(theoretically) their individual sovereignties, and, with respect to their municipal regulations, are foreign to each other. Thus, if a drawer and drawee reside in Kentucky, and the bill be payable in New Orleans, Louisiana, it is a foreign bill; though if it be drawn in Kentucky on a New Orleans merchant, and be payable in Kentucky, it would be inland.3 10. In the Federal courts of the United States, the decisions are sometimes in conformity with those of the State courts of last resort in respect to the liabilities of parties to bills and notes, but not uniformly. The 34th section of the judiciary act of 1789 provides that "the laws of the several States, except where the Constitution, treaties, or statutes of the United States shall otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts of the United States, in cases where they apply." But this section has been held to be limited in its application to the laws of the several States of a strictly local character, that is to say, to the positive statutes of the States, and their interpretation by the local tribunals, and the rights and titles to things having a permanent locality, such as real estate, and not to extend to questions of general commercial law. Therefore, where any controversy arises as to the liability of a party to a bill of exchange, promissory note, or other negotiable paper, in one of the Federal courts of the United States, which is not determined by the positive words of a State statute, or by its meaning as construed by the State courts, the Federal courts will apply to its solution the Warder v. Arell, 2 Wash. (Va.), 298; Brown v. Ferguson, 4 Leigh, 37; Buckner v. Finley, 2 Peters, 586; Lonsdale v. Brown, 4 Wash. C. C., 86, 153; Chenowith v. Chamberlin, 6 B. Monroe, 60; Duncan v. Course, 3 Const. R. (So. Car.), 100; State Bank v. Hayes, 3 Ind., 400; Warren v. Coombs, 20 Me., 139; Ticonic Bank v. Stackpole, 41 Me., 302; Phoenix Bank v. Hussey, 12 Pick., 483; Carter v. Union Bank, 7 Humph., 548; Carter v. Burley, 9 Ń. H., 558, Wells v. Whitehead, 15 Wend., 527; Todd v. Neal's Adm., 49 Ala., 266 Donegan v. Wood, 49 Ala., 242; contra, Miller v. Hackley, 5 Johns, 375, Van.. ness, J. 3 2 Buckner v. Finley, 2 Peters, 586. Amner v. Clark, 2 Cromp. M. & R., 468, general principles of the law merchant, regardless of any local decision.1 § 11. Whether or not a bill is foreign or inland, and by what laws the liabilities of parties to bills and notes are to be governed, may often be not sufficiently disclosed by the date of place on the instrument itself, as the courts of the several States, as of different countries, upon settled principles, do not take judicial notice of the divisions of foreign States into counties, towns, and cities. Thus, in England, the averment that a bill was drawn in Dublin was not considered equivalent to averring that it was an Irish bill. Abbott, C. J., said: "The framer of the declaration has not said that Dublin is in Ireland, and we can not assume it, whatever may be our belief on the subject"; and Bailey, J., said: "There may be a Dublin in America or Scotland." So the Supreme Court of Texas have held that they could not judicially know that a note payable in New Orleans was payable in Louisiana," or a bill dated there was drawn in Louisiana; or that a note dated "Philadelphia" was made in Pennsylvania. So in Missouri, as to New 1 5 Swift v. Tyson, 16 Peters, 1, Story, J., saying: "We have not now the slightest difficulty in holding that this section, upon its true intendments and construction, is strictly limited to local statutes and local usages of the character before stated, and does not extend to contracts and other instruments of a commercial nature, the true interpretation and effect whereof are to be sought, not in the decisions of the local tribunals, but in the general principles and doctrines of commercial jurisprudence. Undoubtedly, the decisions of the local tribunals upon such subjects are entitled to and will receive the most deliberate attention and respect of this court; but they can not furnish positive rules, or conclusive authority, by which our own judgments are to be bound up and governed. The law respecting negotiable instruments may be truly declared, in the language of Cicero, adopted by Lord Mansfield in Luke v. Lyde, 2 Burr. R., 882, 887, to be in a great measure, not the law of a single country only, but of the commercial world: "Non erit alia lex Romæ, alia Athenis, alia nunc, alia posthac, sed et apud omnes gentes, et omni tempore, una eademque lex obtinebit." Mercer County v. Hackett, I Wall., 96; Township of Pine Grove v. Talcott, 19 Wall., 667. See on this subject article in American Law Review for April, 1875, and Gelpcke v. Dubuque, 1 Wall., 175; Oates v. National Bank, 100 U. S. (10 Otto), 239; Railroad Co. v. National Bank, 102 U. S. (12 Otto), 14. Sce post, §§ 1525, 1526. 2 Kearney v. King, 18 E. C. L. R., 28. Andrews v. Hoxie, 5 Texas, 171. Cook v. Crawford, 4 Texas, 420, Orleans, the court would not take judicial notice that a bill dated there was foreign.1 § 12. It may be difficult sometimes to determine whether a bill is inland or foreign. Thus, suppose a Boston merchant, temporarily in the city of New York, were to draw his bill on a New York merchant, payable in New York, but were to date it in Boston, would it be an inland or a foreign bill? bill? In relation to innocent third parties, who have taken the bill in the belief that it was what its face imported, it would undoubtedly be held foreign. "As between the original parties and others having notice of the circumstances under which the bill was drawn, the question would be more doubtful; but we think it would, even then, be held to be a foreign bill, especially if it appeared that it was drawn in that form for no wrongful purpose, but only that the bill might conform to the drawer's usual course of business, and be what it would have been had he not happened to be at the time in New York. The converse of this has been decided."8 Such is the language of Professor Parsons on this question, which we adopt as a succinct and judicious view of the law.* § 13. If a bill be upon its face an inland bill, the fact that it was actually drawn and delivered in a foreign State will not divest it of its inland character. Thus, where a bill was drawn in Wisconsin, but dated East Fork, in Illinois, it was held in the latter State that it must be treated and considered as an inland bill. "Such was the intention and agreement of the parties, as shown on the face of the instrument. That it was competent for the parties, both being citizens of Illinois, to provide for their express agreement that it should be subject to and construed by 'Riggin v. Collier, 6 Mo., 568. 2 See chapter XXVII. on the Conflict of Laws, and Snaith v. Mingay, 1 Maule & S., 87; Lennig v. Ralston, 23 Penn. St., 137. Strawbridge v. Robinson, 5 Gilman, 470. 4 'I Parsons N. & B., 57. the laws of this State, is too well established by authority to admit of doubt."1 §14. The presumption is that a bill purporting to be drawn abroad was really so drawn. But evidence would be admissible to show that a bill purporting to have been drawn abroad was, in fact, drawn within the country where suit is brought, and is therefore void for want of a stamp required by the internal revenue laws of such country. But it has been recently held, in Massachusetts, that the maker or indorser of a note can not, as against the indorser in that State for value, before maturity and without notice, show that the note which was dated in Boston, with intent that it should be a Massachusetts contract, was actually made in New York, and, on account of illegal interest, was void under the usury laws of the latter State. SECTION III. THE EFFECT OF A BILL OF EXCHANGE; WHETHER OR NOT IT IS AN ASSIGNMENT. 15. As we have already seen, heretofore it was the policy of the common law to interdict the assignment of possibilities, rights, titles, and things in action, on the ground, as stated by Lord Coke, that "it would be the occasion of multiplying of contentions and suits, of great oppression of the people, and chiefly of terre-tenants, and the subversion of the due and equal execution of justice." Bills of exchange and promissory notes have long been recognized exceptions to this rule; and, by courts of equity, it has long been discredited, and assignments of a 1 Strawbridge v. Robinson, 5 Gilman, 472, Caton, J. * Abraham v. Dubois, 4 Camp., 269; Bire v. Moreau, 2 C. & P., 376 (12 E. C. L. R.); Jordaine v. Lashbrooke, 7 T. R., 601; Steadman v. Duhamel, 1 C. B., 888. See post, § 869 et seq. 'Towne v. Rice, 122 Mass., 67. 4 Coke's R., Part X, 48a. mere naked possibility or chose in action for valuable consideration have been held valid and effectuated by them.1 And courts of law, following in the footsteps of equity, now recognize and enforce such assignments in suits brought in the name of the assignor for the benefit of the assignee, it being necessary for the assignee to assert his rights at law in that form, as the want of privity of contract between himself and the debtor is considered to stand in the way of a suit in his own name, except where expressly allowed by statute. § 16. The drawing and transferring of bills of exchange depend upon principles of the law merchant, which apply peculiarly to negotiable instruments. But the effect of the drawing of a bill of exchange, upon the rights and interests of the parties in the fund which is in the hands of the drawee, depends very frequently upon principles derived from the doctrines of courts of equity in respect to equitable assignments. And we shall now consider the effect of a bill or order upon the fund on which it is drawn. This inquiry naturally divides itself into several branches: First. What is the effect of a bill of exchange (a negotiable bill in its commercial sense) drawn for the whole amount of a fund in the drawee's hand? Second. What is the effect of a non-negotiable order for the whole of a fund? Third. What is the effect of a bill of exchange for part of a fund? And fourth. What is the effect of a non-negotiable order for part of a fund? § 16a. The questions stated have elicited very diverse and conflicting opinions, and it has been held or declared in judicial decisions: (1), that an unaccepted bill of exchange for the whole amount of the debt due by the drawee to the drawer, or for the whole of the funds in the drawee's hands, 1 3 Lead. Cases in Equity [*652], 307; Chitty on Bills [*7, 8], 9, 10. 'Wheatley v. Strobe, 12 Cal., 98; Mandeville v. Welch, 5 Wheat., 277; Chitty on Bills [9], 10. |