NEGOTIABLE PAPER 



4111 



NEGRO 



tory to the negligence of the defendant he can- 

 not recover. Had Smith warned the automo- 

 bile, and had the driver attempted to cross the 

 track regardless of the warning, his act would 

 have been considered as contributory negli- 

 gence, and the railroad company would not 

 have been liable. 



Consult Shearman and Redfleld's Treatise on 

 the Law of Negligence. 



NEGOTIABLE, nego'shiab'l, PAPER, 

 written contracts payable to order or bearers, 

 and treated as security for, or representative 

 of, money. Negotiable paper may be trans- 

 ferred by endorsement or delivery, and the re- 

 ceiver or assignee of the contract has a claim 

 in his own name and without notice against the 

 maker. The best-known form of negotiable 

 paper is the bank check, which was also the 

 latest to come into general use. A check may 

 pass through the hands of an indefinite number 

 of persons, each of whom accepts it in place of 

 money. Any holder of the check may claim pay- 

 ment from the maker. In addition to checks 

 the commonest forms of negotiable paper are 

 drafts and bills of exchange, promissory notes, 

 bank, exchequer or treasury notes, and govern- 

 ment and corporation bonds. The pass book of 

 a savings bank, however, is not transferable. 



Its Characteristics. As defined above, negor 

 tiable paper must be payable to order or to 

 bearer. In other words, if John Doe makes a 

 note payable to "Richard Roe," the note is not 

 negotiable and Richard Roe is the only one 

 who can collect it. If, on the other hand, the 

 note is payable to "Richard Roe, or order," 

 tlu note may be transferred. Negotiable paper 

 represents money, not goods. A bill of lading 

 or a warehouse receipt, on the contrary, repre- 

 sents commodities. By the laws of most civi- 

 1 countries a bill of lading may be assigned 

 while the goods are en route, or a warehouse 

 receipt while the goods are in storage, but such 

 paper is not negotiable, for it does not repre- 

 sent money and cannot perform the functions 

 of money. This difference is most important in 

 the transfer of ownership, for the ownership of 

 negotiable paper is vested in the holder. This 

 means that a thief or finder can convey perfect 

 title to negotiable paper, but if he conveys a 

 stolen bill of lading the purchaser or assignee 

 gets no better title to the goods than he would 

 if he received the stolen goods. 

 How Title Is Transferred. A negotiable in- 

 vent may be transferred either by endorse- 

 it or by delivery. A check, for example, if 

 made payable to bearer, may be transferred 



merely by delivery. It is customary, however, 

 to endorse even such paper as is payable to 

 bearer. 



Endorsement. An endorsement or indorse- 

 ment, in its broadest sense, is any writing on 

 the back of a paper; the word comes from the 

 Latin in dorso, meaning "on the back." In a 

 technical sense the term applies only to the sig- 

 nature or other writing which indicates the 

 transfer of a negotiable instrument. Ordinarily 

 such writing is on the back, but it is legal if 

 made on the face of the instrument. 



An endorsement may be written in a variety 

 of ways. If the holder of the paper merely 

 signs his name, the endorsement is said to be 

 in blank. A special endorsement or an endorse- 

 ment in full specifies the person to whose order 

 payment is to be made, thus: "Pay to A. B., or 

 order, (Signed) C. D." Another form of en- 

 dorsement is called restrictive, because it re- 

 stricts further negotiation, thus: "Pay to First 

 National Bank, only." Modern English and 

 United States law emphasizes the negotiable 

 character of the instrument, and the party who 

 is required to pay may disregard any condi- 

 tional endorsement, whether or not the condi- 

 tion has been fulfilled, and may pay the re- 

 quired amount to the endorsee. 



Ordinarily every endorser of a negotiable in- 

 strument is liable for its face value if the maker 

 is unwilling or unable to pay it. If the endorser 

 wishes to avoid this liability he may add the 

 words "without recourse." This form of en- 

 dorsement does not affect the validity of the 

 paper or prevent further endorsement. A.E.R. 



Consult Tompklns' The Law of Commercial Pa- 

 per; Ogden's Law of Negotiable Instruments. 



Related Subject*. The reader is referred to 

 the following articles in these volumes: 

 Bill of Exchange Check 



Bill of Lading Draft 



Bond Note 



NEGRITOS, negre'tohg, a negroid race 

 found chiefly in the Philippines, the Andaman 

 Islands and the Malay Peninsula. They form 

 one division of the pygmies, people whose most 

 pronounced characteristic is their short stature. 

 For details, see PYGMIES. 



NE'GRO, from the Latin niper, meaning 

 black, the name properly applied to the native 

 races of Africa, excepting the Egyptians, Ber- 

 bers, Abyssinians and, some authorities insist, 

 the Hottentots. The term negro race is gener- 

 ally used as synonymous with African race, but 

 such a designation is not strictly tnie. The 

 characteristics of the negro race are a dark skin, 



