter 8. Transfer Of Title Between Buyer And Seller, When Rights Of Third Parties Not Involved

Sec. 53. Meaning Of Phrase Transfer Of Title In every complete sale there is a certain moment of time wherein the ownership of the goods by the seller ceases and that of the buyer begins; therein ...

Transfer Of Title Between Buyer And Seller, When Rights Of Third Parties Not Involved. Part 2

Sec. 57. Rules For Ascertaining Intention Of The Parties SECOND RULE. Unless a different intention appears where there is a contract to sell specific goods, and the seller is bound to do something...

Title Transfer Between Buyer And Seller, When Rights Of Third Parties Not Involved. Part 3

Sec. 59. Rules For Ascertaining The Intention Of The Parties FOURTH RULE. Unless a different intention appears (1) where there is a contract to sell unascertained or future goods by description, a...

Chapter 9. Title And Third Persons

Sec. 63. Attempted Sale By One Not Owner: In General If goods are sold by one not the owner thereof, no title is acquired by the purchaser unless the real owner is estopped to assert his own title....

A. When True Owner Not Estopped To Assert Title

Sec. 64. In General Against third persons an owner of goods by merely investing another with their possession for a lawful purpose is not thereby estopped to assert his title against any one claimi...

B. When True Owner Estopped To Assert Title Against Third Persons

Sec. 67. In General Where other than by mere possession the owner authorizes or permits another to deal with the goods as his own, he may be estopped to assert his ownership as to one who has dealt...

C. When True Owner Prevented By Statute From Asserting Title

Sec. 70. In General The law may prevent an owner from asserting his title; and statutes are in force in respect to (1) sales in which the seller retains possession; (2) conditional sales; (3) bulk ...

Part III. The Performance Of The Contract. Chapter 10. Obligations Of The Parties

Sec. 76. In General The obligations of the parties, being contractual in nature, are governed by the general law of contracts. Each in accordance with his contract is bound to perform, unless by so...

Chapter 11. Rights Of Seller Upon Non-Performance

Sec. 83. Enumeration Of Rights And Remedies Of Unpaid Seller A. Where Goods Have Not Been Delivered to Buyer. (a) If title has not passed: (1) A right to withhold delivery; (2) A right to ...

A. Where Goods Have Not Been Delivered To Buyer (Title Passed)

(a) If title has not passed. Sec. 86. Goods Not Delivered, Title Not Passed, Right To Withhold Delivery Or Rescind Contract If the title has not passed and the goods have been sold without credi...

B. Where Goods Have Been Delivered To Buyer Or His Agent

(a) Where title has not passed. Sec. 93. Right To Sue For Price Or Damages If the goods have been delivered to the buyer or his agent, and title has not yet passed, and the buyer is in default, ...

Chapter 12. Rights Of Buyer Upon Non-Performance

Sec. 98. Enumeration Of Rights And Remedies Of Buyer A. Where Goods Have Not Been Delivered to Buyer. (a) Where title has not passed: (1) Right to damages; (2) Right to specific performance i...

A. Where Goods Have Not Been Delivered To Buyer

(a) Where title has not passed. Sec. 99. Goods Not Delivered, Title Not Passed, Buyer's Right To Sue For Damages The buyer in such a situation must always sue for damages, except as noted in the...

B. Where Goods Are Delivered Or Tendered To Buyer

(a) Right to refuse acceptance for breach of warranty. Sec. 102. Goods Tendered To Buyer, Right To Refuse Acceptance For Breach Of Warranty If the goods which are tendered to the buyer do not co...

Appendix A. Uniform Sales Act

(Note: The following Act was recently drafted by the Commissioners on Uniform State Laws, and recommended for passage by the different states. It does not seek in any substantial way to change existin...

Part I. Formation Of The Contract

Section I. (Contracts to Sell and Sales.) (1) A contract to sell goods is a contract whereby the seller agrees to transfer the property in goods to the buyer for a consideration called the price. (...

Part I. Formation Of The Contract. Continued

The Price. Section 9. (Definition and Ascertainment of Price.) (1) The price may be fixed by the contract, or may be left to be fixed in such manner as may be agreed, or it may be determined by the...

Part II. Transfer Of Property And Title. Transfer Of Property As Between Seller And Buyer

Section 17. (No Property Passes until Goods are Ascertained.) Where there is a contract to sell unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ...

Transfer Of Title

Section 23. (Sale by a Person Not the Owner.) (1) Subject to the provisions of this act, where goods are sold by a person who is not the owner thereof, and who does not sell them under the authority o...

Part III. Performance Of The Contract

Section 41. (Seller Must Deliver and Buyer Accept Goods.) It is the duty of the seller to deliver the goods, and of the buyer to accept and pay for them, in accordance with the terms of the contract t...

Part IV. Rights Of Unpaid Seller Against The Goods

Section 52. (Definition of Unpaid Seller.) (1) The seller of goods is deemed to be an unpaid seller within the meaning of the act (a) When the whole of the price has not been paid or tendered. (b) ...

Unpaid Seller's Lien

Section 54. (When Right of Lien May Be Exercised.) (1) Subject to the provisions of this act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until pay...

Stoppage In Transitu

Section 57. (Seller May Stop Goods on Buyer's Insolvency.) Subject to the provisions of this act, when the buyer of goods is or becomes insolvent, the unpaid seller who has parted with the possession ...

Resale By The Seller

Section 60. (When and How Resale May Be Made.) (1) Where the goods are of a perishable nature, or where the seller expressly reserves the right of resale in case the buyer should make default, or wher...

Rescission By The Seller

Section 61. (When and How the Seller May Rescind the Sale.) (1) An unpaid seller having a right of lien or having stopped the goods in transitu, may rescind the transfer of title and resume the proper...

Part V. Actions For Breach Of The Contract. Remedies Of The Seller

Section 63. (Action for the Price.) (1) Where, under a contract to sell or a sale, the property of the goods has passed to the buyer, and the buyer neglects or refuses to pay for the goods according t...

Remedies Of The Buyer

Section 66. (Action for Converting or Detaining Goods.) Where the property in the goods has passed to the buyer and the seller wrongfully neglects or refuses to deliver the goods, the buyer may mainta...

Part VI. Interpretation

Section 71. (Variation of Implied Obligations.) Where any right, duty or liability would arise under a contract to sell or a sale by implication of law, it may be negatived or varied by express agreem...

Appendix B. Uniform Bills Of Lading Act

(Adopted in Alaska, Connecticut, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, North Carolina, New Hampshire, New Jersey, New York, Ohio, Pennsylvani...

Appendix B. Uniform Bills Of Lading Act. Part 2

(b) Had information at the time of the delivery that it was to a person not lawfully entitled to the possession of the goods. A request or information to be effective within the meaning of this sec...

Appendix B. Uniform Bills Of Lading Act. Part 3

SEC. 24. If goods are delivered to a carrier by the owner or by a person whose act in conveying the title to them to a purchaser for value in good faith would bind the owner and a negotiable bill is i...

Appendix B. Uniform Bills Of Lading Act. Part 4

In the case of an assignment of a claim secured by a bill, the liability of the assignor shall not exceed the amount of the claim. SEC. 36. The indorsement of a bill shall not make the indorser lia...

Appendix B. Uniform Bills Of Lading Act. Part 5

SEC. 44. Any officer, agent, or servant of a carrier, who with intent to defraud issues or aids in issuing a bill knowing that all or any part of the goods for which such bill is issued have not been ...

Appendix C. Forms

Page 1. Bill of Sale............................................ 187 2. Memorandum of Sale.................................. 188 3. Chattel Mortgage....................................... 189 ...

1. Bill Of Sale

KNOW ALL MEN BY THESE PRESENTS, that Henry Sampson of the City of Chicago in the County of Cook and State of Illinois, party of the first part, for and in consideration of the sum of Four Hundred and ...

2. Memorandum Of Sale

(Note: As stated in the text, it is not necessary to put contracts of sale in writing except as required by the statute of frauds. If there is delivery of all or part, or payment of all or part of the...

3. Chattel Mortgage

(As a chattel mortgage is so often given in sale transactions, to secure a portion or all of the purchase price, a form is here given. It is better to use the printed blanks to be secured of the stati...

4. Chattel Mortgage Note

$........ ............................191.. ........after date for Value Received,........promise to pay to the Order of........the sum of........Dollars, at........ with interest thereon at the...

5. Order Bill Of Lading

Original These Railroads do not accept for transportation Money, Gold, Silverware, Shipper's No........ Valuable Papers or Painting's nor any articles of extraordinary value unless special arran...

Order Bill Of Lading. Continued

SEC. 3. No carrier is bound to transport said property by any particular train or vessel, or in time for any particular market, or otherwise than with reasonable despatch, unless by specific agreement...

Appendix D3. Questions And Problems

Chapter 1 1. Define bailment. 2. Classify bailments. 3. State Examples 2 and 3. 4. Various farmers delivered wheat to a mill and received in return a certificate reading as follows: Ced...

Appendix D3. Questions And Problems. Continued

37. A sells B a car stating that it is a 1912 model. It is not a 1912, but an earlier model. Is A's statement a warranty? (Morris v. Flat Motor Sales Co. of Calif., 162 Pac. 663. [Cal.]). 38. A sol...

Negotiable Paper. Part I. General Nature And History. Chapter 1. General Description Of Negotiable Paper

Sec. 1. Meaning Of The Word Negotiable By the term negotiable as applied to obligations to pay money is denoted a quality by virtue of which the obligation so described is assignable at law by t...

Chapter 2. Negotiability Of Various Instruments. A. General Types Of Instruments Governed By Negotiable Instruments Law

Sec. 3. Promissory Notes Promissory notes are promises to pay money and are negotiable when drawn as required by the negotiable instruments law. Promissory notes are defined in the Uniform Negot...

B. Special Forms Of Bills, Notes And Checks

Sec. 6. In Explanation The above described instruments - bills of exchange, promissory notes and checks - are in commercial life for all practical purposes all of the kinds of negotiable paper. The...

C. Documents Of Title Made Negotiable By Statute But Not Governed By The Negotiable Instruments Law

Sec. 11. Bills Of Lading And Warehouse Receipts Bills of Lading and Warehouse Receipts may be drawn to order or to bearer in which event they have a quality of negotiability, but they are not instr...

D. Sundry Instruments Assignable But Not Negotiable

Sec. 12. Certificates Of Corporate Stock A stock certificate is an instrument issued by a corporation reciting that the bearer or person named therein is the owner of the number of shares in the co...

E. The Instruments Within The Scope Of This Text

Sec. 14. The Negotiable Instruments Herein Considered The negotiable instruments hereinafter discussed are only those properly falling under the uniform negotiable instruments law, that is, bills, ...

Chapter 3. History And Origin Of Negotiable Paper

Sec. 15. Continental Origin And Adoption In England Bills of exchange originated among the Florentine and Venetian merchants. They came into use in England and with promissory notes became negotiab...

Part II. The Formation Of The Contract. Chapter 4. Expression - Negotiable Form. 1. Formal Requisites

Sec. 17. In General Certain elements are required by law to be present in any instrument, as essential to negotiability. While it cannot be said that there are any particular words, exclusively nec...

Requisite A. "It Must Be In Writing And Signed By The Maker Or Drawer."

Sec. 18. Writing And Signature Writing and signature of maker or drawer are essential to negotiability. Our natural conception of a negotiable instrument is that of a written paper. Writing...

B. "Must Contain An Unconditional Promise Or Order."

Sec. 19. Unconditional Promise Or Order An instrument to be negotiable must contain an unconditional promise or order. (1) In general. A promissory note must contain an absolute promise, a ...

C. "... To Pay A Sum Certain In Money."

Sec. 20. Sum Certain Certainty of the sum payable determinable from the language of the instrument itself, is essential to negotiability. (1) In general The instrument must be to pay money w...

D. Must Be Payable On Demand Or At A Fixed Or Determinable Future Time

Sec. 22. Demand Paper A negotiable instrument may be payable on demand. Instruments to be negotiable must be payable on demand or at a fixed or determinable future time. What is demand paper?...

E. "Must Be Payable To Order Or To Bearer."

Sec. 24. In General An instrument is not negotiable unless it contains words of negotiability. An instrument to be negotiable must be payable to order or to bearer. Sec. 25. When Payable ...

F. "Where The Instrument Is Addressed To A Drawee, He Must Be Named Or Otherwise Indicated Therein With Reasonable Certainty."

Sec. 27. Meaning Of Provision This provision refers to bills of exchange and checks. The drawee must be named or otherwise indicated in the instrument itself with reasonable certainty. 51. Wit...

Chapter 5. Expression - Negotiable Form. 2. Provisions Not Requisite Which Do Not Prevent Negotiability

Sec. 28. In General In the preceding chapter the form requisite to negotiability was considered. In the present chapter we may consider what nonrequisite provisions may be included without destroyi...

Chapter 6. Execution And Delivery

Sec. 37. Delivery Essential The delivery of an instrument is essential to its taking effect. Delivery consists in any giving over into the control of the other party for the purpose of having it ef...

Chapter 7. Consideration For Execution.66

Sec. 42. Necessity Of Consideration Every negotiable instrument to be enforceable between the parties must be supported by a consideration. But lack of consideration cannot be availed of against a ...

Chapter 8. The Formation Of The Contract Of The Acceptor

Sec. 47a. In General A bill of exchange is, as has been noted, an order drawn by one person upon another in favor of a named payee, or order, or of bearer. Such person upon whom the order is drawn ...

Chapter 9. The Formation Of The Contract Of Parties For Accommodation Or For Honor

Sec. 54. Accommodation Party Defined One who becomes a party to a negotiable instrument in order to lend his credit to another is called an accommodation maker, drawer, indorser, or acceptor as the...

Part III. Operation Of The Contract. Chapter 10. Negotiation. A. In General Of Negotiation And Indorsement

Sec. 57. Meaning Of Negotiation By negotiation is meant the transfer of negotiable paper by the payee thereof or his transferee with the intention and effect of constituting the transferee the hold...

B. Kinds Of Indorsements

Sec. 64. Special Indorsement A special indorsement is one which specifies a particular indorsee. An indorsement to a certain person naming him in the indorsement is called a special indorsement....

Chapter 11. Holder In Due Course

Sec. 69. Introduction A person to whom negotiable paper is negotiated may have a right to enforce it according to its tenor notwithstanding his predecessor in title had no such right to enforce it,...

Holder In Due Course. Part 2

Sec. 72. Transferee Must Give Value In order to be a holder in due course, a transferee of negotiable paper must give value. (1) Giving value necessary only in case one seeks to qualify as holde...

Holder In Due Course. Part 3

Sec. 73. Transferee Must Take In Good Faith To be a holder in due course, a transferee of negotiable paper must acquire it in good faith. (1) In general. If a purchaser has actual notice of a...

Holder In Due Course. Part 4

Sec. 74. Transferee Must Acquire Instrument Before Overdue To be a holder in due course a transferee must acquire the paper before it is overdue. (1) In general. If paper is overdue, it conti...

Holder In Due Course. Part 5

Sec. 75. Indorsement Requisite Where one's legal title is not complete (paper not payable to bearer) except upon indorsement, he is not a holder in due course until such indorsement has been made. ...

Chapter 12. Defenses Against Holder In Due Course. A. Defenses Not Available Against Holder In Due Course-Personal Defenses

Sec. 79. In General It has been seen that to accord circulability to an obligation to pay money, which is one of the chief objects of the law of negotiable paper, it must be established that a pape...

B. Defenses Available Against Holder In Due Course - Real Defenses

Sec. 90. Real Defenses Defined A real defense is one good against any one whether holder in due course or not. There are some defenses good even against a holder in due course. They are called r...

Chapter 13. The Obligations Of The Parties.124

Sec. 96. Of Maker Of Note The maker's contract is to pay the note, according to its tenor, to the payee, or his transferee. He cannot deny the payee's existence or his then capacity to indorse. His...

Chapter 14. Presentment For Payment And For Acceptance

Sec. 105. General Statement In order to fix the liability of parties secondarily liable on a negotiable instrument, it is necessary to take certain steps provided by law for the benefit of such par...

A. Presentment For Payment At Maturity To Parties Primarily Liable

Sec. 106. Not Necessary To Charge Parties Primarily Liable Presentment of a note to the maker thereof, or of an accepted bill to the acceptor thereof, is not necessary to charge such parties. They ...

B. Presentment Of Bill For Acceptance.146

Sec. 110. Presentment For Acceptance Necessary In Certain Cases To Charge Drawer And Indorsers In order to charge the drawer, presentment for acceptance to the drawee is necessary (except where exc...

Notice Of Dishonor

Sec. 114. Notice Of Dishonor Necessary To Charge Drawer And Indorser Notice to the drawer of a bill or check and to the indorser of a bill, check or note, that it has been dishonored by non-payment...

Chapter 16. Protest

Sec. 119. Protest Necessary To Charge Drawer And Indorser On Foreign Bill Where a foreign bill is dishonored by non-acceptance or nonpayment it must be protested; otherwise the drawer and in-dorser...

Part IV. Discharge Of Negotiable Instruments. Chapter 17. Manner And Effect Of Discharge

Sec. 123 MEANING OF TERM DISCHARGE. A contract is discharged when it loses its force and effect as a legal obligation. A discharged contract is one which for some reason is no longer in force....

Part V. Added Chapters On Banks And Suretyship. Banks And Banking. A. Definitions

Sec. 129. Banks Defined A bank is an institution which borrows and loans money and deals in negotiable securities and keeps money on deposit. A banker is one who conducts a banking business. Banks,...

B. The Bank As A Corporation

(a) Organization. Sec. 130. Procedure To Incorporate The procedure to incorporate is regulated by the banking act - national or state. The steps requisite to incorporation are determined by t...

B. The Bank As A Corporation. Part 2

Sec. 137. Rights Of Stockholders Stockholders in a bank have the same general rights that obtain in other corporations. The right to hold meetings, to inspect the books, to receive dividends, is...

B. The Bank As A Corporation. Part 3

Sec. 139. The Bank President The bank president by virtue of his office, has the authority to represent the bank in a general way, and to conduct its litigation and employ counsel. By custom or usa...

B. The Bank As A Corporation. Part 4. A. Investments

Sec. 143. Investments In Real Estate A bank has no power to deal in real estate, except for incidental purposes. It cannot invest in real estate for the mere purpose of investment. The banking laws...

B. The Bank As A Corporation. Part 5. B. Deposits

Sec. 146. The Depositor A Creditor A depositor is a creditor of the bank. The funds deposited, unless specially deposited, are funds loaned to the bank. The depositor loses his ownership of such fu...

B. The Bank As A Corporation. Part 6

Sec. 149. The Bank's Undertaking With The General Depositor The bank's undertaking with a general depositor, that is, one having a general checking account, is to pay the depositor or his order on ...

B. The Bank As A Corporation. Part 7. C. Loans, Collections, Etc.

Sec. 151. Loans And Discounts To loan money is one of the principal functions of a bank, and it may loan on any sort of security except as forbidden by law, and in any amount except as restricted b...

B. The Bank As A Corporation. Part 7. D. Failure And Dissolution

Sec. 156. Bank Failures The bank fails when its assets are not sufficient to pay its liabilities. In this section the results of bank failure are briefly discussed. Failed banks are closed up...

Chapter 19. Guaranty And Suretyship

Sec. 158. Guaranty And Suretyship Defined By the terms guaranty and suretyship we indicate that one person has agreed with a creditor or promisee of another person to be responsible for the deb...

Guaranty And Suretyship. Part 2

Sec. 162. Consideration In Guaranty A guaranty must be supported by a consideration, which usually consists in extension of credit. As every simple contract must be supported by a considerat...

Guaranty And Suretyship. Part 3

Sec. 166. Re-Imbursement And Exoneration Of Surety Or Guarantor The right of re-imbursement is the right of the surety to be re-imbursed for payments made by him; the right of exoneration is the ri...

Guaranty And Suretyship. Part 4

Sec. 169. Various Causes Discharging The Surety (1) By discharge of principal's debt. When the debt of the principal is discharged, the surety's obligation also falls. As a general rule, anyt...

Appendix B. Forms

(NOTE: The forms in this series of books are not numerous owing to the belief of the author that they serve no useful purpose, and may in fact be misleading, as it is very clear that there is no way t...

Questions And Problems

Chapter One 1. What three qualities had negotiable paper which distinguished it from simple contracts under the common law? 2. What is negotiability? Chapter Two 3. Define a promissory not...

Questions And Problems. Part 2

50. The R. T. Company gave the following note in payment for goods purchased: Albany, N. Y., June 1, 1920. $7,500. Three months after date we promise to pay to order of A. B. Corporation Seventy...