
    Case No. 6,800.
    GREGG v. WESTON et al.
    [7 Biss. 360; 
       9 Chi. Leg. News, 175.]
    Circuit Court, D. Indiana.
    Feb. 14, 1877.
    Promissory Note — Jurisdiction or United States Court.
    1. The statutes of Indiana make all promissory notes negotiable so far as to vest the property in each indorsee successively; but unless a note is made payable to order or bearer at a particular bank, whatever equity the maker was entitled to against the payee he may assert against any in-dorsee. Under such a statute the United States courts have no jurisdiction of an action by an assignee of a note not made payable at a bank, as such a note is not a “promissory note negotiable by the law merchant.”
    [Cited in Porter v. Janesville, 3 Fed. 619; Bank of Sherman v. Apperson, 4 Fed. 31; Hardin v. Olson, 14 Fed. 705.]
    2.. The statutes of a state enter into and become part of a note made in that state.
    [This was a suit by Noah S. Gregg against John Weston and M. G. Schultz.]
    
      Harrison, Hines & Miller, for plaintiff.
    Jacobs & Terrell, for defendant.
    Before DRUMMOND, Circuit Judge, and ORESHAM, District Judge.
   GRESHAM, District Judge.

Gregg, a- citizen of Oliio, sues Weston and Scbultz, both citizens of Indiana, on a note executed by Weston to Scbultz, and by tbe latter assigned to tbe plaintiff. Tbe note, a copy of which is made part of tbe complaint, was given at Kendallville,. Indiana, August 4th, XS70, payable to tbe order of M. G. Scbultz. Tbe defendants demur to tbe complaint on tbe ground that tbis court bas no jurisdiction.

Under tbe judiciary act of 1789 [1 Stat 73],. tbe circuit courts of tbe United States bare no cognizance of any suit on a promissory note in favor of an assignee, unless a suit might bave been prosecuted in sucb court on sucb note if no assignment bad been made. It is admitted that under tbis statute this action could not have been maintained. But it is urged by tbe plaintiff that this court bas jurisdiction of tbe action under tbe first section of tbe act to determine tbe jurisdiction of tbe circuit and district courts of tbe United States, approved March 13th, 1875 (IS Stat. 470;. That part of section 1 which is relied on by tbe plaintiff as conferring jurisdiction on this court reads as follows, viz: “Nor shall any circuit or district court bave cognizance of any suit founded on contract in favor of an assignee, unless a suit might bave been prosecuted in sucb court to recover thereon if no assignment bad been made, except in cases of promissory notes negotiable by the law merchant, and bills of exchange.”

In Indiana only notes payable to bearer or order at a bank in tbis state are negotiable as inland bills of exchange. 1 Davis’ St. Ind. p. 636, § 6. The question is, what is meant by tbe words “promissory notes negotiable by tbe law merchant” in tbe act of congress? The plaintiff insists that congress contemplated all promissory notes negotiable at common law or by tbe statute of Anne. I think congress meant by this language, notes having tbe qualities of promissory notes negotiable by the law merchant, namely, notes wbicb, in the bands of a bona fide purchaser for value before maturity, were subject to no equities in favor of tbe maker. The note sued on was given in Indiana and payable in Indiana, but not at a bank in this state, so that, by the law of Indiana, whatever equities the maker was entitled to as against the payee be may assert against any in-dorsee. That was tbe law of tbe contract. Tbe statute of the state entered into and became a part of tbe note. Holloway v. Porter, 46 Ind. 62; Dundas v. Bowler [Case No. 4.141]; Brabstou v. Gibson, 9 How. [50 U. S.] 263.

Tbe statute already cited makes all promissory notes-negotiable so far as to-vest tbe property in each indorsee successively, but unless a note is made payable to order or bearer at a particular bank in this state, it cannot be said to possess all tbe privileges or immunities of a note negotiable according to tbe law merchant The statute of Anne has generally been adopted in tbis country, but bas never been adopted in tbis state,

This opinion bas been submitted to my Brother DRUMMOND, and be concurs therein. Tbe defendant’s demurrer is sustained.

See Seckel v. Backhaus [Case No. 12,599].  