48

nonnegotiable. The authorities, both courts and text-writers, have materially differed in respect to the nature of a due bill.1o

the instrument therein referred to as the "within note" to the payee designated in such instrument. Clark v. Marlow, 20 Mont. 249, 50 Pac. 713.

48. Byles on Bills (16th ed.), p. 34, says that an IO U is merely an acknowledgment of a debt due by virtue of some antecedent contract, and is not a promissory note. "But if the I OU contain an agreement that it is to be paid on a given day or on demand, it will be a promissory note, and must be stamped as such.

Due bills and I O U's.- In the case of Currier v. Lockwood, 40 Conn. 349, 16 Am. Rep. 40, a due bill in the following form was under consideration: "$17.14

BRIDGEPORT, January 22, 1863. "Due Currier & Barker seventeen dollars and fourteen cents, value received.

49

Devens, J., says: "In order to constitute a good promissory note there should be an express promise on the face of the instrument to pay the money. A mere promise implied by law, founded on an acknowledged indebtedness, will not be sufficient. (Story on Promissory Notes, § 14; Brown v. Gilman, 13 Mass. 158.) While such promise need not be expressed in any particular form of words, the language used must be such that the written undertaking to pay may fairly be deduced therefrom. (Commonwealth Ins. Co. v. Whitney, 1 Metc. (Mass.) 21.) In this view the instrument sued on cannot be considered a promissory note. It is It was held not to be a promissory an acknowledgment of a debt only, note. The court commented favorably and, although from such an acon the decision in the case of Smith v. knowledgment a promise to pay Allen, 5 Day (Conn.), 337, and stated may be legally implied, it is an imthat such case went to the extreme limit in holding the writing there given to be a promissory note, and did not "feel at liberty to go further in that direction than the court then went." In the case of Smith v. Allen, the words " on demand" were used, which were held to import a promise to pay. See also Mitchel v. Rome R. Co., 17 Ga. 574; Pepoon v. Stagg, 1 Nott & McC. (S. C.) 102.

"FREDERICK LOCKWOOD."

In the case of Russell v. Whipple, 2 Cow. (N. Y.) 536, the paper sued on read, "Due S., or bearer, $10." It was held a promissory note. And in Kimbal V. Huntington, 10 Wend. (N. Y.) 675, a paper, Due R. $325, payable on demand," was held admissible in evidence as a promissory note. Judge Nelson said: "The acknowledgment of indebtedness, on its face, implies a promise to pay the plaintiffs, and the payment by its terms is to be in money absolutely, on demand.”

49. Cases holding due bills not promissory notes. One of the leading cases holding that due bills or IO U's are not negotiable promissory notes is that of Gay v. Rooke, 151

plication from the existence of the debt, and not from any promissory language. Something more than this is necessary to establish a written promise to pay money. It was, therefore, held in Gray v. Bowden, 23 Pick. (Mass.) 282, that a memorandum on the back of a promissory note, in these words, 'I acknowledge the within note to be just and due,' signed by the maker and attested by a witness, was not a promissory note signed in the presence of an attesting witness within the meaning of the Statute of Limitations. In England an IO U, there being no promise to pay embraced therein, is treated as a due bill only. The cases, which arose principally under the Stamp Act, are very numerous, and they have held that such a paper did not require a stamp, as it was only evidence of a debt. (1 Daniel on Negotiable Instruments (3d ed.), § 36; 1 Randolph on Commercial Paper, § 88; Fesenmayer v. Adcock, 16 Mees. & W. (Eng.) 449; Melanotte v. Teasdale, 13 Mees. & W. (Eng.) 216; Smith v. Smith, 1 F. & F. (Eng.) 539; Gould v. Coombs, 1 C. B. (Eng.) 543; Fisher

As stated by Judge Story: "To constitute a good promissory note, there must be an express promise on the face of the instrument to pay the money; for a mere promise implied by law, founded upon an acknowledged indebtedness, will not be sufficient. Hence, it has been held that the mere acknowledgment of a debt without a promise to pay, is not a good promissory note." 50 And as held by Smith, J., in the case of Smith v. Allen:51 "Where a writing contains nothing more than a bare acknowledgment of debt, it does not in legal construction import an express promise to pay; but where a writing imports not only the acknowledgment of a debt but an agreement to pay it, this amounts to an express contract.' In that case the words " on demand" in a due bill were held to import and to be an express promise to pay." It was said in a leading New York case that "If there be in legal effect an absolute promise that money shall be paid, all the rest is a dispute about words. The whole inquiry is, does the paper import an engagement that money shall be paid absolutely? If it do, no matter by what words, it is a good note." 53 Some States have by

v. Leslie, 1 Esp. (Eng.) 425; Israel v. Israel, 1 Campb. (Eng.) 499; Childers v. Bouldnois, Dowl. & Ry. N. P. (Eng.) 8; Beeching v. Westbrook, 8 Mees. & W. (Eng.) 410.)

"While in a few States it has been held otherwise, the law as generally understood in this country is, that, in the absence of any statute, a mere acknowledgment of a debt is not a promissory note, and such is, we think, the law of this Commonwealth. (Gray v. Bowden, 23 Pick. 282; Commonwealth Ins. Co. v. Whitney, 1 Metc. (Mass.) 21; Daggett v. Daggett, 124 Mass. 149; Almy v. Winslow, 126 Mass. 342; Carson v. Lucas, 13 B. Mon. (Ky.) 213; Garland v. Scott, 15 La. Ann. 143; Currier v. Lockwood, 40 Conn. 349; Brenzer v. Wightman, 7 Watts & S. (Pa.) 264; Biskup v. Oberle, 6 Mo. App. 583.)"

Attention is also called to the following cases coinciding to a greater or less degree with that of Gay v. Rooke, supra: Fisher v. Leslie, 1 Esp. (Eng.) 426; Israel v. Israel, 1 Campb. (Eng.) 499; Tomkins v. Ashby, 6 B. & C. (Eng.) 541; Gould v. Combs, 1 C. B. (Eng.) 543, 50 E. C. L. (Eng.) 543; Garland v. Scott, 15 La. Ann. 143; Gray v. Bowden, 23 Pick. (Mass.) 282; Biskup v. Oberle, 6 Mo. App. 583; Carson v. Lucas, 13 B. Mon.

52

(Ky.) 213; Rush v. Haggard, 68 Tex. 674.

Cases holding due bills promissory notes.-There are cases in many of the States holding simple due bills to be promissory notes. Johnson v. Johnson, Minor (Ala.), 263; Fleming v. Burger, 6 Ala. 373; Huyck v. Meador, 24 Ark. 191; Lee v. Balcom, 9 Colo. 216, 11 Pac. 74; Jacquin v. Warren, 40 Ill. 559 (but see Sears v. Wesleyan University, 28 Ill. 183, and Bowles v. Lambert, 54 Ill. 237; in the latter case a paper stating "I owe the estate of Z. W. $190.15, May 13, 1863," was held to be a mere statement of account, and not a promissory note); Long v. Straus, 107 Ind. 94, 57 Am. Rep. 84; McGowen v. West, 7 Mo. 569, 38 Am. Dec. 468; Brady v. Chandler, 31 Mo. 28; in the case of Cummings v. Freeman, 2 Humph. (Tenn.) 143, a writing in these words, "Due B. two hundred dollars, borrowed Oct. 21, 1838," was held to be a promissory note; Hopson v. Brunwankel, 24 Tex. 607, 76 Am. Dec. 124.

50. Story on Promissory Notes, § 14.

51. 5 Day (Conn.), 337.

52. Currier v. Lockwood, 40 Conn. 349, 16 Am. Rep. 40.

53. Luqueer V. Prosser, 1 Hill (N. Y.), 259. But in the case of Shel

statute extended the law of bills and promissory notes to all instruments in writing whereby any person acknowledges any sum of money to be due to any other person."

54

c. Order to pay.— A bill of exchange to be valid must contain an absolute and unconditional order to pay. The language used in expressing the order is not material. But it must be more than the request for the granting of a favor.55 Judge Story has stated the true rule to be "to hold the mere drawing of a bill to be the demand of a right, and not the asking of a favor, in all cases where the language is susceptible of two interpretations; and to deem it a favor only, when the language used repels in an unequivocal manner, the notion that it is claimed as a right." 5 Any expression amounting to an order or direction is sufficient. The word "pay itself is not indispensable.57 Any synonymous or equivalent expression will suffice, as "credit in cash;" 58 and an order drawn on a third person, at the foot of an account for services done, ex

66

don v. Heaton, 88 Hun (N. Y.), 535, 34 N. Y. Supp. 856, a paper reading, $178.33. Due Mrs. M. E. Sheldon, one hundred and seventyeight, 33-100 dollars. Rouses Point, April 29, 1863. (Signed) R. Heaton," was held to be a promissory note, though nonnegotiable, and that, as no time of payment was mentioned therein, it was payable immediately. This case seems to be at variance with other New York cases, since in all of them words were used in the instrument which imported that the amount specified was absolutely payable.

In the case of Kimball v. Huntington, 10 Wend. (N. Y.) 675, the instrument read, "Due A. B. $325, payable on demand," and it was held to be a promissory note. The court, in this case, said that "the acknowledgment of indebtedness on its face implies a promise to pay;" but did not pursue a discussion of the question, but it was not properly before the court.

"Payable." The word "payable," when used in a certificate of deposit, unquestionably imports a promise to pay the sum deposited. Richer v. Voyer, L. R., 5 P. C. (Eng.) 476. See also Johnson School Township v. Citizens' Bank, 81 Ind. 515, in which a writing, "Due from A. to B. or order, payable on, etc., payable at," etc., was held to be a good promissory note; Mitchell v. Rome, etc., R. Co., 17 Ga. 574, where the words, "Due payable on demand,"

56

were held to import a promise to pay and constituted a due bill a promissory note.

54. R. S. Ill., chap. 98, § 3 (Hurd's Ed., 1901); Horner's Anno. Stats., Ind., chap. 89, § 5501; Code of Iowa, 1897, § 3045; Mississippi Code, 1880, §§ 1123, 1124.

55. In the case of The King v. Ellor, 1 Leach (Eng.), 323, an order in the following terms was in controversy: "Messrs. Longer: Please to send ten pounds by the bearer, as I am ill I cannot wait on you. Elizabeth Wery," was held to be a mere letter requesting the loan of money and not an order for its payment.

In the case of Little v. Slackford, 1 M. & M. (Eng.) 171, 31 R. R. 726, the instrument read: "Mr. Little, please to let the bearer have seven pounds, and place it to my account, and you will oblige your humble servant, R. Slackford," was held not to be a bill of exchange. And Lord Tenterden said: "The paper does not purport to be a demand by a party having a right to call on the other to pay. The fair meaning is you will oblige me by doing it." See also Russell v. Powell, 14 Mees. & W. (Eng.) 418. 56. Story on Bills of Exchange, p. 57. Byles on Bills (16th ed.), p. 92. 58. Ellison v. Collingridge, 9 C. B. (Eng.) 570.

44.

pressing a sum certain as due by the debtor on such account, and requesting such third person to pay the account, and charge it to the debtor is a bill of exchange.59 The introduction of ordinary words of civility or politeness, as "please pay, etc.," are not to be so construed as to raise a presumption that a favor is asked rather than a right demanded.60 A written request made by one person upon another to credit a third person upon a book account with a certain sum of money has been held not to be a bill of exchange." 36. Promise or order to pay must be unconditional.

a. In general.— One of the essentials of the negotiability of a bill or note is that it contain an unconditional promise or order to pay a sum certain in money." 62 To render a bill or note negotiable it must be payable at all events, and cannot be dependent upon any contingency.63 As was observed by Lord Kenyon in the case 59. Hoyt v. Lynch, 2 Sandf. (Super. ply that a favor is asked." See also Ct. N. Y.) 328; in this case the follow- Biesenthal v. Williams, 62 Ky. 329, 85 ing writing was added at the foot of Am. Dec. 629; Jarvis v. Wilson, 46 a bill for services rendered: "Mr. J. Conn. 90, 33 Am. Rep. 18; Harris v. Lynch: Please pay the above bill, Dolmetch, 12 N. Y. St. Rep. 456; Spurbeing the amount for trimming your gin v. McPheeters, 42 Ind. 527; Mehlhouses on South Sixth street, and berg v. Tisher, 24 Wis. 607. charge the same to our account, and much oblige yours, Smith & Woglom." See also Knefel v. Flanner, 66 Ill. App. 209; O'Donnell v. Smith, 2 E. D. Smith (N. Y.), 124.

60. Words of civility.-In Ruff v. Webb, 1 Esp. (Eng.) 129, the instrument was in the following form: "Mr. Nelson will much oblige Mr. Webb, by paying to J. Ruff or order, twenty guineas on his account;" it was held a bill of exchange.

In the case of Wheatley v. Strobe, 12 Cal. 92, 73 Am. Dec. 522, the instrument read: "Sac City, July 18, 1857. Mr. Strobe: Please pay the bearer of these lines two hundred and thirty-six dollars, and charge the same to my account. E. D. Wheatley." The court said: "The order possesses all the requisites of an inland bill of exchange. It contains a direction for the payment of money by one person to another, absolutely and at all events. As no time is specified, it is to be taken as payable at sight. No further particulars than these are essential to constitute a bill of exchange. The insertion of the word "please " does not alter the character of the instrument. This is the usual term of civility, and does not necessarily im

66

61. Woolley v. Sergeant, 8 N. J. L. 262, in which case the writing was in these words: March 24, 1822. Mr. David Sergeant, please to credit John Woolley, or bearer, thirty dollars, and I will pay you by the tenth day of April next, and you will oblige your friend. John Miller." The court said: "The instrument giving rise to the present dispute amounts neither to a bill of exchange under the custom of merchants, nor to a negotiable note under the provisions of the statute; for it does not require Sergeant to pay a cent of money; but only to give credit on a book account; and it confines this request of credit to Woolley himself; so that in the nature of things it does not admit of being indorsed over to another person, nor of entering into circulation like mercantile paper from hand to hand; nay, it does not remain in the hands even of the person in whose favor it is drawn."

62. Neg. Inst. Law (N. Y.), § 20; ante, p. 161.

63. Instrument must be payable at all events.- Chitty on Bills (p. 134), contains the following enunciation of the general rule: “The money must be payable at all events, not dependent on any contingency, either with regard

64

of Carlos v. Fancourt: "It would perplex commercial transactions, if paper securities of this kind were issued into the world, incumbered with conditions and contingencies, and if the person to whom they were offered in negotiation were obliged to inquire when these uncertain events would probably be reduced to a certainty." Whether an instrument is negotiable must appear on its

Minnesota.- Cooper v. Brewster, 1 Minn. 94.

Mississippi. Hart v. Taylor, 70 Miss. 655, 12 South. 553.

New

Hampshire.

Matthews V.

to event, or with regard to fund out of which payment is to be made, or the parties by or to whom the payment is to be made." Story on Promissory Notes (§ 22) Nebraska-Grimison v. Russell, 14 says: "To make a written note for Neb. 521, 16 N. W. 819, 45 Am. Rep. the payment of money a valid promis- 126. sory note the money must be payable absolutely, and at all events, and not Crosby, 56 N. H. 21. New be subject to any condition or continYork. Dykers V. Leather gency." Manufacturers' Bank, 11 Paige, 612; See the following cases, which are Austin v. Burns, 16 Barb. 643; Skilgenerally applicable to the proposition len v. Richmond, 48 Barb. 628; Lofthat negotiability is dependent upon tus v. Clark, 1 Hilt. 310; James v. the fact that the instrument is uncon- Hagar, 1 Daly, 517; White v. Haight, ditionally payable at all events:

-

16 N. Y. 310; Loomis v. Ruck, 56 N. Y.

Alabama.- Waters v. Carleton, 4 462. Port. 205.

Arkansas. Henry v. Hazen, 5 Ark.

401.

Colorado.- Jennings v. First Nat. Bank, 13 Colo. 417, 22 Pac. 777, 16 Am. St. Rep. 210.

Connecticut.- First Nat. Bank v. Alton, 60 Conn. 402, 22 Atl. 1010; Hine v. Roberts, 48 Conn. 267.

Georgia.- Pool v. McCrary, 1 Ga. 319, 44 Am. Dec. 655; Hodges v. Hall, 5 Ga. 163.

Illinois. Kelley v. Hemmingway, 13
Ill. 604, 56 Am. Dec. 474; Baird v.
Underwood, 74 Ill. 176; Kingsbury v.
Wall, 68 Ill. 311; Chicago Trust &
Sav. Bank v. Chicago Title & Trust
Co., 190 Ill. 404, 60 N. E. 586, 83 Am.
St. Rep. 138.

Indiana.-Hays v. Givin, 19 Ind. 19;
Cochran v. Nebeker, 48 Ind. 459.
Iowa.-State v. Stratton, 27 Iowa,
420, 1 Am. Rep. 282.

Kansas.-Killam v. Schoeps, 26 Kan. 310, 40 Am. Rep. 313.

1

Kentucky.- Nichols V. Davis, Bibb, 490; Strader v. Batchelor, 8 B. Mon. 168.

Maine.- Legro v. Staples, 16 Me. 252; White v. Cushing, 88 Me. 339, 34 Atl. 164.

Massachusetts.- Coolidge v. Rug gles, 15 Mass. 387; Grant v. Wood, 12 Gray, 220.

Pennsylvania.- Woods v. North, 84 Pa. St. 407, 24 Am. Rep. 201; Citizens' Nat. Bank v. Piollet, 126 Pa. St. 194, 17 Atl. 603, 12 Am. St. Rep. 860, 4 L. R. A. 190; Iron City Nat. Bank v. McCord, 139 Pa. St. 52, 21 Atl. 143, 23 Am. St. Rep. 166, 11 L. R. A. 559. Tennessee. Shelton V. Bruce, 9 Texas.- Martin V. Shumatte, 62 Tex. 188.

Yerg. 24.

-

Vermont. Smilie v. Stevens, 39 Vt. 315.

Wisconsin.- Kirk v. Dodge County Mut. Ins. Co., 39 Wis. 138, 20 Am. Rep. 39; First Nat. Bank v. Larsen, 60 Wis. 206, 19 N. W. 67, 50 Am. Rep. 365.

See Century Dig. (Vol. 7), Bills and Notes, § 411.

64. 5 T. R. (Eng.) 482, 2 R. R. 647. In this same case, Ashurst, J., also said: "Certainty is a great object in commercial instruments, and unless they carry their own validity on their face they are not negotiable. On that ground bills of exchange which are payable only on a contingency are not negotiable because it does not appear on the face of them whether or not they will ever be paid. The same rule then that governs bills of exchange in this respect must also govern promissory notes."