and in some of the other States, it has been held that a note payable at a future day certain, or earlier in the option of the maker,

time when the note may become payable is fixed, and it cannot become payable at any other time."

jection is that there is no certain 137.) The case at bar comes within time of payment fixed by the note. To the principle of these decisions. A nebe negotiable, a note must be payable gotiable note includes not only the at a time certain. The time of pay- contract between the maker and holder, ment may be fixed by being named but also the contracts between the inin the note or made to depend upon dorsee and the indorsers and maker. some event which must certainly hap- The objections to the negotiability of pen. Thus, a note payable at a cer- a note payable at a fixed time, or tain period after the death of the earlier, at the option of the holder, are maker is negotiable because the time as great as to a note payable at such of payment depends upon an event time or earlier, at the option of the which must certainly happen. So, a maker. In the latter case the note note payable on or at a certain period may be paid before the time named; after presentment or actual demand in the former, it may become payable made is negotiable because the pre- before that time. In the one case the sentment or demand, being an act of the holder, contemplated in the making of the note, and necessary to give it effect, is deemed to be a cerThere are a number of cases, howtain event. In the instrument under ever, that hold contrary to the last consideration, a time and event are case cited, the most important being named, either of which without the that of Protection Ins. Co. v. Bill, 31 other would make certain the time of Conn. 534, where it was held that the payment; so, if both were used in rule that a note, to be negotiable, must connection to fix one time, as three be payable absolutely, means only that years after demand, the note would be it must appear on its face that the payable at a time certain. But they maker's promise will be at some time are used to designate two separate absolutely enforceable, and where the times, at either of which the note may, event upon which the time and duty and at either of which it may not, be- of payment depend is one over which come payable. It is not negotiable as the holder will have entire control, payable at the time named, because there is no such uncertainty regarding whether it would become payable at it as renders the note nonnegotiable. the expiration of the three years is In the case of Louisville Banking Co. made to depend upon the uncertain v. Howard, 123 Ala. 380, 26 South. event of a demand, and while the 207, 82 Am. St. Rep. 126, it was held time is certain to come, it is uncertain that the negotiability of a note is not whether the note will then become affected, when made payable at a bank, payable. It is not negotiable as pay- by a stipulation authorizing it to apable upon the happening of a certain propriate on the note before its maevent within the three years, because turity, moneys of the maker on deit is not certain that a demand will posit in the bank. See also Hurd be made,- no demand being necessary v. Dubuque County Bank, 8 Neb. 10, to hold the maker, and the instrument 30 Am. Rep. 811; Smilie v. Stevens, itself, assuming that such demand may 39 Vt. 315; Hunter v. Clarke, 184 not be made. It is not a note payable Ill. 158, 56 N. E. 297, 75 Am. St. at a named time, because it may be- Rep. 160. come payable before that; whether it will become payable by lapse of time or by demand is uncertain and contingent, depending upon the option of the holder. A note payable at a future day certain or earlier, at the option of the maker or of a stranger, is not payable at a time certain, and is not negotiable. (Way v. Smith, 111 Mass. 523; Stults v. Silva, 119 Mass.

Where a note is made payable in installments, and provides that, upon failure to pay any one of such installments, it shall become due at the option of the holder, it is not thereby rendered nonnegotiable. See cases cited under § 39 (b), ante, and also Stark v. Olsen, 44 Neb. 646, 63 N. W. 37; Merrill v. Hurley, 6 S. D. 592, 62 N. W. 958; Clark v. Skeen, 61 Kan.

is not payable at a time certain and is not negotiable. In these cases no distinction is made between instruments payable at a certain date or earlier in the option of the holder and those instruments payable earlier at the option of the maker. The better reasoning seems to be in favor of holding a note payable at a fixed time or earlier in the option of the maker as due and payable on the day named and not before, and, therefore, negotiable. The Negotiable Instruments Law has been adopted in Massachusetts, and the rule as declared in the cases cited has, therefore, been modified if not overruled by statutory enactment."

i. Instrument payable at a fixed time after a specified event.— The provision of the Negotiable Instruments Law that an instrument payable at a fixed period after the occurrence of a specified event, certain to happen, although the time of happening be uncertain, is payable at a determinable future time, and is, therefore, certain as to time of payment, is not new, but is declaratory of the law as laid down by the courts. It was decided early in the eighteenth century that if the event on which the instrument is to become payable must inevitably happen some time or other, it is of no importance how long the payment may be in suspense. As where a note made payable a certain definite time after the death of the maker's father was held to be a negotiable promissory note."

526, 60 Pac. 327, 78 Am. Dec. 337. See contra, Kimball County v. Mellon, 80 Wis. 133, 48 N. W. 1100.

3. Way v. Smith, 111 Mass. 523; Stults v. Silva, 119 Mass. 137; Mahoney v. Fitzpatrick, 133 Mass. 151, 43 Am. Rep. 502.

was upon notes made payable by the defendant to a party therein named, or his order, a certain definite time after the death of the father, which notes were, after the death of the father, indorsed over to the plaintiff. It was held that these In the case of Brook v. Hargreaves, were negotiable promissory notes, be21 Mich. 254, 260, it was held that a cause the time of payment was cernote which may become payable at a tain to arrive. To the objection that time which cannot be made certain by the value of the notes could not be asany attainable means cannot be re- certained, Willes, J., says that, when garded as negotiable. A negotiable the age of a person is known, the value promissory note must be payable at a of his life can be calculated, and that, time which must certainly arrive in at all events, when the life of a man the future, upon the happening of can be insured its value will be assome event, or the completion of some certained. period not depending upon the future volition of any one.

A leading case on this subject is Hegeman v. Moon, 131 N. Y. 462, 30 4. Mattison v. Marks, 31 Mich. 421, N. E. 487. In that case the instru18 Am. Rep. 197. ment sued upon read as follows:

5. Rev. Laws of Mass., 1902, chap. 73. § 21.

6. Colehan v. Cooke, Willes (Eng.), 393; Gross v. Nelson, 1 Burr. (Eng.) 226.

7. Notes payable upon death of a person.-In Colehan v. Cooke, Willes (Eng.), 393 (1742), the action

"$1,976, 90-100.

"BROOKLYN, Feb. 8th, 1871. "One year after my death, I hereby direct my executors to pay to Joseph Hegeman, his heirs, executors, or assigns, the sum of nineteen hundred and

In a New York case it was held that a note payable ninety days after the dissolution of a partnership and the settling of the partnership books was not negotiable, because, while the partnership must be dissolved at some time, the books may never be settled.8 And a note payable a certain time after peace between the United States and the Confederate States was restored, was held not contingent upon the occurrence of an uncertain event, since peace must come at some time, and that the note was, therefore, negotiable."

10

j. Instrument payable upon a contingency. We have already considered in this chapter the nonnegotiability of an instrument payable upon a contingency." There are a few other cases which might be cited here as bearing upon the question of certainty as to time of payment. A note payable to a person "when he is 21 years old " is uncertain, as the person may never live to attain that age, and the note is, therefore, nonnegotiable.11 But it will be otherwise, if, from the other language of the instrument, it can be gathered that a period is absolutely fixed for the payment of the money at all events, and that the age of the party is referred to not as a contingent event, but merely as a mode of ascertaining that

"CORNELIA W. HEGEMAN."

The maker of the note died December 3, 1888, leaving a will which was duly probated, and a year thereafter the plaintiff presented the draft to the

executors

seventy-six dollars and ninety cents, St. Rep. 424, 12 L. R. A. 845. being the balance due him for cash In that case the instrument was in this advanced at various times by him to form: Thirty days after death I Adrian Hegeman, my son, and others, promise to pay Cornelius Carnwright as per statement rendered by him this fifteen hundred dollars, with interday, without interest. est. (Signed) Cornelius Carnwright." The Court of Appeals held that the promise was, in substance, that thirty days after the maker's death his estate should pay the sum promised by him in the note, but that the note was not negotiable because it contained no and demanded payment, which was refused. The defendants words showing that it was payable to demurred to the complaint, on the the order of the payee. See also Conn ground that it did not state facts V. Thornton, 36 Ala. 536; Bristol v. sufficient to constitute a cause of ac- Warner, 19 Conn. 7; Shaw v. Camp, tion. The demurrer was overruled in 160 Ill. 425, 43 N. E. 608; Price v. the Special Term, which decision was Jones, 105 Ind. 543, 55 Am. Rep. 230; affirmed by the General Term, and the Crider v. Shelby, 95 Fed. 212; Miller case was carried to the Court of Ap- V. Western College of Toledo (Ill.), peals. The Court of Appeals held that 52 N. E. 432. the instrument was a promissory note and that the addition of the words that the money was due to the payee for cash advanced simply stated the origin of the indebtedness of the maker, and that the time was absolutely fixed. 11. Kelly v. Hemingway, 13 Ill. 604, An even more striking case was 56 Am. Dec. 474; Rice v. Rice, 43 that of Carnwright v. Gray, 127 App. Div. (N. Y.) 548, 60 N. Y. Supp. N. Y. 92, 27 N. E. 835, 24 Am. 97.

8. Sackett v. Palmer, 25 Barb. (N. Y.) 179.

9. Mortee v. Edwards, 20 La. Ann.

236.

10. See § 36, ante.

period. 12 And it has been held that a written engagement to pay a certain sum so many days after the defendant's marriage is not a negotiable promissory note, for possibly he may never marry.' And a written obligation for the payment of a sum of money when the estate of M. is settled up" is not negotiable or assignable, as there is no legal certainty that event will ever happen." It may then be stated as a general proposition that an instrument promising to pay a sum of money at a day uncertain, upon a contingency not inevitable, is not negotiable.'

15

k. Instrument payable on day certain, or on happening of event. -Where an instrument contains a promise to pay at a certain fixed date, or before such time if a specified event occurs, it is generally held to be negotiable. 16 In such a case the absolute promise to pay at a fixed time is not affected by the conditional promise to pay upon the happening of the contingency. The conditional promise not being performed, the absolute promise to pay at the expiration of the time specified remains in full force.17

1. Effect of provision for extension of time.-A provision contained in an instrument to the effect that the time of payment may be extended indefinitely as the parties may agree makes the time of payment depend upon a contingency, and, therefore, destroys the negotiability of the instrument.

12. Story on Promissory Notes, § 28. 13. Beardsley v. Baldwin, 2 Stra. (Eng.) 1151.

14. Husband v. Epling, 81 Ill. 172, 25 Am. Rep. 273.

15. Tradesmen's

16. Walker v. Woolen, 54 Ind. 164; Charlton v. Reed, 61 Iowa, 166, 16 N. W. 64, 47 Am. Rep. 808.

18

Pemberton v. Hoosier, 1 Kan. 108; Gardner v. Barger, 4 Heisk. (Tenn.) 668; Smith v. Ellis, 29 Me. 422.

17. Walker v. Woolen, 54 Ind. 164. 18. Agreement to extend time.-In the case of Glidden v. Henry, 104 Nat. Bank v. Ind. 278, 1 N. E. 369, the note Green, 57 Md. 602. In the case of under consideration provided, “and Specht v. Beindorf, 56 Neb. 553, 76 further expressly agree that the N. W. 1059, 42 L. R. A. 429, a prom- payee or his assigns may extend issory note containing a promise to the time of payment thereof from pay "if elected county commissioner," time to time indefinitely, as he or was held nonnegotiable. they see fit, and receive interest in advance or otherwise, from the maker or indorsers, for any extension or forbearance so made." The In the case of Stevens v. Blunt, 7 court said: "From an inspection of Mass. 240, it was held that a note the note it is impossible to tell when payable to S., or order, on a certain it may mature, because it is impossible day, or when he completes the build- to know what extension may have ing according to contract," is negotiable. To similar effect is Cota v. Buck, 7 Metc. (Mass.) 588, 41 Am. Dec. 464; Ernst v. Steckman, 74 Pa. St. 13, 15 Am. Rep. 542; Goodlow v. Taylor, 10 N. C. 458; Commercial Bank of Salina v. Crenshaw, 103 Ala. 497, 15 South. 741; Cesne v. Chidester, 85 Ill. 523;

66

been, or may be hereafter, agreed upon. No definite time is fixed, nor is the maturity of the note dependent upon an event that must inevitably happen. The condition is not that something may happen or be done that will mature the note before the time named, thus leaving that time as fixed and

$ 40. Instrument must be payable to order or bearer.

19

a. In general.—An instrument to be negotiable must be payable to order or bearer.1 The name of the person to whom the note is payable, or upon whom the bill is drawn, should be clearly expressed and made known upon the face of the instrument, because parol evidence is not admissible to show to whom it is payable; and in instruments designed for circulation, it is of the highest importance to know to whom its obligations apply, and from whom a title can be securely derived.20 Under the English law it is provided that a bill is payable to order or bearer which is expressed to be so payable, or is payable to a particular person, and does not contain words expressly or impliedly prohibiting transfer."1 Independent of statute in the several States in this country, it is well settled that a negotiable instrument must be payable to order or bearer, and that such instrument is not negotiable unless these words, or words of similar legal import, appear therein.22 The

certain, if the thing do not happen or be done; but the condition is that the time named may be displaced by another uncertain and indefinite time, as the parties may agree."

In the case of McClelland v. Norfolk Southern Co., 110 N. Y. 469, 18 N. E. 237, it was held that certain coupons which were cut from railroad bonds, containing a provision that the time of payment of principal and interest might be postponed by a vote of the majority of the holders of a series of bonds issued simultaneously with those from which the coupons were cut, were not negotiable instruments. See also Coffin v. Spencer, 39 Fed. (C. C.) 262; Armiston L. & T. Co. v. Stickney, 108 Ala. 146, 19 South. 63, 31 L. R. A. 234; Woodberry v. Roberts, 59 Iowa, 348, 13 N. W. 312, 44 Am. Rep. 685; Rosenthal v. Rambo (Ind. App.), 62 N. E. 637; Smith v. Van Blarcom, 45 Mich. 371, 8 N. W. 90; Second Nat. Bank v. Wheeler, 75 Mich. 546, 42 N. W. 963; Citizens' Nat. Bank v. Piollet, 126 Pa. St. 194, 17 Atl. 603, 12 Am. St. Rep. 860, 4 L. R. A. 190.

19. Neg. Inst. Law (N. Y.), § 20(4).

20. Story on Promissory Notes, § 35. 21. Byles on Bills (16th ed.), p. 96. Under the English law as it existed prior to the Bills of Exchange Act (§ 8), it was necessary that the bill

or note contain one or the other of the words "order" or 'bearer," in order to be negotiable. Smith v. Ken dall, 6 B. R. (Eng.) 123.

22. Words "order" or "bearer " or similar words must appear, see the following cases:

United States.- Sherman Bank v. Apperson, 4 Fed. 25.

Connecticut.- Bacus v. Danforth, 10 Conn. 297.

Delaware.- Fernon v. Farmer, Harr. 32; Hallis v. Vander Grift, ō Houst. 521.

Georgia.- Reed v. Murphy, 1 Ga. 236; Hamilton v. Grangers' L. & H. Ins. Co., 65 Ga. 750. (In this State, by sections 3675 and 3682 of the Code of 1895, an agreement containing a promise to pay money is negotiable by indorsement in the same manner as a promissory note or bill of exchange, and under these sections it has been held that a note not containing any words of negotiability was so far negotiable by indorsement of the payee in blank as to pass the title to a bona fide holder. National Bank v. Leonard, 71 Ga. 805, 18 South. 32.)

Indiana. Musselman V. McElhenny, 23 Ind. 4, 85 Am. Dec. 445. Maryland. — Yingling v. Kohlhass, 18 Md. 148.

Missouri.- Davis v. Holm, 34 Mo. App. 332.

New York.- Bruce v. Wescott, 3