In most of the states, statutes have been enacted changing the common-law rules in relation to assignments of choses in action. These statutes vary somewhat, so that it would be impracticable to attempt to set them out. In most states it is substantially provided that the assignee of a chose may sue the debtor in his own name in the same manner as the assignor might have done before the assignment. In some states the same result is accomplished by statutes requiring actions to be brought in the name of the "real party in interest." It may be said generally that the effect of the statutes is to put an assignment of a chose in action on the same footing at law as in equity. What we have said, therefore, in treating of assignments in equity, generally applies to assignments at law under the statutes.87
84 Stocks v. Dobson, 4 De Gex, M. & G. 15. See "Assignments," Dec. Dig. (Key-No.) § 85; Cent. Dig. §§ 11,9-151.
85 Ward v. Morrison, 25 Vt. 593; Murdoch v. Finney, 21 Mo. 138; Clod-felter v. Cox, 1 Sneed (Tenn.) 330, 60 Am. Dec. 157; White's Heirs v. Prentiss' Heirs, 3 T. B. Mon. (Ky.) 449; Judson v. Corcoran, 17 How. 612, 15 L. Ed. 231; Spain v. Brent, 1 Wall. 624, 17 L. Ed. 619; Laclede Bank v. Sehuler, 120 U. S. 511, 7 Sup. Ct. 644, 30 L. Ed. 704; In re Gillespie (D. C.) 15 Fed. 734; Methven v. Power Co., 66 Fed. 113, 13 C. C. A. 362; Graham Paper Co. v. Pembroke, 124 Cal. 117, 56 Pac. 627, 44 L. R. A. 632, 71 Am. St. Rep. 26; Township of Washington v. First Nat. Bank, 147 Mich. 571, 111 N. W. 349, 11 L. R. A. (N. S.) 471. See "Assignments," Dec. Dig. (Key-No.) § 85; Cent. Dig. §§ 11,9-151.
86 Muir v. Schenck, 3 Hill (N. Y.) 228, 38 Am. Dec. 633; Thayer v. Daniels, 113 Mass. 129; Kamena v. Iluelbig, 23 N. J. Eq. 78; Tingle v. Fisher, 20 W. Va. 497; Newby v. Hill, 2 Metc. (Ky.) 530; Ohio Life Ins. & Trust Co. v. Loss. 2 Md. Ob. 25: Mac-Donald v. Kneeland, 5 Minn. 352 (Gil. 283); Fortunate v. Patten, 147 N. Y. 277, 41 N. E. 572. Bee "Assignments" Dec. Dig. (Key-No.) § 85; Cent. Dig. §§ 149-151.
87 ALLEN v. BROWN, 44 N. Y. 228, Throckmorton Cas. Contracts, 327;
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It remains to mention a class of promises the benefit of which is transferable, under the law merchant, in such a way that the promise may be enforced by the transferee in his own name, without notice to the promisor, and under certain circumstances without risk of being met by many of the defenses which would have prevailed as against his transferror. These contracts are called "negotiable" instruments, for the reason that they may be transferred by "negotiation" as distinguished from "assignment." They include bills of exchange, promissory notes, checks, some classes of corporate bonds for the payment of money, and some other instruments. Most of these instruments are negotiable by the custom of merchants recognized by the courts. Some instruments are negotiable by statute. Promissory notes were put upon the same footing as bills of exchange by the statute of 3 & 4 Anne, c. 9, §§ 1-3, although this statute is generally regarded as only declaratory of the law.
Negotiation means transfer in the form and manner prescribed by the law merchant. If the instrument is payable to order, it is transferable by indorsement; if payable to bearer, by mere delivery.88 The usual form of indorsement is the signature of the indorser, with or without a direction to pay to a specified indorsee or to his order. If the indorsee is specified, the indorsement is necessary to the further negotiation of the instrument; but if the indorsement specifies no indorsee, the instrument becomes in effect payable to bearer, and may be further negotiated by delivery.89
The effect of negotiation is (1) to transfer the legal title to the transferee, so that he may sue upon the instrument in his own name; 90 and (2) if the transferee is a purchaser for value, before maturity of the instrument, and without notice of facts which would impeach its validity between antecedent parties, he may enforce payment, notwithstanding defenses (other than those which attach to the instrument itself and are good against all persons) which would have been good against his transferror or other prior parties.91 Notice of the transfer need not be given to the party liable. Consideration is presumed to be given until the contrary appears, although the burden of proof may be changed if it appears that there was fraud or illegality in the issue or subsequent negotiation of the instrument.92
Dakin v. Pomeroy, 9 Gill (Md.) 1; Doering v. Kenamore, 86 Mo. 588; Strong v. Clem, 12 Ind. 37, 74 Am. Dec. 200; Jordan v. Thornton, 7 Ark. 224, 44 Am. Dec. 546. See "Assignments," Dec. Dig. (Key-No.) §§ 1-3; Cent. Dig. §§ 1-5.
88 Norton, Bills & N. (3d Ed.) 200-206.
89 Norton, Bills & N. (3d Ed.) 105-118.
90 Norton, Bills & N. (3d Ed.) 207-215.
91 Norton, Bills & N. (3d Ed.) 216 et seq.
Negotiable instruments may be transferred by assignment as well as by negotiation, but in such case only the equitable as distinguished from the legal title is transferred, and the incidents of the transfer are substantially the same as in the case of the transfer of a mere chose in action, the assignee standing in no better position than his assignor.93 It would be beyond the scope of this book to go further into the law of negotiable instruments.