West Virginia Law Review

Document Type



The use of commercial instruments in trade and business dates from antiquity. Wigmore has called attention to the use of a note payable to bearer dating approximately from 2100 B. C. It was not until the 15th and 16th centuries that the use of negotiable instruments became widespread and common. While bills and notes in trade were used before this period, their true importance and common use date from the establishment of the great banking institutions of the continent. The laws relating to negotiable instruments arise from three sources, the law merchant, the common law and the Negotiable Instruments Law (NIL). The NIL, approved by the Conference of Commissioners on Uniform State Laws in 1896, was the first of the uniform laws promulgated in this country. The NIL was adopted in West Virginia in 1907, and by 1924 had been adopted in every state. Unfortunately, a large number of states modified or changed the language of various sections of the uniform act. West Virginia has varied the language in twenty-two sections. Lack of uniformity resulted not only from legislative change but from ambiguities in the NIL itself, and ambiguities resulting from judicial interpretation of the NIL. Some important points were simply not covered by the NIL and this contributed to the fact that the widespread adoption of the NIL did not achieve the goal of certainty and uniformity. Article 3 of the Uniform Commercial Code would replace the NIL. Comparing the Code with the NIL, one will readily observe that the NIL is not a model of legislative draftsmanship. While the NIL is at points ambiguous and at other points provides no answer, it is none-the-less more verbose than article 3 of the Code. The NIL consists of 198 sections while the Code article on commercial paper contains seventy-nine sections. Eleven sections of the Code cover matters not covered by the NIL. Total wordage of the Code's article 3 is about one-third less than that of the NIL. Article 3 of the Code is limited in its coverage to negotiable instruments. Unlike the NIL, it does not purport to cover any negotiable instrument other than "commercial paper" such as checks, drafts, certificates of deposit and promissory notes. Excluded from coverage under article 3 are investment securities, bonds, money and documents of title. The NIL does not apply to documents of title which are regulated by other uniform acts. As an aid in evaluating the Code and what effect its adoption would have upon the present laws of West Virginia every case decided by the Supreme Court of Appeals of West Virginia involving or relating to negotiable instruments from 1908 to 1962 (nearly 200 in number) was read and catalogued. The more significant and leading cases are cited with a digest of the cases or holding of the court. Unfortunately, many cases involving negotiable instruments have been decided by the Supreme Court of Appeals without ever mentioning the NIL. In some cases the court failed to state whether the instrument was negotiable. A summary of each section of article 3 is intended to furnish the reader with a general idea of the likely effect of each section upon the present law in the event of the adoption of the Code in West Virginia.



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.