Its

Arkansas chartered "The Bank of the State of Arkansas," the whole capital of which belonged to the State. charter provided "that the bills and notes of said institution shall be received in all payments of debts due to the State of Arkansas," but this provision was repealed by the legis lature in 1845. At the time of its repeal a large amount of the issues of the bank were in circulation, and a judgment debtor of the State, after the repeal, tendered the amount due by him in bank notes to the collecting officer, who refused to receive them. The Supreme Court of the United States held that the legislation aforesaid constituted a contract which no subsequent legislation could impair; and that the collecting officer might be compelled by mandamus to receive the notes tendered.1 In a subsequent case which went up from Tennessee, a similar decision was rendered by the same tribunal, which held the contract of the State to receive the bank notes for all public dues irrepealable. This guaranty was thought in no sense a personal one, but attached to the notes themselves as much as if written on the back thereof; that it went with them everywhere as long as they existed, and was a standing invitation to all persons to receive them, even though, after the notes were issued, the law declaring their receivability should be repealed. "The quality of negotiability is annexed to the notes in words that can not be misunderstood, and which indicate the purpose of the legislature, that they should be used by every one indebted to the State.""

§ 448. Virginia decisions.-In Virginia, the decisions of the United States Supreme Court have been followed. It appeared in the case presented that the State of Virginia, by her legislature, had undertaken to issue coupon bonds for two-thirds of her entire indebtedness, the remaining third being assumed to be the proportion which should be

1 Woodruff v. Trapnall, 10 How., 190.

2 Furman v. Nichols, 8 Wall., 44. See also Keith v. Clark, 97 U. S. (7 Otto), 454, and Tennessee v. Sneed, 96 U. S. (6 Otto), 69.

discharged by West Virginia, which State had been forcibly, and without Virginia's consent, torn out of her boundaries. It was provided in the act of the Virginia Assembly that the coupons of the new issue of. bonds should be receivable "at and after maturity for all taxes, debts, and demands due the State." Some of her creditors accepted this adjustment of their bonded debt, and a holder of some of the coupons tendered them to the sheriff of Richmond in payment of taxes. In the meantime, the law authorizing the receipt of the coupons for taxes and other demands had been repealed, and the Assembly had passed an act prohibiting the collecting officers of the State from receiving the coupons in discharge "of taxes or other demands of the State now due, or that shall hereafter become due." The Supreme Court of Appeals held that the prior act constituted a contract between Virginia and her creditors who accepted its terms, and was upon sufficient considerations; and that no subsequent legislative act could repeal the provision that the coupons issued should be receivable for taxes; and, accordingly, sustained the peremptory mandamus which had been awarded compelling the sheriff to receive them. But in subsequent cases the court held that the legislature had full power to repeal the funding act as against all creditors who had not accepted its terms at the time of such repeal.'

'Antoni v. Wright, 22 Grat., 833. Bouldin, J., with whom concurred Moncure and Christian, JJ., delivered the opinion of the court, which is a model of judicial style. Staples, J., dissented. The current of decisions is so strong in favor of the views stated in the text that they may be regarded as settling the law. Many learned lawyers believe, however, that they rest upon a mistaken notion that States were never contemplated as contracting parties, in that clause of the Constitution which prohibits the passage of laws by States which impair the obligation of contracts; and we can but think that the decisions quoted have sacrificed the spirit to the letter of the law, and shorn States of their sovereignty, under color of a constitutional provision only designed to exact good faith from individuals in their dealings with one another. In Clarke v. Tyler, Serg't, 30 Grat., 134, it was held that coupons attached to bonds issued under the Virginia Funding Act, were receivable for fines. In Williamson v. Massey, Auditor, 33 Grat., 237, the above decisions were reaffirmed, and it was held that an act exempting coupons from taxation was valid under the constitu tion of Virginia. In Hartman v. Greenhow, 102 U. S. (12 Otto), 672, the Virginia decisions were approved; and a statute of that State requiring the tax on the bonds of the State to be deducted from the coupons held by a di owner was held void.

Wise v. Rogers, 24 Grat., 169; Maury v. Rogers, 24 Grat., 169.

BOOK III.

THE NEGOTIATION OF THE INSTRUMENT.

CHAPTER XVII.

PRESENTMENT FOR ACCEPTANCE.

SECTION I.

NATURE OF AND NECESSITY FOR PRESENTMENT FOR ACCEPT. ANCE.

§ 449. It is the right of the holder of a bill to present it for, and insist on its acceptance, even so late as the day before it falls due. If not presented for acceptance until the day it falls due, the right to demand acceptance becomes merged in the right to demand payment. If the bill be presented for acceptance before it falls due, it becomes dishonored if acceptance be refused; and notice must be forthwith given to the parties whom it is intended to charge.1 And suit may at once be instituted against the drawer, and against the indorsers. This rule of commercial law is so general and binding that a statute of a State which forbids a suit from being brought in such a case until after the maturity of the bill, can have no effect upon suits brought in the United States courts. The requisition of a State statute like this would be a violation of the general

'Chitty on Bills (13 Am. ed.), 309; Goodall v. Dolley, 1 T. R., 712; see chapter XXIX, on Notice, vol. 2; Bank of Washington v. Triplett, 1 Pet., 25; Townsley v. Sumrall, 2 Pet., 170; Smith v. Roach, 7 B. Mon., 17; Landrum v. Trowbridge, 2 Metc., 281.

'Id.; Woodward v. Row, Keb. R., 132 (1666); see also Lucas v. Ladew, 28 Mo., 342; Edwards on Bills, 387; Pilkinton v. Woods, 10 Ind., 432; Kinney v. Heald, 17 Ark., 397.

commercial law, which a State has no power to impose, and which the courts of the United States would be bound to disregard.1 So also if the State statute seeks to make the right of recovery, in a suit brought in case of non-acceptance, dependent upon proof of subsequent presentment, protest, and notice for non-payment.2

§ 450. Presentment to the drawee, it has been held, is necessary, even though the drawer has requested him not to accept; but the holder is not bound to present again after refusal to accept and notice given, even though the drawer requests him to do so, and promises that the bill shall be honored.*

The only cases in which the holder of a bill which, according to its tenor, should be presented for acceptance, can charge the drawer without presenting it for acceptance, arise when the relations between the drawer and drawee are such as to constitute the drawing of the bill a fraud upon the holder. When the bill is presented the acceptance must be according to its tenor to pay in money. If it be to pay by another bill, it is no acceptance, and the bill should be protested.

$451. Effect of acceptance.- Before acceptance the drawee is under no liability to accept, unless he has specially contracted to do so, and the holder, as it is generally held, can not sue him, even though he have funds of the drawer in his hands." But an acceptance operates as a full legal assignment of the amount to the holder, and the

'Watson v. Tarpley, 18 How., 517. "Watson v. Tarpley, 18 How., 517.

* Hill v. Heap, Dow & R. N. P., 57; see 1 Parsons N. & B., 338. Hickligg v. Hardey, 7 Taunt., 312.

Smith's Mercantile Law (Holcombe & Gholson's ed.), 304; Bank of Washington v. Triplett, 1 Pet., 25.

7

' Mandeville v. Welch, 5 Wheat., 277; Schimmelpennich v. Bayard, 1 Pet., 264; Tiernan v. Jackson, 5 Pet., 580. The case of Corser v. Craig, 1 Wash. C. C. R., 424, has been overruled. Luff v. Pope, 5 Hill, 413; 7 Id., 577; N. Y. and Va. S. Bank v. Gibson, 5 Duer, 574; Harris v. Clark, 3 Comst., 93.

acceptor is bound to pay it.' It has been much debated whether or not a bill before acceptance operates as an assignment when drawn upon funds of the amount it calls for; and it seems to be settled by the authorities that if drawn for the whole amount it operates as an equitable assignment, which will take precedence of any subsequent lien or charge upon them; and that after notice to the drawee it will bind him. And it has been so held of a draft non-negotiable. But when the bill is for only a part of the drawer's funds, it is said that it does not operate as an assignment against the drawee, unless he accepts, for the reason that the creditor can not be permitted without the debtor's assent to split up one cause of action into several. Where the draft is not negotiable, the weight of authority is to this effect. This subject has been fully discussed in a previous portion of this work."

$452. Effect of failure to present for acceptance.Whenever it is incumbent on the holder to present the bill for acceptance or payment, if he fails to do so at the proper time, he will lose not only his remedy on the bill, but also on the consideration or debt in respect of which it was given or transferred. This doctrine is well settled, and was well expressed in an Arkansas case, where Scott, J., said: "In case a plaintiff has lost by his own laches his legal recourse against the defendant upon the bill or note, it is in vain that he brings it into court and offers to cancel it, with the expectation of being allowed, after cancellation,

'See vol. 1, §§ 15, 78, et seq.

Mandeville v. Welch, 5 Wheat., 277; Anderson v. De Soer, 6 Grat., 364; Gibson v. Cooke, 20 Pick., 15. See ante, chap. I, sec. 3, § 15 et seq.

15.

3 Id.

• Cutts v. Perkins, 12 Mass., 209; Morton v. Naylor, 1 Hill, 583.

'Story, J., in Mandeville v. Welch, 5 Wheat., 277; Gibson v. Cooke, 20 Pick.,

T

§ 15 et seq.

I Parsons N. & B., 334. Adams v. Darby, 28 Mo., 182; Smith v. Miller, 43 N. Y., 171 (1870); 53 N. Y., 546 (1873); Camidge v. Allenby, 6 B. & C., 373; Darrach v. Savage, I Show, 155 (1691); Benjamin's Chalmers' Digest, 149. See §§ 971, 1276.