Front Page Titles (by Subject) 50.: EDWARD JENKS, THE EARLY HISTORY OF NEGOTIABLE INSTRUMENTS 1 - Select Essays in Anglo-American Legal History, vol. 3
The Online Library of Liberty
A project of Liberty Fund, Inc.
50.: EDWARD JENKS, THE EARLY HISTORY OF NEGOTIABLE INSTRUMENTS 1 - Committee of the Association of American Law Schools, Select Essays in Anglo-American Legal History, vol. 3 
Select Essays in Anglo-American Legal History, by various authors, compiled and edited by a committee of the Association of American Law Schools, in three volumes (Boston: Little, Brown, and Company, 1909). Vol. 3.
About Liberty Fund:
Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.
The text is in the public domain.
Fair use statement:
This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit.
THE EARLY HISTORY OF NEGOTIABLE INSTRUMENTS1
THERE is, upon some subjects, a touching absence of curiosity among English lawyers. Institutions which are the very heart of modern business life, the fountain-heads of not ungrateful streams of litigation, are accepted as though, like the image of Ephesus, they fell direct from heaven for the benefit of a deserving profession. The legal questions to which they give rise are studied with minute care, the legal relationships which they create are made the occasion of microscopic analysis. But the subject itself, the really interesting and important matter, is left untouched.
No example better than negotiable paper. Bills of Exchange, with their kindred documents, have rendered international commerce possible. They are familiar to the business man, the lawyer, the impecunious—a category somewhat comprehensive. They have been the occasion of scores of statutes and thousands of reported decisions. Without them modern life would be impossible or unrecognizable. Yet it is hardly going too far to say that, in England, we have as yet no serious attempt to trace the origin of negotiable instruments. Some of the writers who profess to deal with the law of Bills of Exchange make no allusion whatever to it. Others devote a page or two of discursive remarks to the historical side of the subject,3 as a sort of concession to decency; and occasionally a learned judge drops a remark in the same direction.1 But the net result of these efforts cannot be said to be gratifying. We are favoured with the stock quotations from Cicero and the Pandects (which it is agreed have nothing to do with the matter), with the dicta of Pothier and Heineccius.2 We are told that the first statutory reference to the subject in England is of the year 1379,3 and the first reported decision of 1601.4 For the earliest English treatise we are referred to Malynes, and in the same breath told that Malynes was probably wrong in his most elementary statements.5
Naturally enough, the Germans have not contented themselves with this empirical method. While their study of the Dogmatik of the subject is perpetually bringing out new points of interest, while they watch keenly the abundant legislation, not only of the Continent but also of England, in the hope of establishing something like a logical theory of negotiable instruments, they are equally alive to the historical aspects of the matter. Ever since the establishment of the Zeitschrift für das gesammte Handelsrecht in the year 1858, the writers in that review have been adding to our knowledge of the early history of the Law of Exchange (Wechselrecht), though it must be admitted that anything like unanimity, even upon important points, has not yet been attained. The articles in the Zeitschrift für Handelsrecht are then rather stores of material for the careful elaboration of hypotheses, than authoritative expositions of truth. The same admission must also be made with regard to the more permanent works of Martens,6 Biener,7 Endemann,8 and other writers who have attempted to account for the introduction of negotiable instruments. Subject, however, to this important reservation, it may be possible to put together a few facts of interest to English readers.
The existence of bills of exchange in something like their present form was unquestionably known to the merchants of the fourteenth century. A Piacenza Ordinance of the year 13911 compels campsores to give written acknowledgments of moneys deposited with them, and provides for a special and speedy remedy on such documents. Unfortunately, nothing is said about transferability. But an almost contemporary Ordinance by the magistrates of Barcelona, dated 18th of March, 1394,2 leaves the matter beyond doubt. The Ordinance is concerned with the weights to be used by the silk merchants, and with the form of the acceptance of letters of exchange (y sobre la forma de la aceptacion de las letras de cambio). It is expressly provided that any one to whom a letter of exchange is presented must answer within twenty-four hours whether he will accept (complira) or no, and must further indorse on the letter the decision to which he comes, together with the exact date of the presentation. If he fails to comply with this rule, he is to be deemed to have accepted (que lo dit cambi li vage per atorgat).
Half a century later, an Ordinance of the French King Louis XI,3 creating or renewing4 a quarterly fair in the town of Lyons, refers to the use of lectres de change as an established institution for merchants whose business compels them to frequent fairs. The whole Ordinance gives us a curious glimpse into the political economy of the Middle Ages. During the fair-days foreign moneys may be used, the fiscal regulations as to the export of coin and precious metals are suspended, the trade of money-changer may be exercised by persons of all nations, except noz ennemis ançiens, the English. But it is more for our present purpose to know that, during the fairs, money may be remitted in all directions by lectres de change, so long as it does not find its way either to Rome or England, and that a special court is to sit for summary process against defaulters on such letters, en faisant aucune protestation, ainsi qu’ont accoustumé faire marchands frequentans foires. Unfortunately, the precise nature of this summary process is described neither here nor in the Piacenza Ordinance, though the latter states that it is to be sine aliquâ petitione seu libello.
The work of Pegoletti of Florence, Practica della Mercatura, attributed by Martens1 to the commencement of the fourteenth century, contains unmistakable references to scritti di cambio, and indeed makes use of several of the technical terms so familiar at the present day. Further back than the fourteenth century, however, it does not seem possible to trace the existence of negotiable instruments in their modern form; in fact there is some slight negative evidence against their existence prior to the middle of the thirteenth century. Salvetti, the author of the Antiquitates Florentinae, mentions a Corpus Artis Cambii Sanctionum of the year 1259, which dealt largely with the art of weighing and testing coin, but did not recognise the existence of literas cambii. Ex iistandem (says Salvetti) eruitur Florentinorum fuisse literarum cambii utilissimum inventum.2
Our enquiry into the earlier history of negotiable paper will, therefore, be of a purely biological character. We shall have to trace in the clauses of early medieval documents the germs from which the limbs of the negotiable instrument, so startlingly different from the orthodox forms of legal anatomy, were developed. For we may be quite sure that negotiable instruments were not an invention, but a development.
But before turning to this biological enquiry, let us satisfy ourselves that the legislators and writers of the fourteenth and early fifteenth centuries were dealing with facts, not with fictions. Hitherto we have only had references to imaginary instruments. We want to see concrete examples.
The oldest known to me is a bill of exchange of the 5th October, 1339. It is drawn by Barna of Lucca on Bartalo Casini and company of Pisa, payable to Landuccio Busdraghi and company of Lucca in favour of Tancredi Bonaguinta and company. It reads thus:—
Al nome di Dio amen. Bartalo e compagni: Barna da Lucha e compagni salute. Di Vignone. Pagherete per questa lettera a di xx di novembre 339 a Landuccio Busdraghi e compagni da Luca fiorini trecento dodici e tre quarti d’ oro per cambio di fiorini trecento d’ oro, che questo di della fatta n’avemo da Tancredi Bonaguinta e compagni, a raxione di IIII e quarto per C alloro vantaggio, e ponete a nostro conto e ragione. Fatta di V d’ ottobre 339.—Francesco Falconetti ci a mandate a paghare per voi a gli Acciaiuoli scudi CCXXX d’ oro.
The letter is addressed—Bartalo Casini e compagni in Pisa. It bears also a trade-mark, near to which is the word Prima.1
Another example, though sixty years younger, is of interest for our purpose, for it is contained in a reference sent by the magistrates of Bruges to the magistrates of Barcelona, whose exchange-ordinance we have already noticed. Inasmuch as there was no political connection between Barcelona and Bruges at the beginning of the fifteenth century, the reference must have been occasioned by one of two facts—the residence of the drawee at Barcelona, or some special reputation possessed by the Catalonian city in exchange matters. In either case the fact is interesting. Of course the practice of ‘stating a case’ for the opinion of a specialist or learned body was extremely familiar to the courts of the later Middle Ages; Henry VIII’s divorce question affording a conspicuous example. Here, however, is the document:—
Al nome di Dio amen. A di 18 Maggiore, 1404. Pagate per questa prima di cambio ad usanza à Piero Gilberto et à Pièro di Scorpo scuti mille de Felippo à soldi 10 Barcelonesi per scuto, i quali scuti mille sono per cambio, che (. . .) con Giovanni Colombo à grossi 22 di 9. scuto; et pagate ànostro conto et Christo vi guardi.—Antonio Quarti Sal. de Bruggias.
The letter is addressed—Francisco de Prato et Comp. à Barsalona.1
Here then we have two bills or letters of exchange, one upwards of 500 years old, the other only half a century younger, which would (unquestionably) be perfectly intelligible to any English merchant at the present day. Three points of difference may, however, be briefly noted.
1. Each bill has four parties, instead of, according to modern practice, three. In addition to the drawer, drawee, and payee, there is a presenter, or recipient on behalf of the payee. We shall see that this is the common practice, and we may be able to offer a suggestion as to its meaning.
2. The name of the drawee is indorsed. In the first bill it appears also on the face, in the second it does not. This fact will come in usefully hereafter.
3. The second bill is written in Italian, though none of the parties to it have (apparently) an Italian domicile, nor does there seem to be any essential reason for the choice of language. This fact seems to point to an early Italian influence in bills of exchange.
Can we now go a step further, and vivify our notions of early negotiable instruments by observing them as subjects of actual litigation? Fortunately we can; and the glimpse will not be without interest, as it can only be obtained through the medium of fragmentary publications.
On the establishment of the Belgian kingdom in 1837, the new Government, in the ardour of patriotism, undertook the issue of a Récueil des anciennes Coutumes de la Belgique. Two of the most important publications of the Royal Commission are the Coutumes d’Anvers2 and de Bruges respectively. But it pleased the wisdom of the Government to forbid the publication in the latter compilation of ‘le texte des sentences ou décisions particulières et les matiêres commerciales.’ Whereby, certain most interesting matter would have been lost to students of this generation, had not the distinguished German jurist Brunner appealed in the name of learning to the editor of the Coutumes de Bruges, Dr. Gilliodts van Severen, to save at least some fragments from the general fate. Dr. Van Severen, in reply, forwarded to Professor Brunner several manuscript copies of protocols recorded in connection with proceedings before the Town Council, or Schöffengericht,1 of Bruges, in the middle of the fifteenth century. These reports, long extracts from which have been published by Brunner in the Zeitschrift für Handelsrecht, are thus almost contemporaneous with the Lyons charter of Louis XI, and with the important Bolognese Ordinance of 1454,2 to be hereafter alluded to. The cases quoted by Brunner are interesting in all kinds of ways, but space forbids the quotation of more than one example.
Spinula v. Camby. Judgment of 29th March, 1448. Bernard and Matthias Ricy, at Avignon, on the 3rd June, 1439, gave a letter of exchange (fist ung change) to Cerruche, of Bardiz, for 450 florins. The bill was drawn on one Marian Rau, and was payable at Bruges to Bernard Camby (the defendant) and another. Marian Rau paid the defendant in full soon after the arrival of the bill at Bruges, but the defendant nevertheless ‘protested’ it for non-payment, and sent it back with the protest to Avignon. Thereupon the Ricys were compelled to pay the amount (presumably to Cerruche). Marian’s rights in the matter seem to have passed, in some unexplained way, to her brother Odo, who transferred them by a formal instrument (produced before the Court) to the plaintiff, Spinula. The latter brought his action against Camby to recover the amount paid him by Marian.
The defendant pleaded, first, that before the assignment to the plaintiff, Odo Rau had become bankrupt (estoit faillj), and that his goods and debts, therefore, belonged to his creditors rateably; second, that he had never had any dealings with Odo Rau, but that if the plaintiff would bring his action in the name of Marian, he would account as a good merchant should.
The court deputed certain of its members to consider the matter, and also took the advice of two merchants, one from Lucca, the other from Pisa, whom the parties had chosen as arbitrators. In its judgment it nonsuited the plaintiff, on the express ground that the attempted transfer to him of the rights of the Raus was worthless.1
The case is startlingly modern in some of its aspects. We have the modern bill of exchange, with presentation and payment. Evidently also the ‘protest’ was a fully recognised proceeding, for on its arrival at Avignon the Ricys acted upon it without any suspicion of the trick which had been played.2 And the recourse of the payee against the drawer, familiar also to modern law, is clearly admitted. The medieval aspects of the case are, of course, the refusal to recognise a written transfer of a chose in action, or, as the report puts it, droit et action, the existence (as in the earlier examples) of the four parties to the bill, and the reference to the Italian merchants.
Enough then has been said to prove the existence and legal recognition of bills or letters of exchange at the beginning of the fifteenth century. Minor points can be dealt with afterwards. We must now make an attempt to trace the biological development of the negotiable instrument.
It will hardly be disputed that the negotiable instrument of to-day still retains one of the most marked features of early law. It is one of the very few surviving instances of the formal contract. In spite of all modern legislation, in spite of the Zeitgeist and its dislike of formalism, it is still extremely dangerous to depart from the letter of precedent in negotiable paper. A glance at the examples of the fourteenth and fifteenth centuries is sufficient to show how slight are the changes in the form of a bill of exchange which the revolution of five centuries has produced.
But if in this one respect the negotiable instrument smacks of antiquity, in its more essential qualities it is wholly opposed to the spirit of early law. The alienability of rights in personam (to say nothing of proprietary rights) by simple endorsement or handing over of a document of title, the improvement of title by transfer, are very modern notions. It will be sufficient if we follow up the track suggested by the first of these qualities.
Choses in action are inalienable in early law for two reasons. In the first place the tribunals do not allow representation; or, in other words, the transferee is unable to enforce his claim because he is regarded by the court as a stranger to the proceedings. In the second, a chose in action does not permit of that corporeal and formal transfer which is essential to the legality of early conveyances. These two considerations give us the key to the history of negotiable instruments.
Primitive tribunals do not admit of representation. This is a rule with which every student of law is familiar. We need here only point out the extreme tenacity with which German Law held to the maxim.1 Even so late as the twelfth century, the clumsy Roman method of adstipulatio2 was used by the contracting party who wished to provide for the enforcement of his rights by a third person.
But there arrives a period in the history of every progressive people when this rule becomes a grievous nuisance, and all kinds of evasions are then attempted. According to the great authority of Brunner, modern Europe is indebted for the earliest successful efforts of this character neither to what we now call Germany,3 nor to France,4 but to the genius of the Lombard jurists, whose ideas, Teutonic in the main, differed in many important respects from those of the Transalpine Germans. Whether these differences, especially conspicuous in legal matters, were due to the geographical connection of the Lombards with the native soil of Roman Law, or to some race-peculiarity of the Lombard stock, is too great a question to be mooted here. Only it is of importance for English students never to forget the close affinity between the Anglo-Saxon and the Lombard, an affinity which shews itself in politics1 and law2 as well as in speech.
It is not, of course, to be expected that the earliest steps of a reform such as we are seeking should be found in legislation. Primitive legislators do not trouble themselves much about commercial convenience; they are even apt to look upon the rapid circulation of capital with grave suspicion. The art of the conveyancer, in which the Lombards were specially distinguished, is the origin of the reform.
Two great collections of early Lombard documents have recently been rendered accessible to the ordinary student. The first of these is the Memorie e Documenti per servire all’ istoria del Ducato de Lucca, the fifth volume of which contains a reprint of the cathedral documents of the 7th, 8th, 9th, and 10th centuries. During this period Lucca formed part of the princedom or duchy of Tuscany, itself a part of the Lombard Kingdom of Italy. Towards the close of the eighth century it became, of course, subject to the overlordship of the Frank empire; but the respect with which the conquerors treated Lombard institutions is well known.
The second collection is the recently edited Codex Cavensis, the reprint of the original deeds contained in the archives of the Cluniac monastery at La Cava, near Salerno, founded by Alferius Pappacarbone in the year 1011.3 Salerno, which had previously formed part of the Lombard principality of Beneventum, became in the year 843 (the year of the Treaty of Verdun), with the approval of its Frankish overlord, Ludwig the German, a separate duchy, and so remained until its conquest by Roger Guiscard in 1077. The only fact which makes against the character of the Codex as an exposition of pure Lombard practice, is the admittedly successful inroads of the Saracens into Southern Italy during the pre-Carolingian period. But it is unlikely that the Lombard lawyers would be seriously affected by Saracenic influence. Of course the bulk of the documents in both collections come long before the revival of the study of Roman Law in Italy.
Brunner arranges under four heads those clauses of the Lombard documents which aim at evading the strictness of the early law of transfer. But, as it is always an advantage to simplify classification where possible, we may be allowed to absorb his four classes into two, basing our arrangement rather on the nature of the object aimed at, than on the form of words by which that object is attained. Let it be understood that our examples are taken from all kinds of documents—gifts, sales, leases, bonds, and even wills.
Class I. Here the object of the conveyances is to provide specially for the enforcement of a right in personam, on behalf indeed of the grantee, but through the agency of a third person. This attempt gives rise to the two forms which Brunner has named (a) Exactionsklausel, and (b) Stellvertretungsklausel. The former runs thus:—per se aut per illum hominem cui ipse hanc cartulam dederit ad exigendum. It is found so far back as the year 771, in a curious document in which a monk makes over to a church (amongst other things) the right to avenge his death if he shall be murdered—i. e. (doubtless) the right to recover his wergild.1 A Lucchese document of the year 819 has a significant variation—aut ad illum homine(m) cui tu hanc pagina(m) pro animâ tuâ ad exigendumet dispensandumdederis.2 The et dispensandum, which appears again in a will of the year 836,3 refers to the dispensator, or clerical official who disposed of the deceased’s goods for the benefit of his soul. He forms an important link in the history of testamentary capacity. The Stellvertretungsklausel differs from the Exactionsklausel only in form. It runs—vel cui istum breve in manu paruerit invice nostra, and is to be found in numerous examples of the La Cava documents, from the early ninth century onwards.1 The important point to notice about both these variations is that they treat the transferee as the agent of the original grantee, not as an independent acquirer.
Class II. Here we come upon a different plan, which evidently contemplates an actual transfer of the beneficial right. This group of clauses is named by Brunner the Inhaberklauseln, and is subdivided by him into alternative and pure. His meaning will be apparent in a moment if we take an example of each subdivision. The alternative Inhaberklausel reads thus—tibi aut eidem homini qui hunc scriptum pro manibus abuerit,2 or, mihi seu ad hominem illum, apud quem brebem iste in manu paruerit.3 It is found in the middle of the ninth century. The reine Inhaberklausel is not quite so old. The earliest example quoted by Brunner is under the year 962. It runs thus—(ad componendum) ad hominem aput quem iste scribtus paruerit,4 and it is noteworthy that the earliest examples are nearly all concerned with wills, or at least mortuary gifts.5 The transition from the alternative to the pure Inhaberklausel simply consists in omitting the name of the original stipulator, and the step is easily explained by the hypothesis that the latter form was first used in cases which, in the nature of things, the stipulator could not expect to enforce his own claim.
The first class of clauses, which we may call, for brevity’s sake, the ‘representative’ clauses, seem rarely to have been found north of the Alps. The Bolognese Ordinance of 1454 shows distinct traces of their influence in Italy when it says:—Et quod liceat cuicunque, cuius intersit, per se, vel alium legitime intervenientem dictas Scripturas Librorum (deposit receipts) petereexecutioni mandaricontra Scribentem.6 And in the Stralsunder Stadtbuch for the years 1287-8 we get this interesting entry:—Ludekinus de Fonte dabit infesto beati Michaelis vel Gerardo dicto Repereuel suo nuntio cuicunque,dummodo apportaverit literam creditivam 10 mrc.1 But, with the greatest possible deference, it can hardly be said that the German phrase—wer diesen Brief mit ihrem Willen inne hat—conveys the full force of its alleged Latin equivalent—cui ipse hanc cartulam dederit ad exigendum. And of his alleged Stellvertretungsklausel—oder wer diesen Brief von ihretwegen inne hat2 —Brunner quotes no example, though the Stralsund entry may perhaps be said to give us a German instance of the Stellvertretungsklausel.
Moreover, of the pure Inhaberklausel, which seems to possess no special advantage over the alternative form, there appear to be but few early examples either in France3 or Germany.4 The alternative Inhaberklausel, on the other hand, had established itself firmly in western and central Europe by the end of the thirteenth century. Sometimes it is in a Latin form—quos dabunt praedicto Radolfo vel alicui de concivibus nostris qui presentem literam presentavit coram nobis.5 But it soon acquires a vernacular familiarity—joft den ghenen die dese lettren bringhen sal,6oder behelder des briefs,7ou à celui qui cette lettre portera.8
Perhaps the most curious point about the Inhaber clauses is that there seems to have been no necessity for the transferee of the claim to prove his title. We are, of course, familiar with the presumption of modern law in favour of the holder of negotiable instruments. But it is a little startling to find, so early as the eleventh century, the guardianship of a widow passing from hand to hand with a document. Yet in the year 1036 a certain ‘comes Petrus’ by his will left the guardianship of his wife, and all belonging thereto, to his germani Malfred and John or illi viro cuiscriptum in manu paruerit. Thirty years later, a certain clerk John appeared in court as guardian of the widow, and was accepted as such without a question on production of the document—in cuius manu, ut supra scriptum est, praedictum scriptum paruit.1 With regard to debts, we have an actual decision ad hoc in the fifteenth century, by the council of the famous city of Lübeck, the head of the Hanseatic League, and, by virtue of its appellate jurisdiction, the greatest authority on commercial law in Germany.
‘Herman Ziderdissen, burgher of Köln on the Rhine, appearing before the honourable Council at Lübeck, arrests Johan Cleitzen, burgher of the same, asserts and claims of him 100 Rhenish gulden, which the same Johan Cleitzen owed to Frank Greverôde, burgher of Köln, his heirs or holder of the letter (sînen erven ofte hebbern des brêves), and which the same John with his own hand, so he openly acknowledged and admitted, underwrote and with his signet sealed, which before the council at Lübeck was read, yet he refuses to pay the debt in arrear. Thereto Johan Cleitzen answers that Herman should shew his authority (macht) from Frank Greverôde. Thereupon the aforesaid Council at Lübeck decided that he has no right to it: As the letter contains the words “hebbere des brêves,” and he admitted that he had underwritten it, so must he answer thereto; if he has any objection to make, let it be brought forward as right is.’2
Here then is a clear recognition of the transferability of a bond with the alternative Inhaberklausel, at the end of the fifteenth century. Later on we shall see that there came a reaction in France which was not without its results. The English practice of the period seems to have been to make the bond payable to the original creditor vel suo certo attornato,1 and, to enforce this clause, Letters of Attorney, of which examples are given by Madox,2 were doubtless necessary. But it is time that we turn to the other side of the difficulty.
All early systems of law require for the transfer of rights a formal investiture or corporeal handling in the presence of the assembled community. Long after this corporeal transfer has become a mere form, symbolized by such survivals as the turf, clod, twig, knife, staff, &c., it continues to exercise a practical influence on conveyancing law. To the conservative force with which medieval Germany held to the Auflassung, a ceremony at first very real and practical, afterwards merely formal, modern Germany probably owes her important Grundbuch system.
It is, therefore, of great interest to notice that, while the other Teutonic races retained their symbolic investiture at least until the eleventh century, the Lombards, and their kindred Anglo-Saxons, had adopted the simpler and more modern form of traditio per cartam at a much earlier date. The Anglo-Saxon conveyance by boc or charter is found as early as the ninth century.3 In a Lombard document of the eighth century, to which we have previously referred, the donor of an advowson not merely transfers it by traditio cartae, but recites that he obtained his title in the same way.4 Perhaps the clearest evidence of the distinction is to be found in the directions to conveyancers contained in the Cartularium Langobardicum of the eleventh century.5 The imaginary pupil is directed to tradere per hanc pergamenam cartam venditionis (such and such land) ad Johannem, quod dehinc in antea a presenti die proprietario nomine faciat ipse et suiheredes aut cui ipse dederint. The same practice is to hold in the case of a Roman. But if the conveying party be a Salian, a Ripuarian, a Frank, a Goth, or an Alamman, the charter is to be placed on the ground, and upon it laid the knife, notched stick, clod, twig, &c.1 The purchaser then takes up the charter (levat cartam).
In some obscure way this peculiar difference appears to have connected itself with the early Lombard law of contract. Whatever may be the philosophical explanation of the appearance of the contract as a legal phenomenon, it is pretty certain that it represents historically a compromise between litigants, secured by oath, pledges, and (generally) hostages. The promisor is under no direct liability to the promisee; the latter must enforce his security either against the wadia or the fidejussores.2 The course of the Lombard law seems to have been this. Being familiar with the traditio per cartam in conveyances, it allowed the bond or document to act as the wadium in contracts. Naturally the particulars of the transaction are transcribed into the document, but the early cautio is not (according to the English dictum) the contract itself, nor even evidence of the contract, but, literally, the security for the contract.3 Two points illustrate this truth forcibly, and one of them is of direct interest for the history of negotiable instruments.
In the first place it will be observed that nearly all the early examples of cautio are penal stipulations. The Cartularium Langobardicum says expressly—Et in omnium fine traditionis adde: et insuper mitte poenam stipulationis nomine que est, &c.4 But we need not rely on dicta. The collections of Lucca and Salerno are full of eighth and ninth century examples.5 In fact we might almost lay it down that no transaction was completed at that time without a penal stipulation.
The other point to notice is the extreme care with which many early cautiones stipulate for the return of the document on payment. Of course this clause only occurs in actual bonds for the payment of money, not in conveyances containing merely penal stipulations. But as early as the time of the Angevin and Marculfian Formularies (seventh and early eighth centuries) we find the clause et caucionem meam recipere faciam,1 or even, cautionem absque ulla evacuario intercedente recipiamus.2 The evacuaria or Todbrief was a formal document cancelling a bond alleged by the person claiming on it to have been lost. There is an example so late as the fourteenth century,3 and as it was issued by the Duke of Austria himself (though he was only concerned in the matter as protector of the Jew creditor) we may gather that great importance was attached to the procedure. But, historically speaking, the stress laid upon the production of the cautio is easily demonstrable, and quite natural. Several of the Lombard documents of the ninth century make the express condition—et eam (paginam) nobis in judicio ostiderit,4 or, simply, et eam mihi ostenderit.5 If the creditor could not produce the pledge, the presumption was that he had realized on it; and, as the debtor was under no personal obligation to pay him, he naturally declined to do so except in return for his wadium.
It is hardly going too far to say that this is at least a plausible explanation of the doctrine of presentation. The necessity for the production of a bond (the profert of English law) had become established before the appearance of bills of exchange. Qui presentem literampresentaverit,6joft den ghenen die dese lettren bringhen sal.7 Thus the existence of the fourth or presenting party, who appeared in our first examples,1 is amply accounted for. The praesenteerder and the meister van den brieff continue as separate persons in the Netherlands till the beginning of the seventeenth century.2
We have seen already that, by the end of the fifteenth century, presentation of Inhaberpapier was held to be sufficient without further proof of title. This had, probably, always been the Lombard rule, but the northern Germans had long held to the necessity for a special Willebrief, or documentary transfer. There was indeed a theory that this document must have three seals, that of the transferor and those of two witnesses.3 But the Lombard rule ultimately prevailed.
We have now arrived at the point at which biology passes into history. The mercantile world is familiar, in the middle of the thirteenth century, with bonds or acknowledgments of debts which, though given originally to A, can be enforced by B, upon his production of the original document, with or without document of transfer. In the middle of the fourteenth century the mercantile world is familiar with bills of exchange in the modern sense. How was the intermediate step taken?
Without professing any detailed knowledge of the transition process, it is possible for us to lay our hands on instruments which are clearly in the transition-stage. Let us read this document, dated 124⅞, from the archives of Marseilles:—
Ego W. de sancto Siro, civis Massilie, confiteor et recognosco vobis Guidaloto Guidi et Rainerio Rollandi, Senensibus, me habuisse et recepisse ex causapermutacionis seu cambha vobis £216 13s. 4d., pisanorum in Pisis, renuncians,4&c.; pro quibus £216 13s. 4d., dicte monete promicto vobis per stipulationem dare et solvere vobis vel Dono de Piloso vel Raimacho de Balchi consociis vestrisvel cui mandaveritis 100l. turonensium apud Parisius in medio mense aprilis et omnes depensas et dampna et gravamina quae pro dictodebito petendo feceritis vel incurreritis ultra terminum supradictum credendo inde vobis et vestris vestro simplici verbo absque testibus et alia probatione; obligans, &c. Actum Massiliaejuxta tabulas campsorum.Testes (4). Factum fuit indepublicum instrumentum.1
Thirty years later comes the following document from the archives of Köln:—
Walleramus dictus de Juliaco viris prudentibus et amicis suis carissimis, judicibus, scabinis, magistris civium et universis civibus Coloniensibus quicquid potest dilectionis et honoris. Significo vobis presentibus, quod ratum et gratum habeo, quod vos detis et assignetis centum marcas, quas michi solvere tenemini in festo beato Martini hiemalis nunc futuro, Friderico dicto Schechtere civi Coloniensi, et vos clamo per praesentes quitos et absolutos de solutione dictarum centum marcarum in dicto termine facienda. In cuius rei testimonium sigillum meum duxi praesentibus apponendum. Datum Colonie 6 kalendas Maii, anno Domini, 1279.2
Viris discretis dominis Hermanno et Thidemanno de Warendorp, consulibus Lubicensibus, Hinricus de Lon necnon Johannes Pape salutem in omni bono. Comparavimus et emimus de Henrico Longo, fratre Johannis Longi, 10 libras grossorum. Promittimus sibi solvere pro quilibet librum 9 marcas et 12 denarios in 14 diepost visionem presentis.Petimus ut dictam pecuniam solvatis nomine praedicti Hinrici Johanni fratri suo. Valete semper. Datum in cena domini. Petimus, ut hiis et aliis bene persolvatur.3
This last example is of the year 1341, two years later than the first true Bill of Exchange quoted above.4 The Marseilles document is by far the most valuable, as it shows us, almost beyond a doubt, the nature of the process which was going on. The purchasers of the bill do not wish merely to change their money from Pisan to French coin; they wish also to have it remitted to Paris. W. de St. Cyr is a professional campsor or dealer in money, possibly with the actual right of coinage. He receives from Guidi and his partners a sum of Pisan money, and gives them, as we should say, a bill on Paris payable to order. The bill is attested by witnesses and becomes a public document (publicum instrumentum). The whole transaction is in striking accordance with the Piacenza Ordinance of 1391,1 which compels campsores to give a written acknowledgment to their depositors confessing that they have received the money deposited with them, and declaring that the acknowledgment, as well as the entries in the books of the campsores, shall be evidence in favour of the creditors, sicut crederetur et fides daretur si dicta scriptura et dicti libri essent solemnepublicum instrumentum. Nothing could, in fact, be more tempting, and nothing more dangerous, than to treat the Bill of Exchange as the counterpart of the old Roman literal contract.
Of the endless points which present themselves with regard to the law of negotiable instruments in the Middle Ages, only one can be touched upon here. We have seen that, by the end of the fifteenth century, the holder of a bond or bill, containing the Inhaberklausel, was not obliged to show his title. Against this rather advanced doctrine the French writers of the sixteenth century protested, with remarkable success.2 Founding themselves on the maxim—un simple transport ne saisit point—and carefully cutting out the following words—sans apprehension—they succeeded in compelling the transferee of a bill of exchange to produce evidence of his title.3 This reactionary step seems to have led, in the first place, to the introduction of bills drawn in blank (promesses en blanc), which were used for the concealment of usurious transactions,4 and were on that account forbidden by various Parliamentary arrêtes of the early seventeenth century. Then recourse seems to have been had to the old French form of order or mandat—à son command, à son command certain,5 &c.—of which examples are found in the thirteenth century. Naturally this form required some evidence of title, but the practice of indorsement had fully established itself by the middle of the seventeenth century. The great Ordonnance de Commerce of 16731 distinguishes carefully between (a) endossement, the mere signature of the payee, which only made the holder an agent, and (b) ordre, containing the date and the name of the purchaser (qui a payé la valeur en argent, marchandise, ou autrement), which made the indorsee full owner, sans qu’il ait besoin de transport, ni de signification. How the practice of indorsement was introduced it is difficult to prove; but it is easy to see that the persistent use of the terms brief, lettre, might keep alive the idea of the original form of the document, and thus a writing which was, in effect, an address to a new holder, would come naturally where the address of a letter usually came—i. e. on the back. We have seen already, that in the earliest examples of bills of exchange the name of the drawee was indorsed.
This paper merely attempts to put together a few incidents in the early history of the negotiable instrument. It does not pretend to ascertain its origin. Claims have been made, with much plausibility,2 for a Jewish parentage; and Oriental evidence must certainly be examined with care before it is rejected. But such a task requires scholarship.
[1 ]This Essay was first printed in the Law Quarterly Review, 1893, vol. IX, pp. 70-85.
[2 ]A biographical note of this author is prefixed to Essay No. 2 in Volume I of this Collection.
[3 ]Cf. Byles, preface to 1st edition; Chitty, Bills of Exchange, 11th edition, pp. 1-3; Jencken, Compendium, &c., Introduction.
[1 ]E. g. the late Sir Alexander Cockburn, in Goodwin v. Robarts, L. R. 10 Exch. pp. 347 et seq.
[2 ]Chitty, p. 2; Jencken, p. 1.
[3 ]In the 3 Ric. II, c. 3 (Chitty, p. 2).
[4 ]Martin v. Boure, Cro. Jac. 6 (ib.).
[5 ]L. R. 10 Exch. p. 347.
[6 ]Versuch einer historischen Entwickelung des wahren Ursprungs des Wechselrechts. (Göttingen, 1797.)
[7 ]Wechselrechtliche Abhandlungen. (Leipzig, 1859.)
[8 ]Studien in der Romanisch-kanonistischen Wirthschaft- und Rechtslehre. (Berlin, 1874.) [The valuable results of Goldschmidt, in his Handbuch des Handelsrechts, Pt. I, Universalgeschichte, 3d ed., 1891, should be compared.—Eds.]
[1 ]Printed in Martens, App. p. 18.
[2 ]Martens, App. p. 107.
[3 ]Recueil Général des anciennes Lois françaises, by Isambert, Jourdan, and De Crusy (ed. 1825), x. 451-6. The Ordinance is dated 1462.
[4 ]There appears to have been an earlier charter by Charles VII, in 1443, but this is not printed (cf. vol. ix. p. 119).
[1 ]App. p. 2, where Pegoletti’s 45th chapter is reprinted.
[2 ]Salvetti, Antiquitates Florentinae (1777), § 93, p. 62.
[1 ]Printed by Brunner, Zeitschrift für Handelsrecht, xxii. 8. Martens (p. 65) speaks of an example of the year 1325, quoted by Baldus de Ubaldis.
[1 ]Zeitschrift für Handelsrecht, xxii. 7.
[2 ]As to the dates of the various codes comprised in this compilation, cf. an interesting note by Brunner, Zeitschrift für Handelsrecht, xxii. 4, n. 5. They are much later than the Bruges decisions.
[1 ]It is well known that, in the Middle Ages, the town-corporations frequently acquired or absorbed the jurisdiction formerly belonging to the local Schöffen or scabini.
[2 ]Printed in Martens, App. pp. 56-63.
[1 ]Printed in Zeitschrift für Handelsrecht, xxii. 22-24.
[2 ]According to the Bolognese Ordinance of 1454, the protest had to be made before a judex (Martens, App. p. 61). Had this precaution been adopted in the case quoted, in all probability the fraud would have been discovered.
[1 ]Schröder, Lehrbuch der deutschen Rechtsgeschichte, p. 709. [Compare Brunner’s essay on The Early History of the Attorney in English Law, translated in the Illinois Law Review, 1908, III, 257.—Eds.]
[2 ]Cf. Loersch and Schröder, Urkunden zur Geschichte des deutschen Rechtes, Nos. 5, 25, 56, 60, 63, 68, 74, 81, 105.
[3 ]Zeitschrift, xxii. p. 103.
[4 ]Das französische Inhaberpapier, p. 30 and passim; [now reprinted in his Forschungen zur Geschichte des deutschen und franzosischen Rechts, 1894.—Eds.]
[1 ]See this idea worked out by Sohm, Fränkische Reichs- und Gerichts-Verfassung, p. 24-26.
[2 ]E. g. in questions of Dower and the Traditio per cartulam.
[3 ]Codex Cavensis, synopsis, p. ix. (It will interest British readers to know that to the expense of the edition there contributed, amongst others, the ‘Praesidens rebus Regni Britannici’ and the ‘Academia cui titulus Innertemple.’)
[1 ]Loersch and Schröder, No. 32.
[2 ]Memorie di Lucca, No. 424.
[3 ]Ib. No. 532.
[1 ]Cf. Codex Cavensis, vol. i. No. 11; vol. ii. Nos. 11, 221, 225, 242.
[2 ]Memorie di Lucca, v. 2, No. 825.
[3 ]Codex Cavensis, ii. No. 213.
[4 ]Codex Cavensis, ii. No. 218.
[5 ]See the examples quoted in the Zeitschrift, xxii. 505-510.
[6 ]Ordinance, xliii. § 3 (Martens, App. p. 57).
[1 ]Fabricius, Das älteste Stralsunder Stadtbuch, p. 67, No. 526 (also printed in Loersch and Schröder, No. 152).
[2 ]Zeitschrift, xxiii. p. 228.
[3 ]Das französische Inhaberpapier, App. 29, 57.
[4 ]See the rare examples quoted by Gareis, Zeitschrift, xxi. p. 372 n.
[5 ]Loersch and Schröder, No. 159.
[6 ]Loersch and Schröder, No. 161 (13th cent.).
[7 ]Ib. No. 294 (15th cent.).
[8 ]Das französische Inhaberpapier, p. 50 (13th cent.).
[1 ]De Blasius. Series Principum Salerni, App. p. iii, No. 1. Doubtless with the representative clauses the transferee had to show his authority (see the literam creditivam of the Stralsund entry). [An interesting controversy over the correctness of Brunner’s theory in this respect, as relating to the Codex Cavensis material, has arisen between Brandileone and Schupfer, two distinguished Italian legal historians; Brandileone, Le così dette clausole al portatore nei documenti medievali italiani (in Rivista di diritto commerciale e marittimo, 1903, vol. I, No. 5); Schupfer, Il diritto privato dei popoli germanici con speciale riguardo all’ Italia, 1907, vol. I, p. 214.—Eds.]
[2 ]Loersch and Schroder, No. 317.
[1 ]See Madox, Formulare Anglicanum, Nos. 641-645, 647-649, &c. There is a bond in 27 Hen. VIII. made payable to the king, his executors or assigns, but the exception in favour of the crown is well known.
[2 ]E. g. Nos. 107, 119.
[3 ]Earle, Land Charters, pp. 130, 139, 141, &c. These are grants by private owners. Royal and episcopal grants by boc occur much earlier, and there is a doubtful instance of a private grant in 692 (p. 13). The royal consent, however, seems to have been required even for private grants. For other early examples, cf. Birch, Cartularium Saxonicum, Nos. 30, 57, 81, &c.
[4 ]Loersch and Schröder, No. 32.
[5 ]Monumenta Germaniae, Leges, iv. p. 595. (Extracts given in Loersch and Schröder, pp. 69-70.)
[1 ]If the purchaser were an Alamman there was added the mysterious wandilanc.
[2 ]This is evident from the early example of the Edict of Rothar, caps. 359-366. (Mon. Germ. Leges, iv. 82.)
[3 ]The carta is sometimes expressly described as firmitas (Memorie di Lucca, v. 2, No. 14). [The position of the carta in conveyances is shown by the fact that it was not written on till after the traditio.]
[4 ]Loersch and Schröder, p. 69.
[5 ]Memorie di Lucca, v. 2, Nos. 18, 24, 26, 28, 30, 31, 33-37, 39, 44-46, &c. Codex Cavensis, Vol. i., Nos. 11, 13, 14, 15, 16, 20, 24, 26, &c. The penalty was usually in duplum, but a fixed sum was frequently named.
[1 ]Loersch and Schröder, No. 17.
[2 ]Ib. No. 18.
[3 ]Ib. No. 213. For earlier examples see Rozière, Recueil Général des Formules, I, Nos. 378-382.
[4 ]Memorie di Lucca, v. 2, No. 424.
[5 ]Ib. No. 285; v. 3, Nos. 1107, 1148.
[6 ]Loersch and Schröder, No. 159.
[7 ]Ib. No. 161.
[1 ]Ante, p. 55.
[2 ]Coutumes d’Anvers, vol. iv. p. 32, art. 42 and 43.
[3 ]Loersch and Schröder, No. 275.
[4 ]I. e. probably renuncians exceptionem pecuniae non numeratae vel aliam exceptionem de jure competentem. (See Bolognese Ordinance, xliii. § 1, Martens, App. p. 56.)
[1 ]Quoted in Brunner, Das französische Inhaberpapier, p. 73.
[2 ]Loersch and Schröder, No. 147.
[3 ]Ib. No. 196.
[4 ]Ante, p. 55.
[1 ]Martens, App. p. 18.
[2 ]Das französische Inhaberpapier, p. 68.
[4 ]Tit. vi. of the Ordinance of 1673 lays down specific rules on the subject of Les Intérêts du change et du rechange.
[5 ]Quoted in Das französische Inhaberpapier, p. 74.
[1 ]Isambard et De Crusy, xix. p. 100.
[2 ]Auerbach, Jüdische Obligationenrecht, i. 283 and note.