This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The law-merchant has long since ceased to be the law of a class,1 and its international character survives only in the fact that there is a greater resemblance as to mercantile transactions between the Anglo-American law and the law of the countries of western Europe than there is to other transactions. The law-merchant has been worked over and incorporated into Anglo-American aw.2
1 See Sec. 2236.
2 See Sec. 2269 et aeq. 3 See 112.
4 See Sec. 10 et seq.
5 "The law merchant, which is a branch of the law of nations." 4 Black Com 67.
See also, Davie9 on Impositions; Luke v. Lyde, 2 Burr. 882.
6 After the development of assumpsit there could be a declaration in assumpsit upon a bill of exchange between parties who were not merchants and the bill could be given in evidence, but there could not be a declaration upon the law of merchants. Eaglechild's Case, Hetly 167.
Indebitatus assumpsit would not lie against the acceptor of a bill of exchange. The proper action was a special action on the case upon the custom of merchants. Browne v. London, 1 Mod. 285.
7 "I remember when actions upon inland bills of exchange did first begin."
Buller v. Crips, 6 Mod. 20. See discussion in Bromwich v. Loyd, 2 Lutw. f. 1582.
See, The Early History of Negotiable Instruments, by Edward Jenks, 9 Law Quarterly Review, 70, and The Origins and Early History of Negotiable Instruments, by W. S. Holdsworth, 31 Law Quarterly Review, 12, 173, 376, 32 Law Quarterly Review, 20.
1 Woodward v. Rowe, 2 Keb. 105. The defense that the plaintiff was not a merchant but a gentleman was held to be insufficient because of "the suspicion which might increase amongst foreign merchants upon bills of exchange if persons who took upon themselves to draw such bills should not be liable to the payment thereof." Sarsfield v. Witherby, Carth. 82.
The law merchant is said to bind all mercantile transactions, whether between merchants or not. Cramlington v. Evans, 2 Vent. 307.
The incorporation of the law-merchant has lead to its localization. While the great body of the law-merchant remained the same in all Anglo-American countries, different rules on special questions grew up in different jurisdictions, and this divergence of view resulted in confusion in transactions between persons residing in different jurisdictions. In order to secure, in part, the former international character of the law-merchant, the Negotiable Instruments Law has been enacted in many states. This law was intended as a codification of the general principles of the law-merchant as applicable to negotiable instruments.3 The Negotiable Instruments Law was intended to supersede the inconsistent rules theretofore in force in each state in which it was enacted;4 and, accordingly, it was intended to change the pre-existing law of each state to that extent.5 It was intended to secure uniformity throughout all the states in which it was adopted,6 but this attempt has not met with complete success.7 It was not retroactive and it did not apply to negotiable instruments which took effect before it was adopted.8 The Negotiable Instruments Law is remedial and is to be construed liberally.9 It was not intended to be retroactive,10and it was not intended to apply to negotiable instruments which were executed and delivered before it was passed.11 In cases for which no provision is made by the Negotiable Instruments Law, the rules of the law-merchant are still in force.12
2Edie v. East India Company, 2 Burr. 1216; First National Bank v. McCullough. 50 Or. 508, 17 L. R. A. (N.S.) 1105, 03 Pac. 366 [citing, Woodbury v. Roberts, 59 Ia. 348, 44 Am. Rep. 685, 13 N. W. 312].
3 Parsons v. Utica Cement Co., 82 Conn. 332, 135 Am. St. Rep. 278, 73 Atl. 785; Wettlaufer v. Baxter, 137 Ky. 362. 26 L. R. A. (N.S.) 804, 125 S. W. 741.
4 National Bank of Commerce v. Bossemeyer, 101 Neb. 96, L. R. A. 1917E, 374, 162 N. W. 503.
5 National Bank of Commerce v. Bossemeyer, 101 Neb. 96, L. R. A. 1917E, 374, 162 N. W. 503; Haddock, Blanchard & Co. v. Haddock, 192 N. Y. 499. 19 L. R. A. (N.S.) 136, 85 N. E. 6S2; Potts v. Crudup, 48 Okla. 124, L. R. A. 1916B, 672, 150 Pac. 170; Columbian Banking Co. v. Bowen, Wis. 218, 114 N. W. 451.
6 Union Trust Co. v. McGintv, 212 Mass. 205, Ann. Cas. 1913C, 525, 98 N. E. 679; Rochefield v. First National Bank, 77 O. S. 311, 14 L. R. A. (N.S.), 842, 83 N. E. 392; Wisner v. First National Bank, 220 Pa. St. 21, 17 L. R. A. (N.S.) 1266, 68 Atl. 955.
7 Cedar Rapids National Rank v. Weber, 180 Ia. 966, L. R. A. 1918A 432, 164 N. W. 233; Holliday State Bank v. Hoffman, 85 Kan. 71, 35 L. R. A. (N.S.) 390, Ann. Cas. 1912D 1, 116 Pac. 239.
8 Parish v. Smith, 134 Ark. 511, 204 S. W. 415; Voris'v. Birdsall, - Okla. - , 162 Pac. 951.
9 Page v. Ford, 65 Or. 450. 45 L. R. A. (N.S.) 247, 131 Pac. 1013.
10 Cox v. Kirkwood, - Okla. - , 158 rac. 930; Voris v. Birdsall, - Okla.
, 162 Pac. 951.
For the purpose of this discussion only two of the general problems of the negotiable contract will be considered, and these are: (1) the elements which a contract must possess in order that it may be negotiable, including the extent to which the oral contract under which the negotiable contract was executed and delivered, is to be regarded as a part thereof; and (2) the effect of negotiability as distinguished from assignability.