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Popular Law Library Vol9 Bills And Notes, Guaranty And Suretyship, Insurance, Bankruptcy | by Albert H. Putney



bills, notes, guaranty, suretyship, insurance, bankruptcy, law, courts, society

TitlePopular Law Library Vol9 Bills And Notes, Guaranty And Suretyship, Insurance, Bankruptcy
AuthorAlbert H. Putney
PublisherCree Publishing Company
Year1908
Copyright1908, Cree Publishing Company
AmazonPopular Law-Dictionary
-Twenty-Sixth Subject. Bills And Notes. Chapter I. Introductory. Section 1. The Law Merchant
The law merchant, or the lex mercatoria, was a special system of laws governing merchants and mercantile transactions, which was in force during the latter half of the medieval period of history, no...
-The Law Merchant. Continued
The same principle was, two years afterwards, recognized in an anonymous case (but believed to be Milton's Case, vide 1 Mod., 286), in the exchequer, reported in Hardres, 485 Mich., 20 Car. II (1668)...
-Section 2. Bills And Notes
Bills of exchange are undoubtedly of Italian origin,3 and were first used about the beginning of the thirteenth century.4 The use of these instruments was rapidly spread throughout all Western Europe ...
-Chapter II. Negotiable Instruments. Section 3. Bills Of Exchange
A bill of exchange is an unconditional order in writing for the payment of a certain sum of money absolutely and at all events.1 Bills of exchange are either inland or foreign. An inland bill of excha...
-Section 4. The Order
The most essential characteristic of a bill of exchange is the order to pay. No particular words are necessary, but there must be an absolute order to pay.2 There must be something more than the askin...
-Section 5. Promissory Note
A promissory note is an unconditional promise in writing for the payment of a certain sum of money absolutely and at all events.5 There are only two original parties to a promissory note, the maker (w...
-Section 6. Essentials Of Bills And Notes
Although bills and notes differ from each other in the nature of the contract created by each,6 the law governing each is in most of its essentials the same. The common essential characteristics of th...
-Section 7. Certainty Of Terms
One of the most striking characteristics of the laws governing bills and notes is the necessity for certainty in the terms of the contracts. First of all there must be certainty of payment. The order ...
-Section 8. Necessity For Payment In Money
Except as modified by statutory provisions, bills of exchange and promissory notes must be for the payment of money only. Instruments ordering or promising the payment of a certain amount in specifi...
-Section 9. Negotiability
The most striking characteristic of both bills and notes at the present day is their negotiability. This quality, however, did not exist at first.20 16 King vs. Hamilton, 12 Fed Rep., 478. 17 Southe...
-Section 10. Consideration
Between the immediate parties a consideration is as necessary in the case of a bill or note as in the case of any other kind of contract.29 One who signs or indorses a note after it has been negotiate...
-Section 11. Delivery
No contract is made and no rights are created upon a bill of exchange or promissory note until its delivery.33 The delivery of such bill or note is included in its making.34 Until delivery a bill or n...
-Section 12. Days Of Grace
Days of grace are days added to the nominal time of payment of all bills or notes except those impliedly or expressly payable on demand, and are computed by excluding the day of date and including th...
-Chapter III. Acceptance Of Bills Of Exchange. Section 13. In General
The acceptance of a bill of exchange is an agreement generally on the part of the drawee, but sometimes on the part of some other party, to pay the bill absolutely according to its tenor, or according...
-Section 14. Liability Of Acceptor And Drawer
The drawer of a bill is under no legal obligation to accept the bill, even if he is indebted to the drawer to the amount of the bill, or has funds of the drawer in his possession to that amount,3 unle...
-Section 15. Who May Accept
Except in the case of an acceptance supra protest, the acceptance must be made by the drawee of the bill, and acceptance by any other person is not permitted under the law merchant.18 An acceptance by...
-Section 16. Acceptance, How And When Made
An acceptance may be made either in writing or orally. If in writing, it is held that any form of words which do not in themselves negative the request of the bill should be treated as a valid accepta...
-Section 17. Acceptance Supra Protest
An acceptance supra protest, or for honor, is an acceptance of a bill after protest, by a stranger to the bill, for the benefit of all subsequent parties, and for the protection of the credit of some ...
-Chapter IV. Indorsements. Section 18. In General
In its most general and literal signification, an indorsement is an incidental or subsidiary writing upon the back of a paper or document to the contents of which it relates or pertains. In Commerci...
-Section 19. Method Of Indorsement
The proper and ordinary method of indorsement is by writing upon the back of the instrument;4 an indorsement, however, may be made on the face of the note.5 In case of two indorsements on opposite end...
-Section 20. Forms Of Indorsement
An indorsement in blank is one where the indorser merely writes his name on the instrument. Such an indorsement renders the instrument payable to whoever may hold it.17 A bill or note indorsed in blan...
-Section 21. Dual Character Of Contract Of Indorsement
The contract of indorsement (except in a few special instances elsewhere discussed) is in reality a double contract. There is first an executed contract operating to transfer to the indorsee such titl...
-Section 22. Anomalous Indorsements
An anomalous indorsement is treated in a section by itself for the reason that it is not strictly an indorsement, but in reality more nearly a guaranty. This form of indorsement arises where the indor...
-Chapter V. Liabilities Of Parties. Section 23. In General
The liabilities of the drawer and acceptor of a bill have already been considered.1 The liabilities of the other parties to bills of exchange and promissory notes will be taken up in the following sec...
-Section 24. The Maker Of A Promissory Note
The contract of the maker of a promissory note is the simplest of all the various contracts of the different parties to bills of exchange or promissory notes. The maker of a note is the party primaril...
-Section 25. Liability Of Indorsers
The modern doctrine as to the liability of indorsers is a comparatively recent development in the law. The principle that the indorser of a bill of exchange may be held liable thereon when the paper...
-Section 26. Indorser Without Recourse
An indorser without recourse is liable only on the warranties held to be made by all transferers,13 and on his misrepresentations.14 ...
-Section 27. Liability Of Accommodation Parties
The accommodation party to a bill or note may hold the position either of maker, drawer, or indorser. To all persons except the person accommodated the accommodation maker or indorser is liable to the...
-Chapter VI. Transfer Of Negotiable Instruments And The Rights Of Bona Fide Holders For Value. Section 28. Transfers
The transfer of a bill or note is either the assignment or devolution of the right to its enforcement.1 The four methods of transfer are: (1) by assignment; (2) by operation of law; (3) by indorsement...
-Section 29. Validity Of Bills Or Notes Between
Immediate Parties. As between the immediate parties to any bill or note, any defense can be set up which would invalidate any ordinary contract. ...
-Section 30. Bona Fide Purchasers For Value
The above rule does not apply in the case of remote parties. A bona fide purchaser for value may hold a bill or note free from a defense which might have been set up against a prior party. To be a bo...
-Section 31. The Valuable Consideration
The holder of a bill or note, to take it free from defenses, must have given something of value for it. 3 Norton on Bills and Notes, Sec. 88. 4 See Chapter IV (Courts And Procedure Therein). The ex...
-Section 32. Notice
In order to constitute a person a bona fide holder for value, he must in addition to having acted in good faith, and having given a valuable consideration, have taken without notice of the existing de...
-Section 33. Overdue Paper
The doctrine of bona fide holders for value only applies to negotiable instruments before their maturity. 11 Sumwalt vs. Ridgely, 20 Md., 107; Mansfield vs. Corbin, 2 Cush. (Mass.), 151. 12 Trettel ...
-Chapter VII. Presentment And Protest. . Section 34. Presentment In General
There are two presentments to be made by the holder of a bill of exchange, the presentment for acceptance and the presentment for payment. The former is properly made any day before the day of maturit...
-Section 35. Essentials Of Presentment For Acceptance
In connection with the subject of presentment for acceptance it is necessary to consider by whom and to whom presentment should be made; the place of presentment; and the manner of presentment; the ti...
-Section 36. Presentment For Payment
Anyone who is a bona fide holder of a promissory note, or a bill of exchange, may present it for payment on the maturity of the paper. But the possession of paper by one person which is unindorsed, wh...
-Section 37. When The Maker Of A Note Or An Acceptor Of A Bill Is Dead
When the person primarily liable on a note or bill is dead, as the maker of a note, or the acceptor of a bill, then presentment for payment should be made to the personal representative of deceased ma...
-Section 38. Effect Of Failure To Present A Bill Or Note For Payment
Briefly it may be stated that a failure to present a promissory note or a bill of exchange for payment at the proper place on the day of maturity will discharge the persons secondarily liable on the p...
-Section 39. Notice Of Dishonor
If the holder of the negotiable paper has presented the same for payment, and it has been dishonored, the duty is then on the holder to give notice of the dishonor to those who are secondarily liable ...
-Section 40. How The Notice Should Be Given
The notice may be given either orally or in writing and should be given to any person upon whom the holder wishes to fix a liability; he may, therefore, notice all or anyone of the indorsers. The noti...
-Section 41. What The Notice Should Contain
Where the notice is oral or written, it should be sufficient to apprise the person to be charged of the default in payment of the particular paper in question. Where the notice is given verbally less ...
-Section 42. Protest
A foreign bill of exchange that has been dishonored must be regularly protested as a preliminary to the sending out of the notice of dishonor; therefore its presentment must be made by one who is a no...
-Section 43. Excuses For Failure To Present Or To Give Notice
While it is a strict rule of law that a note or bill must be presented for payment on the day of maturity, and while the law will also demand that the rules of notice or dishonor and protest be rigidl...
-Chapter VIII. Defenses To Bills And Notes. Section 44. Classification Of Defenses
The defenses interposed by a party to a bill or note in a suit brought by a holder against him are commonly of two classes: (a) Real - or those which grow out of some defect inherent in the instrume...
-Section 45. Incapacity Of Defendant To Make The Instrument
The general principle is that the incapacity of the defendant to make the instrument is a real defense, and consequently that it can be successfully maintained even against a bona fide holder for valu...
-Section 46. Bills And Notes Declared Void By Statute
In some cases bills and notes are declared void by statute. An illustration of such a prohibition on the degree of understanding possessed by the party sought to be charged. A man of weak mind, if not...
-Section 47. Forgery And Alteration Of Instrument
A forged instrument, not being the contract of the party alleged to have made it, can, of course, confer no rights upon any person, with the single exception that the alleged maker may become liable t...
-Section 48. Fraud And Duress
Fraud and duress are both personal defenses to a bill or note and cannot be set up against bona fide holders for value.10 In the case of Valentine vs. Lunt,11 the Court said on this point: 6 See Stat...
-Section 49. Failure Of Consideration
A negotiable instrument, like all other contracts, requires a consideration to support it. A consideration is presumed in the case of a negotiable instrument, 'but such presumption may be rebutted. Wa...
-Section 50. Payment And Discharge Of Instrument
The payment of a negotiable instrument will always be a good defense between the immediate parties; before maturity, however, it will not be a defense against a purchaser for value who takes without n...
-Chapter IX. Checks. Section 51. Definition
A check is a draft or order on a bank or banker, purporting to be drawn on a deposit of funds, for the payment, at all events, of a certain sum of money to a certain person therein named, or to him o...
-Section 52. Negotiability
A check is not strictly a bill of exchange,3 but closely resembles an inland bill of exchange, payable on demand. It is governed by the same rules in relation to transfer, indorsement and negotiabilit...
-Section 53. Liability Of Banks
A check gives the payee no rights against the bank upon which it is drawn. The bank is under no liability to the payee for refusing to pay the check, even when the bank holds funds of the maker. In su...
-Section 54. Presentment, Protest And Notice As To Checks
In general, the rules in force as to presentment, notice and protest of checks are the same as in the case of bills of exchange and promissory notes.5 But there is in this connection, this distinction...
-Chapter X. The Uniform Negotiable Instrument Law. Section 55. History Of The Act
The following history of the Uniform Negotiable Instrument Law is taken from Street's Foundation of Legal Liability:1 Judge M. D. Chalmers published his Digest of the English Law of Bills, Notes and...
-Uniform Negotiable Instruments Act. Article I. - Form and Interpretation
[Negotiable instrument must conform to what requirements.] 1. An instrument payable in money, to be negotiated, must conform to the following requirements: 1. It must be in writing and signed ...
-Uniform Negotiable Instruments Act. Form and Interpretation. Continued
[Date deemed date.] 11. When the instrument or an acceptance or any indorsement thereon is dated, such date is deemed prima facie to be the true date of the making, drawing, acceptance or indor...
-Article I - Consideration
[Consideration presumed.] 24. Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become...
-Article III. - Negotiation
[Negotiation - how completed.] 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...
-Article IV. - Rights of the holder
[Holder may sue in own name.] 51. The holder of a negotiable instrument may sue thereon in his own name and payment to him in due course discharges the instrument. [Holder in due course define...
-Article V. - Liabilities of parties
[Engagements of maker.] 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 capacity to ...
-Article VI. - Presentment for Payment
[Presentment, when necessary.] 70. Presentment for payment is not necessary in order to charge the person primarily liable on the instrument except in case of bank notes; but if the instrument ...
-Article VII. - Notice of Dishonor
[Notice of dishonor must be given drawer and each indorser.] 89. Except as herein otherwise provided, when a negotiable instrument has been dishonored by non-acceptance or nonpayment, notice of...
-Article VIII. - Discharge of Negotiable Instruments
[How discharged.] 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...
-Title II. - Bills Of Exchange. Article I. - Form and Interpretation
[Bill of exchange defined.] 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 whom it is a...
-Article II. - Acceptance
[Acceptance must be in writing and unconditional.] 132. 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 a...
-Article III. - Presentment for Acceptance
[When presentment required.] 143. Presentment for acceptance must be made: 1. Where the bill is payable after sight, or in any other case where presentment for acceptance is necessary in order...
-Article IV. - Protest
[Protest of foreign bill.] 152. Where a foreign bill appearing on its face to be such is dishonored by non-acceptance, it must be duly protested for non-acceptance, and where such a bill which ...
-Article V. - Acceptance for Honor
[Acceptance by third party for honor.] 161. Where a bill of exchange has been protested for dishonor by non-acceptance, or protested for better security, and is not overdue, any person not bein...
-Article VI. - Payment for Honor
[Any person may pay supra protest for honor.] 171. Where a bill has been accepted for non-payment, any person may intervene and pay it supra protest for the honor of any person liable thereon o...
-Article VII. - Bills in a Set
[The whole of the parts of a bill drawn in a set constitute one bill.] 178. Where a bill is drawn in a set, each part of the set being numbered and containing a reference to other parts, the w...
-Title III. - Promissory Notes And Checks. Article I
[What is a negotiable promissory note.] 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 make...
-Title IV. - General Provisions. Article I
[Title of act.] 190. This act shall be known as the Negotiable Instrument Law. [Meaning of words used in act.] 191. In this act, unless the context otherwise requires: Acceptance mea...
-Twenty-Seventh Subject. Guaranty And Suretyship
By Shelley B. Neltnor, D. C. L. Professor Of The Law Of Sales, Agency And Negotiable Instruments, At The Illinois College Of Law, Member Of The Chicago Bab. ...
-Chapter I. Nature Of The Contract. Section 1. The Contract In General
The contract of suretyship and the contract of guaranty, which latter is merely a subdivision of the suretyship contract, is of peculiar interest, inasmuch as the contract is always an express one, an...
-Section 2. Origin And Essentials Of The Contract
The surety's contract is one of the oldest known to the law; just how old this kind of contract is, it seems impossible to say, except that its origin is of such an ancient date, and some of its chara...
-Section 3. The Principal
The one originally obligated to the creditor for his own debt is called the principal, or the principal debtor, and since the principal debtor is so closely connected with the surety's contract with t...
-Section 4. The Surety
Judge Cooley, in the case of Smith vs. Sheldon,1 says: A surety is a person who, being liable to pay a debt or perform an obligation, is entitled, if it is enforced against him, to be indemnified by ...
-Section 5. Distinction Between A Surety And A Guarantor
Although a surety and a guarantor are both parties who make an express agreement to bind themselves for the performance of an act or the fulfillment of an obligation or duty of another, the distinctio...
-Section 6. The Liability Of The Surety
It is the general rule, that the liability of a surety or a guarantor cannot be extended by implication or construction beyond the precise terms of their contract.8 The above rule is of universal app...
-Section 7. The Co-Surety
Parties who become liable for the same debt of another person, contracting with the same obligee, are co-sureties, and it is not necessary that they become sureties for the debt at the same time, as t...
-Section 8. The Grantor Of Mortgaged Property
It is a general rule of law that the grantee of mortgaged premises, who agrees to assume the mortgage, becomes the principal debtor for the payment of the mortgage, and that the grantor of the premise...
-Section 9. Pledging Or Mortgaging Property To Secure Debt Of Another
Property itself may be said to occupy the position of a surety, where it is pledged by the one owning the same, as security for the default of another person.18 Where one member of a partnership pledg...
-Section 10. Partners Assuming Partnership Debt
In the case where certain members of a partnership firm assume the partnership debts and continue the business on the retirement of one of the members, this does not release the retiring member from t...
-Section 11. Joint Contracts
It is the general rule that if one is jointly liable for the payment of a debt with the principal, the contract is not within the statute of frauds. Holding that if the promise is joint, that the prom...
-Chapter II. Parties To The Contract. Section 12. Who May Become A Surety Or A Guarantor
In general, it may be stated that anyone who has legal capacity to enter into a contract, may bind himself on his contract to answer for the debt, or default of another, and in general it may be said ...
-Section 13. Infants As Sureties
Since the rule of law has been changed, so that the accepted understanding is, that an infant's express contracts are to be now considered as voidable, and not void contracts, it may be said that the ...
-Section 14. Married Women As Sureties
The common law rule was that a married woman could make no contracts, except where she contracted in reference to her own separate estate. As it was the usual rule that her fortune or estate vested in...
-Section 15. Insane Person As Surety
One who is of unsound mind, cannot bind himself upon a contract of suretyship, even though the creditor acted in good faith in entering into the contract, and was not aware of the fact of insanity in ...
-Section 16. Partnerships And Corporations As Sureties
A partnership is a proper promissor in a contract of suretyship, provided the contract comes within the scope of the business of the partnership, or is expressly joined in, by all the members of the p...
-Section 17. Attorneys-At-Law As Sureties
Sometimes by statute, an attorney-at-law may be prohibited from acting as a surety or signing a bond as surety for his client, but the disability simply goes to the penalty, usually, for the violation...
-Section 18. Surety Under Duress
Following the general rule of contract law, duress avoids the contract, where a surety becomes such by reason of being compelled to sign under duress. It is the better rule too, that duress practiced ...
-Section 19. Fraud In The Contract
Fraud practiced on the surety by the creditor, will make the contract voidable, so fraud practiced on the surety by the principal debtor with the knowledge of the creditor will likewise avoid the cont...
-Section 20. Guaranty And Surety Companies
A great part of the surety business is now sought for and managed by incorporated companies, and most of the states have by statute opened the way for the creation and operation of corporations transa...
-Chapter III. Making The Contract. Section 21. Consideration
The contract of suretyship is no exception to the rule of law that every contract requires a consideration to support it. Where the surety's contract is made contemporaneously or concurrently with the...
-Section 22. Delivery
Where the contract of suretyship takes the form of a bond, or in any case where the contract is under seal, delivery and acceptance of the bond is required to complete the contract and to put the bond...
-Section 23. Imperfect Or Incomplete Instrument
It is a general rule of law that where the promissor in suretyship puts the written contract in the hands of the principal, and authorizes him to fill the blanks, the surety will be bound by the acts ...
-Section 24. Surety Who Binds Himself As Principal
Where one, who in fact is a surety on a contract, by express terms binds himself as a principal, by naming himself as a principal, he will be liable as such, and he can claim none of the rights of a s...
-Section 25. Construction Of The Contract
Following the general rule that suretyship contracts are to be strictly construed, and that the liability of the surety shall rest on the express language used, and that the liability shall not be inc...
-Chapter IV. Liability And Rights Of Surety. Section 26. The Extent Of The Surety's Liability
The meaning of the surety's contract having been determined, it remains for the court to say whether a strict construction in favor of the surety should be given the contract, or whether the contract ...
-Section 27. Surety May Be Sued Before Principal - When
When the surety's contract or the guarantor's contract is the same as the principal's, he may be sued before the principal is sued, and as soon as the principal is in default, because the promissor in...
-Section 28. Surety Not Liable Beyond Penalty Of His Bond
Another example of strict construction of the surety's contract is in the holding that the amount named in the surety's bond is the maximum sum that could be recovered in a suit instituted on the bond...
-Section 29. Instances Where Surety Not Liable
Where a surety's obligation is to answer for the acts or obligations of several persons he will not be liable for the act of one of the several persons alone.11 So a surety whose liability is limited ...
-Section 30. When Surety May Terminate His Liability By Notice
It is the general rule that the surety once he has become such cannot terminate his contract by giving notice to the obligee that he will not thereafter be liable further on the contract. This axiomat...
-Section 31. In General, What Things Will Discharge The Surety
It may be first stated generally, that whatever discharges the principal will likewise discharge the surety, and it follows that a release of the principal debtor by the creditor would also release th...
-Section 32. Illustration Of Discharge By Material Alteration
Changing the date in a note only one day, without the surety's consent,was held to be a material alteration, even though the change was made to express the real intention of the parties. This case is ...
-Section 33. Alteration Does Not Always Discharge The Surety
Not every alteration of, or addition to, a written instrument operates to release the surety. The Indiana Court has held, that in a case where a guarantor executed an instrument reading: We hereby gu...
-Section 34. The Creditor's Fraud
If the creditor makes a false representation of fact concerning his contract relation with the debtor, which materially affects the transaction had with the surety, and it is the inducement of the sur...
-Section 35. Rights And Remedies Of A Surety Against The Creditor
What is said under this heading might be included in a discussion of defenses that are available to the surety on his contract with the creditor. As additional defenses it may be mentioned, first, the...
-Section 36. Rights And Remedies Of Surety Against The Principal
If the principal debtor defaults on his contract, thereby making the surety liable, and the surety makes payment of the debt that he is so bound to pay, the law gives the surety, immediately on his pa...
-Section 37. The Rights And Remedies Of A Surety As To Co-Surety
Where there is more than one surety obligated for the debt of the principal, the creditor may proceed to collect all of the debt from one of the sureties only. This being true, and since the equitable...
-Section 38. When Surety's Act Discharges Co-Surety From Contribution
It is the rule that where one surety obtains security for his indemnity before he became bound on his obligation, or wherever indemnity obtained by him would inure to his co-sureties, he, the surety, ...
-Section 39. In What Proportion Co-Surety Bound To Make Contribution
In an action at law, a surety can only recover of his co-sureties, solvent or insolvent, an aliquot part of the debt based on the whole number of sureties. This is the rule where the sureties are all ...
-Section 40. The Equitable Right Of Subrogation
The application of the doctrine of the equitable principle of subrogation is a frequent one. The rule is stated by the Illinois Court as follows: It seems to be a well settled principle in equity tha...
-Section 41. Surety Subrogated To Lien Of Judgment Against Principal
Prior to the passage of the Mercantile Law amendment,63 the holding in England was that the payment of a judgment, even by a surety, extinguished the judgment. But by this act the right was given to t...
-Section 42. Conventional Subrogation
Equitable subrogation is to be distinguished from conventional subrogation which arises when the surety is substituted in the place of the creditor, by agreement. This latter kind of subrogation may g...
-Section 43. Equitable Contribution
Among the remedies allowed to the surety, that of equitable contribution must not be overlooked. A leading case on this principle is that of Wolmer-hausen vs. Gullick,66 reported as late as 1893. In t...
-Chapter V. Liability And Rights Of The Guarantor. Section 44. Contract Of Guaranty
The distinctions between the contract of the surety and the guarantor have already been observed in section four of this text, and it will be remembered that the guarantor's contract is both a collate...
-Section 45. Classification Of Guaranties
Guaranties are said to be either special or general, in accordance with language used by the guarantor in offering himself as a guarantor. The guaranty is considered as special where, for instance, th...
-Section 46. Subject Continued. Absolute And Conditional Guaranties
If the promissor's liability depends upon the performance of some other event, or the meeting of some other contingency, other than the performance by the principal of his contract, the guaranty is sa...
-Section 47. Consideration
Since the guarantor's contract is usually collateral, and secondary to the principal's, a separate consideration is required to support the same. The consideration may move from either the principal, ...
-Section 48. Notice To Guarantor Of Principal's Default
Where the guaranty is absolute, there is no ground for the guarantor's plea of a right to demand notice of the principal's default. By the terms of his contract the possible default is fixed, and his ...
-Section 49. Liability Of The Guarantor
The liability of the guarantor having been fixed, either by default of the principal in the case of an absolute guaranty, or by the creditor meeting the conditions of the conditional guaranty, then th...
-Section 50. Is A Guaranty Of A Note Negotiable?
Where the guaranty is general, that is, addressed to all persons, any person who acts upon it may enforce it. This principle has already been stated, the law creates the privity of contract between th...
-Chapter VI. Bonds And Bail. Section 51. Bonds In General
A bond is an instrument in writing and under seal, binding the obligors to the obligee, in accordance with the recitals of the terms of the contract, and containing a defeasance clause showing the lim...
-Section 52. Bonds For The Fulfillment Of Private Obligations
Bonds given for the fulfillment of private obligations, are purely the result of the contract that the individuals concerned, may make. If it is a bond, for instance, given to save harmless some certa...
-Section 53. Bonds Of Public Officers
The statute, or the law that creates an office, usually names the duties appertaining to the office. The official himself has no power to change the duties of his office, or to compel the State to acc...
-Section 54. Bonds Of Persons Given In Legal Proceedings
There are many situations that arise or present themselves in the course of the administration of justice where the law demands that one of the parties, before the doors of justice are opened to him, ...
-Section 55. Bail Bonds
Bail bonds are given to secure the appearance of the person, usually styled the defendant, at the time and place named, when the defendant is to be surrendered to answer the charge for which he was or...
-Twenty-Eighth Subject. Insurance. Chapter I . Nature And History Of Insurance. Section 1. Definitions
The following are some of the best recent definitions of insurance: Insurance is a contract by which the one party, in consideration of a price paid to him adequate to the risk, becomes security to t...
-Section 2. Theory And Purpose Of Insurance
The purpose of insurance is so far as possible to do away with accidental losses by distributing among a number, all of whom were exposed to a common peril, the loss which has fallen upon one of them....
-Section 3. Forms Of Insurance
The principal forms of insurance are fire insurance, life insurance, and marine insurance. The following minor forms of insurance are also in existence at the present time - accident insurance, benefi...
-Section 4. History Of Insurance - Marine Insurance
The oldest form of insurance was that of marine insurance. This seems to have originated in Rhodes, to have been adopted by the commercial cities of Italy and by the towns of the Hanseatic League betw...
-Section 5. History Of Insurance - Fire Insurance
Small local associations for mutual aid in case of loss by fire appear to have existed in England at a very early time. The first regular office for this purpose of insuring against loss by fire was e...
-Section 6. History Of Insurance - Life Insurance
The first attempt to establish life insurance was in 1706 in England and in 1769 in America. Life insurance has only assumed large proportions in this country since the Civil War. ...
-Section 7. The Contract Of Insurance
Not only does the contract of insurance present many contrasts to contracts of other kinds, but the contract of fire insurance and marine insurance differ from each other in many respects. In the next...
-Chapter II. Contract Of Insurance. Section 8. Parties
A contract of insurance, like other contracts, can only be entered into by people sui juris. Either an individual or a corporation may be an insurer. In most states at the present time there are statu...
-Section 9. Making A Contract
The forms of requisites for making a contract do not differ greatly from those in the case of other contracts. A contract of insurance does not come within the provisions of the Statute of Frauds. Suc...
-Section 10. The Consideration
In a contract of insurance, as in all other contracts, there must be a consideration from both parties to contract. In the case of Phoenix Life Insurance Co. vs. Roddin,3 the Supreme Court of the Unit...
-Section 11. Premiums
A premium is a sum of money paid by the insured in consideration for the protection furnished by the insurer. The payment of a premium is not always a necessary prerequisite for the attaching of the l...
-Section 12. Consequences Of Non-Payment Of Premiums
The non-payment of a first premium will prevent a contract from going into effect unless such prepayment is waived, as shown in the last section. The nonpayment of a subsequent premium will not affect...
-Section 13. Excuses For Non-Payment Of Premiums
The following are the recognized excuses for failure to pay premiums when due: War, in some jurisdictions. Insolvency of the insurer. Refusal of tendered premium. Any wrongful act of insurer preventin...
-Section 14. Dues And Assessments In Mutual Benefit Associations
The dues and assessments levied by the various mutual benefit insurance societies differ in many respects from the premiums of the regular insurance companies. Dues are paid to cover the ordinary runn...
-Section 15. Concealment By Insured
The contract of insurance is one where the highest degree of good faith is required from the parties. The exercise of such good faith requires that each party shall disclose to the other all material ...
-Section 16. Warranties And Representations
Contracts of insurance may be forfeited or avoided by the breach or falsity of warranties contained therein, or of the representations of the insured which are collateral to the contract. A warrant...
-Section 17. Insurance Agents
An insurance agent is an agent employed by an insurer, usually an insurance company, to perform some act or acts in furtherance of the business of his principal. In a narrower but more familiar sense...
-Section 18. Waivers And Estoppels
The terms waiver and estoppel are generally taken as synonymous in the field of insurance law. A distinction, however, is to be noted between the two terms. A waiver is the voluntary, express or impli...
-Chapter III. Marine Insurance. Section 19. In General
Marine insurance, as has already been stated, was the earliest, and for a considerable period the only form of insurance. The contract of marine insurance is strictly one of indemnity ...
-Section 20. Insurable Interest
The insurer must have an insurable interest in the property which he insures.1 Any person has an insurable interest in any property, who would suffer loss by its destruction.2 In the case of Lucena v...
-Section 21. Forms Of Marine Insurance Policies
Marine insurance policies are classified as interest or wager policies, valued or open, and time or voyage. An interest policy is one where the insurer has a substantial interest in the property insu...
-Section 22. Risks And Losses Covered
Underwriters are liable for only such losses as are occasioned by some peril mentioned in the policy. It is only losses and damages of an extraordinary character that are covered,'11 and not consequ...
-Section 23. General Average
General average is a principle of the law of marine insurance, not found in other branches of insurance, by which where a ship or cargo is sacrificed for the general good, the owners of the property s...
-Chapter IV. Fire Insurance. Section 24. The Property Insured
Any property, either real or personal, may be the subject of insurance. The property must be in existence at the time when the contract takes effect.1 An insurance contract, however, may be made to ap...
-Section 25. Insurable Interest
As in marine insurance, the insurable interest must exist at the time of the loss, but not necessarily at the time of the taking out of the policy. A creditor has an insurable interest in the estate ...
-Section 26. Construction. Although Fire Insurance Policies, Like All Other Forms Of Contracts, Are To Be Construed According To The Intention Of The Parties, Still All Doubts Will Be Construed In Favor Of The Insured. This Applies Even In The Case Of Standard Policies, I. E. Policies Which Are Fixed By State Statutes.7 The Reason For This Favor Shown To The Insured Is On Account Of The Opportunity Afforded To Insurance Companies To Take Advantage Of The Insurer By Inserting Ambiguous Terms Which Will Bear Very Heavily On The Insurer
7 The act (Chapter 488, Law 1886), providing for a uniform policy known as the 'standard policy' and which makes its use compulsory upon insurance companies, marks a most important and useful advance...
-Section 27. Temporary Breach Of Condition
It has been held by some courts that a temporary-breach of a condition subsequent, which does not contribute to a subsequent loss, merely suspends the policy instead of terminating it. This view, whic...
-Section 28. Changes In Position Or Condition Of Insurer Or Property
Insurance policies often contain a condition that a change of interest, title, or possession shall work a forfeiture of the policy. This condition is intended to protect the insurer from any conting...
-Chapter V. Life Insurance. Section 29. Nature Of The Contract
The theory of a life insurance contract differs very materially from that of any other kind of insurance contract. Although in an early case an attempt was made to reconcile the contract of life insur...
-Section 30. Who May Insure
A person can always insure his own life to any extent that he sees fit,4 and such insurance may either be for the benefit of his estate, or for the benefit of any person or persons whom he may designa...
-Section 31. Forms Of Life Insurance Policies
The various kinds of life insurance policies have been thus described by a recent writer:7. The kinds of life policies are limited in number only by the ingenuity of the actuaries and managers of th...
-Twenty-Ninth Subject. Bankruptcy Law. Bankruptcy. Introduction
Bankruptcy law is entirely statutory, no common law bankruptcy being recognized in this country. The respective powers of the Federal and State governments to pass bankruptcy laws have already been di...
-Chapter I. Definitions
An Act to Establish a Uniform System of Bankruptcy Throughout the United States. Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled: Sect...
-Chapter II. Creation Of Courts Of Bankruptcy, And Their Jurisdiction
Sec. 2. That the courts of bankruptcy as hereinbefore defined, viz., the district courts of the United States in the several States, the supreme court of the District of Columbia, the district courts ...
-Chapter III. Bankrupts
Sec. 3. Acts of Bankruptcy. - a Acts of bankruptcy by a person shall consist of his having (1) conveyed, transferred, concealed, or removed, or permitted to be concealed or removed, any part of his p...
-Bankrupts. Part 2
f The net proceeds of the partnership property shall be appropriated to the payment of the partnership debts, and the net proceeds of the individual estate of each partner to the payment of his indivi...
-Bankrupts. Part 3
Sec. 10. Extradition of Bankrupts. - a Whenever a warrant for the apprehension of a bankrupt shall have been issued, and he shall have been found within the jurisdiction of a court other than the one ...
-Chapter IV. Courts And Procedure Therein
Sec. 18. Process, Pleadings, and Adjudications. - a Upon the filing of a petition for involuntary-bankruptcy, service thereof, with a writ of subpoena, shall be made upon the person therein named as d...
-Courts And Procedure Therein. Continued
f A certified copy of an order confirming or setting aside a composition, or granting or setting aside a discharge, not revoked, shall be evidence of the jurisdiction of the court, the regularity of t...
-Chapter V. Officers, Their Duties And Compensation
Sec. 33. Creation of Two Offices. - a The offices of referee and trustee are hereby created. Sec. 34. Appointment, Removal, and Districts of Referees. - a Courts of bankruptcy shall, within the terri...
-Officers, Their Duties And Compensation. Part 2
b Whenever a case is transferred from one referee to another the judge shall determine the proportion in which the fee and commissions therefor shall be divided between the referees. c In the event o...
-Officers, Their Duties And Compensation. Part 3
c The trustee shall, within thirty days after the adjudication, file a certified copy of the decree of adjudication in the office where conveyances of real estate are recorded in every county where th...
-Chapter VI. Creditors
Sec. 55. Meetings of Creditors. - a The court shall cause the first meeting of the creditors of a bankrupt to be held, not less than ten nor more than thirty days after the adjudication, at the county...
-Creditors. Continued
k Claims which have been allowed may be reconsidered for cause and reallowed or rejected in whole or in part, according to the equities of the case, before but not after the estate has been closed. 1...
-Chapter VII. Estates
Sec. 61. Depositories for Money. - a Courts of bankruptcy shall designate, by order, banking institutions as depositories for the money of bankrupt estates, as convenient as may be to the residences o...
-Estates. Part 2
d Whenever a person shall have been adjudged a bankrupt by a court without the United States and also by a court of bankruptcy, creditors residing within the United States shall first be paid a divide...
-Estates. Part 3
Sec. 68. Set-Offs and Counterclaims. - a In all cases of mutual debts or mutual credits between the estate of a bankrupt and a creditor the account shall be stated and one debt shall be set off agains...
-General Orders In Bankruptcy. Promulgated By The Supreme Court Of The United States
October Term, 1898. [75] In pursuance of the powers conferred by the Constitution and laws upon the Supreme Court of the United States, and particularly by the act of Congress approved July 1, 1898, ...
-General Orders In Bankruptcy. Part 2
VIII. Proceedings in Partnership Cases [83] Any member of a partnership, who refuses to join in a petition to have the partnership declared bankrupt, shall be entitled to resist the prayer of the pet...
-General Orders In Bankruptcy. Part 3
XVIII. Sale of Property [93] 1. All sales shall be by public auction unless otherwise ordered by the court. 2. Upon application to the court, and for good cause shown, the trustee may be authorized ...
-General Orders In Bankruptcy. Part 4
XXIII. Orders of Referee [98] In all orders made by a referee, it shall be recited, according as the fact may be, that notice was given and the manner thereof; or that the order was made by consent; ...
-General Orders In Bankruptcy. Part 5
XXXIV. Costs in Contested Adjudications [109] In cases of involuntary bankruptcy, when the debtor resists an adjudication, and the court, after hearing, adjudges the debtor a bankrupt, the petitionin...
-Questions. Bills And Notes
Chapter I Page 11. 1. What was the law merchant? Pages 12-19. 1. Give an outline of the history of its origin and development. Page 20. 1. What was the origin of bills and notes? Chapter II Pa...
-Questions. Guaranty And Suretyship
Page 131. 1. What is the form of the contract of the surety or the guarantor? 2. What is the general nature of the contract of suretyship? 3. Who are the parties to the contract? Page 132. 1. How...
-Questions. Insurance
Chapter I Page 201. 1. Define insurance. Page 202. 1. What is the theory of insurance? 2. What is the purpose of insurance? Page 203. 1. What are the principal forms of insurance? Page 204. 1....
-Questions. Bankruptcy
Page 257. 1. Who are included under the term bankrupts? Page 258. 1. What are the courts of bankruptcy in the United States? Pages 261-263. 1. What are the powers of courts of bankruptcy? Pages 2...
-Appendix A. Administrator's Bond
KNOW ALL MEN By THESE PRESENTS, That we, JOHN SMITH, PRINCIPAL, and JOHN JONES, and JAMES JONES, SURETIES, of the County of Cook and State of Illinois, are held and firmly bound unto the People of the...
-Bond Of Cashier
KNOW ALL MEN By THESE PRESENTS, That we, JOHN DOE and RICHARD ROE of Chicago, Illinois, are held and firmly bound unto JOHN ADAMS of Chicago, Illinois, in the sum of $5,000.00, to be paid to the said ...







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