inland bills;" in Iowa, grace is allowed except on bills payable on demand;" in Kansas, grace is allowed on negotiable bonds, notes, and bills of exchange, but not on sight drafts;" in Kentucky, grace is allowed on all instruments negotiable by the law merchant; in Louisiana, grace is allowed on all negotiable bills and notes, except upon bills at sight and drafts or orders for money on demand;"° in Maine, grace is allowed only on drafts and bills payable at sight;" in Michigan, grace is allowed on all bills of exchange payable at sight, or at a future day certain, and on all negotiable promissory notes, orders, and drafts payable at a future day certain, within that state, in which there is not an express stipulation to the contrary, except that there shall be no grace on any bill, note, or draft payable on demand;" in Minnesota, grace is allowed on bills payable at sight or on time, and negotiable notes, orders, and drafts payable on time, and containing no provision to the contrary, but not on demand notes;" in Mississippi, grace is allowed on bills and notes;" in Missouri, grace is allowed, except on bills payable at sight or on demand;" in Nebraska, grace is allowed, except on instruments payable on demand; in Nevada, grace is allowed, except on sight bills and drafts;"" in New Mexico (Territory), grace is not allowed on bills payable at sight or on demand or at a future day, but is allowed on promissory notes;" in South Carolina and South Dakota, all bills are entitled to grace;"" in Texas, grace is allowed on all negotiable bills and notes," except demand notes;" in Vermont, grace is allowed on bills and notes, except those payable on demand or at sight, or in any way but in money; in Wyoming, grace is allowed on all negotiable instruments. 86 In Alaska (Territory), grace is allowed on all bills of exchange, promissory notes, orders, and drafts, payable at a future day certain within the district, in which there is not an express stipulation to the contrary, in like manner as it is allowed by the custom of merchants on foreign bills of exchange payable at the expiration of a certain period after date or after sight; but no grace is allowed on any instrument payable at sight or on demand;" in the Indian Territory, grace is allowed on bills of exchange, foreign and inland, and on promissory notes, according to the rules of the law merchant."" 92 Carter's Ann. (Alaska) Codes (1900), Secs. 193, 194, p. 392. 93 Ind. Ter. Stat. (1899), Sec. 454. THE LAW OF COMMERCIAL PAPER 1. (PART 4) CHECKS Of all the commercial contracts, and particularly of the three most common and convenient kinds of negotiable instruments, bills, notes, and checks, the latter are in most general use. They are designed to facilitate banking operations by supplying a convenient vehicle for the transmission of funds between banks and bankers and their customers, called depositors, and to transmit funds from the banks or bankers to those who may be designated by the depositors, in their checks, as the payees or holders thereof, and by this sort of draft are enabled to demand and receive immediately the amount called for. 991 A check, as defined in this title, is "a draft or order upon a bank or banking house for the payment of a certain sum of money, absolutely and on demand, to a certain person therein named, or to him or his order, or to bearer.' We have included in our definition all that is necessary to fully describe a check. To say that it is an order “purporting to be drawn upon a deposit of funds," or that "it is upon its face a draft upon a deposit," as some authorities contend, is surplusage;' for the statement that it is an order "on a bank or banking house" implies that it is drawn upon a deposit. So, to say that it is "payable instantly on demand," meaning by "instantly" that there is no allowance for grace, is misleading and unnecessary. It is quite expressive to say that it is for the payment of a certain 1 See subtitles General Remarks, Defini tions, supra. 21 Dan. Neg. Inst., Secs. 1,566, 1,569. 370 Pa. 476 (1872); 1 Dan. Neg. Inst., Sec. 1,572. 4 118 Ill. 484 (1886). For notice of copyright, see page immediately following the title page sum of money, "absolutely and on demand," especially in jurisdictions where days of grace are no longer allowable. By some authorities, a check is called an inland bill of exchange. In the English Bills of Exchange Act, it is defined as "a bill of exchange drawn on a banker payable on demand," a definition which is followed in negotiable instruments laws, wherever enacted in the United States. While a check has some of the incidents of a bill and belongs to the same class of commercial paper, the accepted conclusion now is, that to call a check an inland bill is inaccurate. Many of the rules of the law merchant are applicable to both. Each is for a specific sum of money, and in each there is a drawer, a drawee, and a payee. The chief points of difference are that a check is always drawn on a bank or banker; that it is payable on demand; no days of grace are allowed; the drawer is not discharged by the neglect of the holder in presentment for payment (as in a bill), unless he can show that he has sustained some injury by the default. A check is not due until payment is demanded, and the statute of limitations runs only from that time." It is by its face the appropriation of so much money of the drawer in the hands of the drawee to the payment of an admitted liability of the drawer; besides, it is very usual for checks to be drawn in one state upon a banking house in another.1 In determining the character of a check, the fact that the drawer resides in one state and the drawee in another may be disregarded. ESSENTIAL PROPERTIES 2. Form. The essential properties of a check are, that it is drawn against a deposit of funds in a bank or banking house on which it is drawn," that it is for a certain amount, = 5 Edw. Bills 396. 6 Eng. B. of E. Act, Sec. 73. 734 Md. 579 (1871); 10 Wall. (U. S.) 647 (1870). 8 18 Wall. (U. S.) 620 (1873); 2 Story (U. S.) 502, 512 (1843); 70 Pa. 474 (1872). 9 118 Ill. 484 (1886). 10 155 Mass. 374 (1892); 4 R. I. 30 (1856). 12 Pars. Notes & B., Vol. 2, pp. 58, 59. |