tracts of land is negotiable. First Nat. Bank v. Michael, 96 N. C. 53. The most frequent instances of this sort are notes given in payment of the purchase price of goods and chattels. Thus, in Chicago Railway Equipment Co. v. Merchants' Nat. Bank, 136 U. S. 268, it was held that the negotiable character of a promissory note was not affected by a provision that it was given with others in payment for certain cars, the title to which should remain in the payee until all the notes of the series should be paid. The court said: "The transaction is, in legal effect, what it would have been if the maker, who purchased the cars, had given a mortgage back to the payee, securing the notes on the property until they were all fully paid. The agreement, by which the vendor retains the title and by which the notes are secured on the cars, is collateral to the notes, and does not affect their negotiability. It does not qualify the promise to pay at the time fixed, any more than would be done by an agreement of the same kind, embodied in a separate instrument, in the form of a mortgage." So, in Mott v. Havana Nat. Bank, 22 Hun, 354, a like ruling was made with respect to a provision in a note that it was to be "in part payment for a portable engine, which engine shall be and remain the property of the owner of this note until the amount hereby secured is paid." So, where there was a similar recital as to the title of a piano, for the price of which the note was given. Third Nat. Bank v. Bowman, 50 App. Div. (N. Y.) 66. And so, where there was a recital in the note that it was "given in consideration of a certain patent right." Hereth v. Meyer, 33 Ind. 511. But see section 330.

(c) An order on a savings bank, "Pay C, or order, three hundred dollars, or what may be due on my deposit book No. E, page 632," is payable out of a particular fund, and therefore not negotiable under the statute. National Savings Bank v. Cable, 73 Conn. 568. See also, Lowery v. Steward, 25 N. Y. 239; Munger v. Shannon, 61 N. Y. 251; Parker v. City of Syracuse, 31 N. Y. 376; Morton v. Naylor, 1 Hill, 583; Gawken v. De Loraine, 3 Wils. 207. In the case first cited the order was: "Please pay to the order of Archibald H. Lowery the sum of $500 on account of twenty-four bales of cotton shipped to you as per bill of lading, by steamer Colorado, inclosed to you in letter." It was held that this was not a bill of exchange, requiring acceptance to bind the drawers, but a specific draft or order upon a particular fund. The language of the statute payable “out of a particular fund" is the equiva

lent of the expression found in many of the cases drawn on the general credit of the drawer." Hibbs v. Brown, 190 N. Y. 167, 175. A clause in the trust deed securing payment of an issue of bonds provided that, "No present or future shareholder, officer, manager or trustee of the Express Company shall be personally liable as partner or otherwise in respect of this bond or the coupons appertaining thereto, but the same shall be payable solely out of the assets assigned and transferred to the said Trust Company or out of other assets of the Express Company:"—Held, that while a joint stock association differs from a corporation and is like a partnership in respect to the individual liability of its members, the association issuing the bonds must be regarded as a joint, quasi corporate entity; that the bonds having been issued in its name, upon its general credit and binding all its assets, complied with the requirements for a negotiable instrument, even though the practically unimportant individual liability of members was excluded; that such exclusion did not constitute the general assets, out of which the bonds were payable, a particular fund within the meaning of this section. (Id.)

§ 23. Determinable future time; what constitutes.-An instrument is payable at a determinable future time, within the meaning of this act, which is expressed to be payable: I. At a fixed period after date or sight; (a) or

2. On or before a fixed or determinable future time specified therein; (b) or

3. On or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time of happening be uncertain (c).

An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect (d).

(a) A draft was drawn as follows: "Mr. Wm. Tebo. Will please pay to R. J. Torpey or order two hundred and fifty dollars and charge to my account. Due Oct. 1. John Ryan:"-Held, that the words "due Oct. 1," were to be construed as payable October 1st, and hence that the instrument was negotiable. pey v. Tebo, 184 Mass. 307.

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(b) In such a case the legal rights of a holder are clear and certain; the note is due at a time fixed, and it is not due before. The option of the maker, if exercised, would be a payment in advance of the legal liability to pay, and nothing more. See Mattison v. Marks, 31 Mich. 421; Smith v. Ellis, 29 Me. 422; Buchanan v. Wren (Tex.) 30 S. W. Rep. 1077; Riker v. Sprague Mfg. Co., 14 R. I. 402; Kiskadden v. Allen, 7 Colorado 206; Jordan v. Tate, 19 Ohio St. 586; Albertson v. Laughlin, 173 Pa. St. 525. Thus, where the note was made payable twelve months after date, or before, if the money was made out of the sale of a machine, it was held to be negotiable. Ernst v. Steckman, 74 Pa. St. 13. So, in Ackley School District v. Hall, 113 U. S. 135, 140, it was held that municipal bonds, issued under a statute providing that they should be payable at the pleasure of the district at any time before due, were negotiable. The court said: "By their terms, they were payable at a time which must certainly arrive; the holder could not exact payment before the day fixed in the bonds; the debtor incurred no legal liability for nonpayment until that day passed." In the Wisconsin act, the words 66 though payable before then on a contingency" are added. For a case applying the Wisconsin statute, see Thorp v. Mindeman, 123 Wis. 149.

(c) Thus, a note payable a certain number of days after the death of the maker, or upon demand after the death of the maker, is a good promissory note, because the event is sure to happen. Carnwright v. Gray, 127 N. Y. 92; Hegeman v. Moon, 131 N. Y. 462. See also Shaw v. Camp, 160 Ill. 425; Martin v. Stone, 67 N. H. 367; Price v. Jones, 105 Ind. 544; Bristol v. Warner, 19 Conn. 74. But an instrument payable when, or in so many days after, "A shall become of age," would not be negotiable, because it is uncertain whether A will live so long. Goss v. Nelson, 1 Burr, 226; Rice v. Rice, 43 App. Div. (N. Y.) 458. So, a note payable when A shall marry," Peason v. Garrett, 4 Mod. 242; or when a certain ship shall arrive. Coolidge v. Ruggles, 15 Mass. 387; Grant v. Wood, 12 Gray, 220.

(d) Duffield v. Johnston, 95 N. Y. 369; First National Bank v. Alton, 60 Conn. 402. Thus, where an instrument is made payable when a certain person shall become of age, the fact that he actually attains his majority does not make the instrument negotiable. Goss v. Nelson, 1 Burr, 226. But a stipulation on the face of the paper that the sureties consent to an extension of time for pay

ment without notice does not destroy the negotiable quality of the instrument. Farmer v. Bank of Graettinger, 130 Iowa 469. Contra, Union Stockyards Nat. Bank v. Bolan (Idaho) 93 Pac. Rep. 509.

§ 24. Additional provisions not affecting negotiability.— An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. But the negotiable character of an instrument otherwise negotiable is not affected by a provision which:

I. Authorizes the sale of collateral securities in case the instrument be not paid at maturity (a); or

2. Authorizes a confession of judgment if the instrument be not paid at maturity (b); or

3. Waives the benefit of any law intended for the advantage or protection of the obligor (c); or

4. Gives the holder an election to require something to be done in lieu of payment of money (d).

But nothing in this section shall validate any provision or stipulation otherwise illegal (e).

(a) Collateral notes are often non-negotiable because of some provision therein in regard to the time of payment, or because of provisions requiring something to be done in addition to the payment of money. But a statement that collateral security has been deposited for the performance of the promise contained in the note is a recital only which does not affect its negotiability. Wise v. Charlton, 4 A. & E. 486; Fancourt v. Thorne, 9 Q. B. 312. And a provision merely authorizing the sale of the collateral, if the note be dishonored, does not have this effect. Perry v. Bigelow, 128 Mass. 129; Towne v. Rice, 122 Mass. 67; Biegler v. Merchants' Loan & Trust Co., 62 Ill. App. 560; Arnold v. Rock River Valley Union R. R. Co., 5 Duer, 207. A statement, however, that the note is "given as collateral security with agreement" destroys its negotiable character. Costello v. Crowell, 127 Mass. 293.

(b) This provision was inserted in the act to meet the requirements in some of the States where judgment notes are in use. Such notes are not known in New York. In Pennsylvania it was held that the warrant of attorney rendered the note non-negotiable.

Overton v. Tyler, 3 Pa. St. 346; Sweeney v. Thickstum, 77 Pa. St. 131. A note which authorizes a confession of judgment at any time after its date, whether due or not, is not negotiable under the statute; for as the time of payment will thus depend upon the whim or caprice of the holder, it is absolutely uncertain. Wisconsin Yearly Meeting of Freewill Baptists v. Barber, 115 Wis. 289.

(c) In some of the States it is a common practice to insert in promissory notes a waiver of the benefits of homestead and exemption laws, and this provision of the act is designed to meet such cases. See Zimmerman v. Anderson, 67 Pa. St. 421; Zimmerman v. Rote, 75 Pa. St. 188.

(d) An illustration of this case is the right of the holder to elect to take stock of a corporation in lieu of payment in money. Hodges v. Shuler, 22 N. Y. 114. As the obligation of the maker is to pay in money, and as the payment in stock is not optional with him, the note is not within the rule that a negotiable instrument must not be payable in the alternative.-Id.

(e) The object of this provision is to prevent any inference of an intent to validate any agreement or stipulation mentioned in the section, where, by any statute or settled policy of the State, the same would be illegal. In the Wisconsin Act the following words are added: or authorize the waiver of exemptions from execu

tion."

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§ 25. Omissions; seal; particular money. The validity and negotiable character of an instrument are not affected by the fact that:

I. It is not dated (a); or

2. Does not specify the value given, or that any value has been given therefor (b); or

3. Does not specify the place where it is drawn or the place where it is payable (c); or

4. Bears a seal (d); or

5. Designates a particular kind of current money in which payment is to be made (e).

But nothing in this section shall alter or repeal any statute requiring in certain cases the nature of the consideration to be stated in the instrument (f).