1799. obtained a judgment? Suppose a bill of exchange protested for non-acceptance, a suit and judgment upon it, and afterwards, but before the day of payment, it was lost; a bill may be negotiated after such a protest (2 Dall. Rep. 396.) and, yet, would a purchaser be preferred to the plaintiff in the suit, or could he recover a second time from the drawer? The attachment ought, in short, to be regarded in the nature of a suit brought by Duer himself.

The hardship of the case is not so great, or so unprecedented, as to require an extraordinary interposition of the Court, to change, or modify, on equitable principles, the operation of a positive law. In England, notes, and other securities, given upon usurious, or gaming, considerations, are void in the hands of a bonâ fide holder, for a valuable consideration, without notice, even as against the drawer, who was accessary to the injury and embarrassment by issuing the note. In those instances, as well as in the present instance, no warning appears on the face of the paper; and the bar is, emphatically, a latent bar, no record existing by which it could be traced, or ascertained. Is it not as reasonable, as just, that the attachment should operate in favour of a boná fide creditor of Duer, who had no power to obtain possession of the note; as that the original taint in the consideration, of a gaming, or an usurious, contract, should operate in favour of a party to the illegal transaction?

Upon the whole, Fish has attached when the property and the possession of the note, were both in Duer; and his opponents must convince the Court, that an attachment, once operative, can be legally done away, without some laches, or relinquishment, on his part.

Ingersoll, for the plaintiff in error, in reply. The question under consideration is novel, curious, and, in its consequences, most extensive: it is not too much to say, that the negotiable paper of Philadelphia, depends, for its circulation abroad, upon the event of the cause. The subject may be considered, with a view to support two positions: 1st. That the note, under the circumstances of the case, was negotiable, the property of which, after the indorsement in blank, passed by delivery as a bill of exchange payable to bearer. 2d. That negotiable paper of this description, is not within the spirit, intent, and meaning, of the attachment law of Pennsylvania; especially when put into circulation and negotiated out of the state.

1st. The note passed by delivery as a bill of exchange, payable to bearer. Under this general proposition, we derive the title of the plaintiff immediately from Henry Knox, not through William Duer: but against the proposition several objections have been urged. It is said, that in Pennsylvania promissory notes are not within the law merchant; that they are regulated by the common law principle, in pursuance of which every assignee takes the in

strument

strument subject to every equitable consideration that affected the 1799. assignor; that the act of assembly places notes on a footing with bonds, enabling the indorsee to recover only what shall appear to have been due at the time of assignment; and that these doctrines have been exemplified and enforced by legal decisions. But the answers to these suggestions, will satisfactorily show, either that they are not founded in fact, or that they are inapplicable on the present occasion.

Promissory notes in Pennsylvania are governed by the statute of Anne, as far as respects the payee's remedy against the drawer, in an action upon the notes themselves; and, therefore, they are within the law merchant. The act of assembly, when it provides a further remedy for the indorsee, implies and recognises the law to be so. At common law, a promissory note could not be declared on; all the declarations on record upon promissory notes, state the liability as arising under the statute of Anne; and the distinction in this particular has been repeatedly recognised by our Courts. The statute of 9 & 10 W. 3. c. 17. placed inland bills of exchange upon a footing with foreign bills; and the statute of 3 & 4 Anne, c. 9. placed promissory notes upon a footing with inland bills: after an indorsement, therefore, promissory notes are to be regarded as foreign bills of exchange. It is true, that our act of assembly limits the drawer's responsibility to an indorsee, by the measure of his responsibility to the payee; but nothing can be more extravagant, or unjust, than the deductions which have been attempted, at different times, from that provision, as recognised in M'Cullough v. Huston. 1 Dall. Rep. 444. It was once, indeed, introduced as an authority to release the friendly indorser of an accommodation note, from all obligation to pay the indorsee: but the Court declared, that the determination only applied to the case of a drawer's being cheated by the payee (when, as in the instances of gambling and usurious notes in England) he should not be made liable to the indorsee. What analogy, however, can be suggested between McCullough v. Huston, and the present case? The defendant is not called on to answer the holder of the note further than if the payee was plaintiff; there is no idea that the defendant has been defrauded; the consideration for which the note was given has not failed; the defendant has made no payment; he owes the full nominal amount of the note; and, in short, he is a mere stake-holder. In the cases that have been hitherto decided, the dramatis persona were the drawer, the payee, or indorser, and the indorsee: here a new corps of actors appears, the creditors of an intervening holder of the note, as plaintiffs in the attachment. In those cases, there was fraud; in the present case, the contest is between an innocent holder of the note, and a claimant by legal process. In those cases, if the remedy failed against the drawer, it might be pursued against the indorser; in the present case, the debtor in the attachment is not an indorser, the person VOL. IV. who

I

1799. who sold to the plaintiff is not an indorser; and, as far as appears by the state of the case, we are without remedy, unless this action succeeds

The nature of the promissory note in question remains, then, to be ascertained on abstract principles, public policy, general convenience, the reason of the case, and the design of the attachment law. On the face of it, the note appears calculated for general circulation, unaffected by local circumstances: it is payable at the bank of the United States; and that institution was not stationary, for its commencement of business only was fixed at Philadelphia. A demand at the bank of the United States, wherever its business was transacted, when the note became due, was the only condition that remained to be performed. 2 H. Bl. 509. The note took effect and became operative by the delivery only, which was in New-York: M'Kimm v. Elton.* And there. promissory notes are on footing with bills of exchange. It was the intent and meaning of the parties that the note should circulate there, and be governed by the law of that state. Conventio vincit legem. Reed v. Ingraham. Post. The act of assembly, indeed, cannot refer to notes delivered and put in circulation out of Pennsylvania; and surely, the objection arising under our local law, ought not to proceed from the plaintiff in the attachment, a citizen of New-York, a party to, and bound by, the laws of that state. The note was originally in the form of a bank post note; and after the indorsement in blank, it assumed the character of a common bank note. It has, likewise, all the distinguishing characteristics of a bill of exchange: it is entititled to three days grace; the indorser is answerable to the indorsee, without express covenant, though the note be forged; and immediate notice must be given to the indorser, if the note is dishonoured.

2d. But negotiable paper of this description, is not within the spirit, intent, and meaning of the attachment law of Pennsylvania. The opposite doctrine would render our act of assembly a perfect snare; and inevitably prevent the extra-territorial negotiation of any note, or bill of exchange, on which any citizen of Pennsyl vania was drawer or acceptor. For, if Duer had purchased the note one hour, and sold it the next after the attachment was laid, the rule contended for would equally apply. Such is the absurd and monstrous inconvenience to which this pretension leads, that nei

* M'Kimm v. Elton. This case was decided in the Supreme Court some years ago. The defendant proposing to give a preference to the plaintiff, in an arrangement with his creditors, drew a note in the plaintiff's favour, and signed it; but, doubting afterwards the propriety of the measure, he put the note into his own desk. The plaintiff heard of this circumstance and applied to the defendant's wife, in the defendant's absence, for the note; who having a key of the desk, unlocked it, and delivered the note to the plaintiff. It was adjudged, that the mere signing of the note, without a delivery by the drawer to the payee, gave it no effect; and that the plaintiff could not take advantage of a possession, surreptitiously obtained.

ther

ther the person who sells, nor the person who buys, can know the 1799. injustice that they are concurring to practise: the one has sold what he had no right to part with, and the other has paid a valuable consideration for nothing; and, yet, the former shall be innocent, and no negligence can be imputed to the latter! The lis pendens has no extra-territorial operation, and cannot be regarded as implied notice to citizens of other countries.

But the attachment cannot, surely, give a better right to Fish to claim payment from the drawer, than a sale for value, with notice to the drawer, though without delivery of the note; or (in the cases already put) a sale and payment, with delivery of the note, which is afterwards, however, lost or stolen, and negotiated bona fide. By the act of assembly debts may be attached, and so may money: but suppose a sum of money had been specifically attached, and the garnishee had afterwards paid it away, could the money have been followed into the hands of a bona fide receiver? If goods, indeed, are attached, and afterwards lost, or stolen, they may be pursued, and if found again, will still be liable to the attachment: but not so, in the case of money; a distinction which exemplifies and establishes the rule on our part. For, notes payable to bearer are regarded as money; and the reason applying equally to both objects, the law must be the same. Nor can an attachment alter the nature and conditions of a contract; as, in the present instance, the negotiable nature of the instrument, and the condition that it shall pass by delivery. It is the same thing, whether the condition is expressed by the parties, or implied by law. An attachment of real estate would not prevent a springing use, or a resulting trust; the estate, might, therefore, change its owner pending the attachment. And why not the property of a note, liable, by the nature of the contract to this contingency, that it shall cease to represent a debt owing to Duer, and become a debt owing to Ludlow, if Ludlow is the bearer on the day of payment? Debts, in general, are not liable to such contingencies and conditions; they are not negotiable; and, therefore, (though it is only by implication our law is extended to them) they may with certainty be subjects of attachments. But even stock-contracts, or bonds, payable to a man, or his assigns, cannot be affected by an attachment made in another state,

Does it, then, require a greater latitude of construction, than is authorised by precedent, to exempt negotiable paper, circulating abroad, from the meaning and operation of the attachment law? It is not to controul our Act of assembly by the law of NewYork, but to give to our Act a reasonable interpretation. While paper credit remains in use, it should be regulated by plain and uniform rules; 1 Dall. Rep. 270. and that the bona fide purchaser should only be affected by what appears on the face of the instrument, is the characteristic of negotiable paper. 1 Loft's Gill.

1799. 195. 2 Dall. Rep. 396. The departure from the strict terms of a law, in a variety of other instances, will authorise a much greater latitude of construction than the present case requires. The cases of the sick sailor, who remained in a foundering ship, of the surgeon who bled a man in the street, and of ecclesiastical leases, in England; 1 Bl. Com. 60. as well as the case of unrecorded mortgages here, 1 Dall. Rep. 434. are strong examples. But construction on one side or the other forces itself upon the Court. An indorser is guarantee for the payment of the note to the holder, if it is not paid by the drawer; a payment to one not the holder, is not an exception known to the law merchant; and can a municipal regulation alter the general law, operating on a negotiation out of the state? A statutory assignment by bankruptcy (which is an assignment of rights of action, and stronger than an attachment) will not enable the assignees to claim from the drawer against a bona fide holder. A judgment in an attachment is not conclusive evidence of a debt out of the state, in which it is rendered: 1 Dall. Rep. 261. and the death of the defendant, after interlocutory judgment, destroys the attachment, because there is not any party in Court; because executors, or administrators are not liable to enter special bail; and because no foreign attachment can issue against executors or administrators. 1 Dall. Rep. 248. (1)

The attachment law of Pennsylvania is a copy, in some measure, from the original mode established as the custom of London; and that the currency of bills and notes in London (which even pass under a bequest of money in a will. 1 Burr. 358. 3 Burr. 1516. 1524, 5. 1530. 1 Bl. Rep. 485. 4 Bac. Abr. 705, 6. 2 Burr. 675. 1225.) should be impaired and endangered in this way, is so improbable, that the most authoritative precedents are necessary to induce belief. A precedent is, however, cited, but of so light a texture, that it will hardly bear examination: it is cited, too, against a bona fide holder, who never knew of Duer's interest, or possession of the note; who may fill up the blank indorsement as he pleases; 1 Bl. Rep. 296. who may deduce his title immediately from Knox; 2 Burr. 1225. 1216. and who, in that way, can never be injured by any thing which Duer has done. The solitary precedent is cited from Carthew 26. where it is said, that a bill of exchange is liable to attachment. But this was not the point of the cause, and ought, therefore, to be disregarded; 1 Burr. 526. 3 Burr. 1730. the only point turning on the question, whether a prohibition ought to issue. The debt due, and the debt attached, were both upon bonds, not on a bill of exchange. Holt. 179. The incidental observations, re

(1) The defendant died after final judgment, but before the money actually paid by the garnishee: query, the effect of his death, since the attachment might be dissolved by entering special bail at any time before such payment? This point was stated, but not relied on, by the plaintiff's counsel.