forbids enforcement of the instrument even by a holder in due course, such a holder, according to the better view, cannot recover under the statute any more than under the previously prevailing law. There are, however, decisions which lay stress on the words of the statute as showing that such illegality as formerly subjected a note to an absolute defense now affords merely a personal one. "Section 57 changes the law of some states by allowing (as it properly should) a holder in due course to recover the full amount of a note subject to an equitable defense, though the holder bought it at a discount." CHAPTER XI NATURE AND FORMATION OF THE RELATIONS INVOLVED A. IN GENERAL §341. Historical Note on Business Organization and the Law. -To understand the modern law of business organization it is necessary to bear in mind that it owes its origin to an attempt on the part of courts to decide controversies of a very modern kind on the basis of such precedents as they happened to have at hand. When the English law, on which ours is based, became crystallized, business organization in the modern sense was, of course, non-existent. Even a hundred years ago the analogy readiest at hand for the ordering of the internal affairs of a business concern was the organization of the household. It is, therefore, no mere accident that law books until recently insisted upon dealing with the subject of Master and Servant as a branch of domestic relations. In fact, the very terms "master and servant" are primarily descriptive of a domestic rather than a business relation. It was a characteristic of the system of apprenticeship that the business unit and the household unit were identical; the master was simply the head of the household. In course of time, the first analogies became less and less applicable to the acutal conditions of business life. Other analogies were called in. In the nineteenth century the dominant idea with which courts met new conditions was the idea of Contract. Indeed, in the middle of the century, Theophilus Parsons made the extreme statement at the opening of his comprehensive work on Contracts that all law could be reduced by analysis to contract law. A little later, Sir Henry Maine gave |