and others v.
(Cirouit Court, 8. D. New York. lIay 20, 1887.)
STATUTE-CONSTRUCTION-BILL OF, EXCHANGE-CODE ALA.
1876, § 2094. Code Ala; 1876, § 2094, provides that "bills of exchange and promissory notes, payable in money at S:bank or private banking-house, or a certain place of payment therein designa\ed,are governed by the commercial law." Held, on exaJ;llination of the provisions of the laws of Alabama in pari mate· ria, and the antecedent legislation of the state upon the same subject, that the qualifying words, "payable in money at a bank. "etc.· apply only to promissory notes, and that negatillplehills of exchange, whether payable at a cammerspecified place of payment or ,not, are still governed by the ciallaw. " '., . , '
The common law of negotiable paper will not be deemed altered by statute so as to subject a bill of exch,ange, In the hands of a bona fide purchaser for value, to the equities existing between the original parties, unless the statute evinces an intentipn'to daso in clear and peremptory terms.
Thoma8 G. Sh(Jr'Tflan, for plaintiffs.,
Wm. P. Ghambe:r8, for defendants.
WAU,ACE, J. Thiscase is here upon the motion of the plaintiffs for a new trial on exceptions to the rulings of the referee by whom the case was tried. The actic::mis brought upon a bill of exchange drawn upon defendants, and accepted by them, at Montgomery,Alabama. The .referee found that the acceptance6fthe bill was obtained by fraud and without consideration,but that the plaintiffs received the bill without actual notice of ,any defense thereto, or of any equities existing between the drawers thereof and the payee in part payment of an antecedent indebtedness of the drawers. He decided that under the law of Alabama the bill of exchange was not a negotiable instrument, and wliS not governed by commercial law,because it was not by its terms payable at a certain place of payment therein designated. The only question whidh it is necessary to consider is whether bills of exchange are"governed by' the commercial law," within the meaning of section 2094 ofthe Code of Alabafua of 1876, when they are not by their terms payable at a certain place of payment designated. If they are, as the plaintiffs were holders in good' faith and for value; according to the decisions controlling lipan this court, the bill of exchange in their hands was not subject to the equities existing between the original parties. Swift v. Tyson, 16 Pet. 1: Railroad 06. v. Naticmal Bank, 102 U. S. 14. The language of the section is as follows: "Sec. 2094. Bills of exchange and promissory notes, payable in money at a bank or private banking-house, or a certain place of payment therein designated, are governed by the commercial law."
It is plain, upon the maxim expre.ssW tmius est exclusio alteriv-s, that promissory notes are not governed by the law of commercial paper, under this section, unless they are made payable at a bank or private banking-
GWATHMAY 11. CUSBY.
house, or Borne other designated place of payment. The inquiry is whether, by the terms of the section, the same cbnditions apply to bills of exchange. It is somewhat surprising that, so far as is known, this question has never been decided by the courts of the state of Alabama, and that it should. devolve upon a foreign tribunal to place a construction for the first time upon the meaning of a law of Alabama which has been in forc.e since 1852, afl:acting a subject so important as the rights and obligations of parties to a bill of exchange. Reading the section without the assistance of other provisions of the laws of Nabama in pari materia, or of antecedent legislation upon the same subject, the question presented would be one of much doubt. The punctuation would favor the view that bills of exchange and promissory notes, are bo.th governed by the restrictive terms. But, in arriving at the real of statutes., the courts disregard punctuation, and read statutel;! with such stops as are most consistent with the sense. In other words, punctuation is no part of the statute. Hammock v. Loan &;-Trust 00., 105 U. S. 77 .. It was undoubtedly the purpose of the seCtion to change the rule of the common law respecting the attributes of pr()missory notes. If a like intention can be gathered with respect ,to billr;!,.of exchange,it is because both classes of commercial paper together in the section. But this consideration does not advance the inquiry, because the point is whether the qualifying words a1>ply to both classes, or only to promissory notes. The plaintiff invokes the. rule of construction, sometimes resorted to, that relative, words must ordinarily be referred to the next antecedent, where, the.intent upon the whole statute does not appear to the contrary. St. 590,591; Oushing v. Warrick, 9 Gray, Broom, Leg. Max. 680; 383. This rule is not controlling" and has often been disregarded; and it is not necessary to place the decision of the question upon such a narrow consideration. , The of 1876 is a revision of It succeeded the' Code·.of 1867, and, like that Code, was authorized by an act of the general assembly which contemplated that the substance and meaning of former statutes should remain unchanged. When a codification or revision of laws contains provisions which are substantially reproduced from previolis acts of the legislature, and doubts arise from the ambiguity of the language employed, the safest rule by which to ascertain the meaning is to. resort to the original sources for the purpose of ascertaining the legislative intent. U. S. v. Bowen, 100 U. S. 508. To quote the language oithe supreme court of Alabama in Landford v. Dunklin: "No rule of statutory construction rests upon better reasoning than that, in the revision of statutes, alteration of phraseology, or the omission or admission of words., will not necessarily change the operation or construction of i'ormer statQ.tes. The language of the statute as revised, or the legislativa i.ntent to chflngethe former statute, must be clea,'r. before it can be pronounced that there.is a change in such statute in construction and opera. tion." 71 Ala. 609. ,A.s said by the court in East Tennessee v. Hughes, 76 Ala. 590:
"Unless the alteration of the original act is of such a'eharacter as to mani" fest a elear intent to make aehange in the construction and .9peration, effect will be given to the statute as originally framed by the general,3ssembly." Section 2094 is a reproductionbf section 1525 'of the 'Code of 1852, as amended in 1873, which, as will be seen, did note:x!clude bills of exchange when not payable a.t any designated place from the category of instruments governed by the commercial law. ' . The origin of the legislation in reference to the general subject is found in the' act 'of January, 15, 1828, which reads as follows: ' "Ill III Ill' Hereafter the remedy on bills of exchange, foreign and inland, and on promissury notes payable in bank, shall be governed by the rules of the law-merchant as to the days of grace. protest. and notice." This provision was supplemented by an act of 1832 reading as follows: "Bonds and other instruments payable in bank shall be governed by the as to days of grace. demand, and notice. in'the rules of the same manner that bills of exchange and notes payable in bank now are." The gramrhatical construction of the act of 1828 plainly limits the qualifying words, "payable in bank," to promissory notes. And the statute is not to be construed as altering the common law, or making any innovations therein, further. than the words import.. Shaw v. Railroad Co., 101 U. S. 557. Accordingly, by the reasonable interpretation of the acts of 1828 and 1832, bills of exchange were governed by commercial1aw, and so,also, were all other instruments when payable in bank, .including prom:issory notes. That this was the true meaning and result of the legislation is made still more clear by the Code of 1852. That Code was not merely a revision of laws previously enacted, but a code in the wider sense, for the adoption of a body of laws "having regard to the general system and true spirit of the existing laws" of the state. Two sections of that Code are to be considered together as being in pari m.ateria. Section 1525 read as follows: "Bills of exchange and promissory notes payable, in money, at a bank or priVllte banking-house. are governed by the commercial law. except so far as the same is changed by this Code." Section 2129 was as follows: "Every action founded upon a promissory note. bond, or other contr3ct, express or implied. for the payment of money, must be prosecuted in the name of the party really interested, whether be have the legal title or not. subject to any defense the payor, obligor, or debtor may have had against the payee, obligee, or creditor, previous to notice of the assignment or transfer; but this clause does not apply to bills of exchange or instruments payable in bank, or at a private banking-house." Section 1525 would not, of itself, be decisive of the present inquiry; but it is to be. observed that section 2129, which is the first provision in the laws of Alabama by which negotiable paper of any class was explicitly placed on the footing of other contracts for the payment of money, so far as to be subject in the hands of a purchaser to the equitieEl existing between the original parties, makes a distinction between bills of exchange and all other instruments. The section declares that the clause
GWATHMAY V. CLISBY.
is not ,to apply. "to bills of exchange or instruments paYable in bank," etc. It was llnnecessary to ,enumerate bills of exchange unless this distinction was contemplated. The)' would have been included in the wrm and unless the provision was inwnded to discriminaw beand other instruments payable in bank, or at a private bankthElre was no reason for specially mentioning them. It is a cardiqal rule, in the construction of statuws, that every part shall be regarded and be so expounded, if practicable, as to give some effect to every part. noWs were not mentioned in the proviso because they were. included in the general designation of "instruments." When pa)'able inbanlt, or at a private banking-house, they were within the tion, although not. specifically mentioned; when not so payable, .they fell within .the general clause. Bills of exchange were mentioned, to emthe distinction created by the act ofl828. ·If this had not been the the word "other" would probably have been inserted between the words "or" and "instruments." Sections 1525 and 2129 reprodupe the provisions of both the previous acts, but it is only in seethat effect is given to the provisions of the.act of 1832. Seotjon 1l)25' of the Code of 1852 was amended in 1873 so as' to read : "Bill8,of exchange and promissory notes payable. in money, at a bank, or aertqlnplcro,e ofpa'llment therein designated, are governed by the commercial law." Section 2094 of the Code of 1876 reproduces the language of section 1525 of the Code of 1852, as thus amended in 1873. It is to be read in connection with section 2890. which is a reproduction of section 2129 of the Code of 1852. Section 2890 reads as follows: ..Actions upon promissory notes. bonds, or other contracts, express or implied, must· be prosecuted in the name of the party really interested, whether he has the legal title or not, subject to any defense the payor, obligor, or debtor may have had against the payee, obligee, or creditor previous to notice of assignment or transfer; except in actions upon bills of exchange, promissory notes payable in bank, or in a designated place of payment, and commercial instruments, in which cases the suits must be instituted in the name of the persons having the legal title." By the grammatical construction of this section neither bills of exchange, nor other commercial instruments except promissory notes, are required to be payable in ban,\!:, or at a designated place of payment, to fall within the exception. It is apparent from this collocation of statutes that none of them exhibit any clear intention to restrict the negotiability of bills of exchange, and that the tendency of the leiislation of the state has been to enlarge the negotiability of promissory notes since 1852, when they were negotiable only,when payable at a bank or private banking-house, and to enlarge the negotiability of other commercial instruments which, by the Code of 1852, were placed in the same category with promissory notes, apPl!-rentJy, by section 2890 of the Code of 1876. The cases' of Oook v. Mutual Ins. 00., 53 Ala. 37, and Oat6a v. NatJionuJ
Bank, 100 U. S. 239, are cited in support of the contention 6f the defendants. Both of these cases were upon promissory notes,·· Thiete was no casion to oonsider the point whether bills of exchange undet the statutes of Alabamawete governed by commercial law or not, and the point was not considered, ditectly or inferentially. On the other hand, the case of Knott v. V8lierablll,42 Ala. 186, is cited in support ofthe positiOn of the plaip..:. tiff.' That was a suit on an inland bill of exchange whieh",as not payable at any particular place.. ' The questions litigated to presentation for acceptance, and to demand and protest. The that in· these regards the paper governed by the ordihary 'rules. of COUlmercialln:w. No reference was made in argument, so far a:saippears,or in the opinion of the court, to the Code provisions; but it is urged that it can hardly be supposed that section 1525 of the Codeof1852, whiqh had been in force for 13 years when that case was decided; would have been overlooked if the court had supposed that that section was intended to dej>rive bills of exchange of their ordinary attribl!teB. .,In' the 'absence of any decision of the courts of A1abama which' can be upon the present question, 'the"duty deemed upon this court aif deciding it by the aid of the best light of which it is possessed. The conclusion reached is not altogether satisfactory, but it is one which Seems most reasonable after a very full c.onsideration. 'The rules oftheooniIllon law are not lobe changed by doubtful iU1plication, and especially should the courts be slow to impute an intention toa atatute,not evidenced by clear, unambiguous, and peremptory language, to change th,e la.w of commercial paper which circulateslargely in, foreign liltates, among those who are not supposed to be familiar with restriotions peouliar to the local law of the state where it may be made, or may be payable. Tbe exceptions to the rulings of the referee are sustained, and the mC). Uon for a new· trial is granted.
WILCOX 'IJ. BOOKWALTER
SAME t. PATENTS
(Oirouit (fourt, S.
n. o'hw, w: n.
INVEN.TIONS-REISSUE No. 8,B6B-VEHICLE HUBS. Oomplalnant's patent, (reissue No. 8,86B. August 26, IB79,) for an'improvement in vehicle hubs, held to be valid and infringed by defendants. ., 2. SAME-SKILL AND INVENTION-NoVELTY. The difficulty of drawing the line bet1Veen skill and invention considered. The standard ot skill is being constantly raised, and the standard of invention is, as a necessary consequence, clilrrespondingly raised. The standard of the :late of the alleged invention is that by which the test is to be made. "Novelty," when does it indicate skill, and when invention? _
Suit in Equity. Sltit for infringement of letters patent. upon bill, answer, and proof.