in the Superior Court of the county where he resides; but if the bill is to be paid where the creditor resides, or at some other place, the suit may be tried there. The creditor may bring his suit in the Superior Court of the county where he lives or has his place of business, in any event, and the suit will be tried there, unless the debtor appears and moves for the transfer of the case to the Superior Court of the county of his own residence. Section 570.-ATTACHMENT OF DEBTOR'S PROPERTY IN SUIT TO COLLECT ACCOUNT.What property of the debtor is the subject of attachment, to secure the collection of an account, in a suit by the creditor or his assignee, and what property is exempt from attachment and execution, will be found fully stated under the head of "Attachments and Executions." Section 571.-MEANS FOR COLLECTION TO BE EMPLOYED BY AGENT.-Authority of an agent to collect implies and includes the right on his part to use all the ordinary means for collection, and among these are the employment of attorneys and the commencement of suits. Section 572.-PAYMENT TO WIFE OF CREDITOR. Where a man's wife is in the habit of transacting business for him, receiving and paying out money for him with his consent, payment to her of a debt due him in his presence, without objection from him, is a payment to him. Section 573.-PAYMENT OF NOTE TO SUPPOSED AGENT.-A party who in good faith makes payments upon a promissory note to one whom he has reason to believe is the authorized agent of the holder thereof, and whose acts in receiving such payments have come to the knowledge of the holder, and have not been repudiated by him, cannot be held for the money so paid to the agent. Section 574.-TAKING GOODS FOR CREDITORS' CLAIMS.-Where creditors, after receiving an offer of a bill of sale from their debtor, assign their claims to a collecting agent for the purpose of conducting the transaction, with authority "to take the goods in full of the creditor's claims," the agent has authority to agree with the debtor that the sale shall be conditional, and that the goods will be surrendered to him, when enough is realized from the sales to satisfy the claim. Section 575.-ACCEPTING PROMISSORY NOTE. -Under authority to settle with the debtor, and take anything he can get, an agent has power to accept a promissory note. Section 576.-COLLECTION OF NOTES BY AGENT.-Authority given an agent to collect money, due on a note and mortgage, is not authority to the agent to accept a conveyance of the mortgaged premises in payment. One who holds a note for collection cannot, without authority from the payee, agree to discharge one of the joint makers upon payment by him of a part of the sum due. Although a mortgagee has authorized an agent to collect interest and to receive payment of the principal when due, the agency does not extend to receiving payment of principal before maturity. The existence of an agent's authority to receive payment of notes may be inferred from the mutual conduct and relations of the parties, or from the general nature of the transactions in which they are concerned and the circumstances surrounding them. Section 577.-APPLICATION OF PAYMENTS ON ACCOUNT.-Where a payment is made upon general account, with no direction as to its application, the law applies it to the oldest items; that is, the first debits are to be charged against the first credits, and the debt paid according to priority of time. In the case of a running account between parties, where there are various items of debit on one side and of credit on the other, occurring at different times, and no special appropriation of payments constituting the credits has been made by either party, the successive payments and credits are to be applied in discharge of the items of debit antecedently due, in the order of time in which they stand in the accounts. In other words, each item of payment or credit is applied in extinguishment of the earliest items of debt, until it is exhausted. Section 578.-COLLECTION OF ACCOUNTS FOR LIQUORS SOLD.-The law of California prohibiting the collection of accounts for liquors sold at retail for any greater amount than $5.00 applies both to sales "at retail" and sales "by the drink." The word "retail" as used in the law refers to sales in quantities less than one quart. A dealer selling liquors in quantities less than one quart is a retailer, and cannot collect, on account of such sales, a sum greater than $5.00. A merchant selling wines and whiskies in amounts of gallons and half gallons can collect the whole amount of his bill. (Decided by the Supreme Court of California, in the case of Bettencourt vs. Sheehy, which decision is printed in Vol. XXXIX of California Decisions, page 447.) Section 579.-FORM OF ASSIGNMENT OF AN ACCOUNT.-The following is a form of assignment of an account: Know all men by these presents, that I,... of........, State of California, in consideration of.. dollars to be paid by...... ....of..... .., State of California, the receipt whereof is hereby acknowledged, do hereby sell, assign, and transfer to said.... ...all and whatsoever sum or sums of money now due and becoming due to me from.... ..of...... State of California; to have and to hold the same to the said.. with power to collect the same in my name and as my attorney hereunto duly authorized, to his own use. It is expressly understood, however, that I, the said am forever to be kept and saved harmless by the said.. . . . ...from all cost or charge hereafter, in any way or manner, for and from the expense of the collection of the sum and sums hereby sold and assigned. In witness whereof I have hereunto set my hand and seal this.... .day of... 191.. (Seal.) PART III. NOTES AND MORTGAGES. Promissory Notes. Section 580.-WHAT IS A PROMISSORY NOTE.— The statute law of California defines a promissory note to be "an instrument negotiable in form, whereby the signer promises to pay a specified sum of money." But, while it is defined as an instrument "negotiable in form," it may be not negotiable, and still be a promissory note. And the law of the State, as well as the rules of commercial business, recognizes two classes of promissory notes, negotiable and non-negotiable. The difference between these two classes, what constitutes a negotiable note, and what is meant by a non-negotiable note,-will be found stated further on, in other Sections. Civil Code, Section 3244. Section 581.-WHO MAY BE PARTIES.-All persons capable of entering into a contract may be parties to a promissory note, and be bound by it. And all persons in California are capable of contracting except minors, persons of unsound mind, and persons deprived of civil rights. A minor in California is a male under the age of 21 years, or a female under the age of 18 years. A minor under the age of 18 cannot make a contract relating to real property, or relating to any personal property not in his immediate possession or control; but he may make any other contract in the same manner as an adult, subject to certain conditions, stated in the next Section. A person of unsound mind, entirely without understanding, as an idiot or lunatic, has no power to make a contract of any kind; but a |