§ 1138. Possible additions or omissions. Section 5. [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.19 But the negotiable character of an instrument otherwise negotiable is not affected by a provision which: (1) Authorizes the sale of collateral securities in case the instrument be not paid at maturity; or 20 (2) Authorizes a confession of judgment if the instrument be not paid at maturity; or (3) Waives the benefit of any law intended for the advantage or protection of the obligor; or (4) Gives the holder an election to require something to be done in lieu of payment of money. 21 But nothing in this section shall validate any provision or stipulation otherwise illegal.22 is inserted: "(4) At a fixed period after the date or sight, though payable before then on a contingency. An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect, except as herein pro vided." 19 Strickland v. National Salt Co., 79 N. J. Eq. 182, 81 Atl. 828 (Cf. National Salt Co. v. Ingraham, 143 Fed. 805, 74 C. C. A. 479); Bright v. Offield, 81 Wash. 442, 143 Pac. 159. 20 Provisions in collateral notes by which the maker engages to deposit additional collateral, have been held to destroy negotiability. Holliday State Bank v. Hoffman, 85 Kans. 71, 35 L. R. A. (N. S.) 390; Hibernia Bank v. Dresser, 132 La. Ann. 532, 61 So. 561; Empire Nat. Bank v. High Grade Oil Ref. Co., 260 Pa. 255, 103 Atl. 602. Contrary decisions are: Kobey v. Hoffman, 229 Fed. 486, 143 C. C. A. 554; Finley v. Smith, 165 Ky. 445, 177 S. W. 262, L. R. A. 1915 F. 777. See also Kennedy v. Brod erick, 216 Fed. 137, 132 C. C. A. 381; On the one hand it seems clear that there is an additional promise in such a note, but on the other hand it may be urged that the promise is subsidiary and in aid of the object of securing payment at maturity. 21 Pratt v. Higginson, 230 Mass. 256, 119 N. E. 661. 22 In the Illinois Act, the words "under this Act," are added at the end of the first sentence. The effect of this insertion is that the peculiar law previously in force in Illinois allowing negotiability to promises for the delivery of other things than money still remains in force after the enactment of the Negotiable Instruments Law. In the Illinois Act, also the words "if the instrument be not paid at maturity," are omitted from subsection (2). In the Kentucky Act subsection (3) is omitted. In the Wisconsin Act the words: "or authorize the waiver of exemptions from execution," are added at the end of the section. Section 6. [OMISSIONS; SEAL; PARTICU LAR MONEY.] The validity and negotiable character of an instrument are not effected by the fact that:— (1) It is not dated; or 23 (2) Does not specify the value given, or that any value has been given therefor; or (3) Does not specify the place where it is drawn or the place where it is payable; or (4) Bears a seal; or (5) Designates a particular kind of current money in which payment is to be made. 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.24 23 Bank of Houston v. Day, 145 Mo. App. 410, 122 S. W. 756; Church v. Stevens, 56 N. Y. Misc. 572, 107 N. Y. S. 310. 24 In the Illinois Act the following words are inserted at the beginning of subsection (5): "Is payable in current funds: or," and that Act also does not contain the final paragraph of the section. Prior to the passage of the Negotiable Instruments Law there was considerable litigation on the question whether an instrument payable in currency or in current funds was negotiable. Some courts held that currency or current funds meant the money or legal tender that was current, and therefore, that the instrument was negotiable. Bull v. Bank of Kasson, 123 U. S. 105, 31 L. Ed. 97, 8 Sup. Ct. 62, Hatch v. First Nat. Bank, 94 Me. 348, 47 Atl. 908; Keith v. Jones, 9 Johns. 120. Other courts held that currency or current funds meant, what was current as money (that is, used as such) whether, in fact, it was money or not. Huse v. Hamblin, 29 Iowa, 501. The former meaning is supported by the weight of authority, but this is probably due chiefly to the unfortunate practical consequences of a contrary holding, for the latter meaning seems the true sense of the words, and under that meaning if it is requisite that a negotiable instrument shall be payable in money, an instrument payable in currency or current funds is not negotiable. Wright v. Hart's Adm., 44 Pa. 454. It is probable that the Negotiable Instruments Law was meant to settle this controversy when it provided that an instrument is negotiable though it designates a particular kind of current money in which payment is to be made. But it cannot be said that those words do settle the controversy. Undoubtedly a note payable in a particular kind of current money, e. g.,.gold coin, is negotiable; Chrysler v. Renois, 43 N. Y. 209; but the words "current money" do not seem the equivalent of " 'currency or current funds," if the latter words are understood to mean what is used as money whether it is really money or not. The Supreme Court of Iowa, indeed, following earlier authorities, has held that a check payable in current funds is not payable in money and is therefore not negotiable. Dille v. White, 132 Ia. 327, 109 N. W. 909, § 1139. When payable on demand, to order, or to bearer. 25 Section 7.-(WHEN PAYABLE ON DEMAND.] An instrument is payable on demand (1) Where it is expressed to be payable on demand or at sight, or on presentation, or (2) In which no time for payment is expressed. Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person so issuing, accepting, or indorsing it, payable on demand. An instrument payable "on demand after date" is payable on demand. 26 Section 8.-[WHEN PAYABLE TO ORDER.] The instrument is payable to order where it is drawn payable to the order of a specified person or to him or his order. It may be drawn payable to the order of: (1) A payee who is not maker, drawer, or drawee; or (2) The drawer or maker; or (3) The drawee; or (4) Two or more payees jointly; or (5) One or some of several payees; or 27 (6) The holder of an office for the time being. Where the instrument is payable to order the payee must be named or otherwise indicated therein with reasonable certainty.2 28 10 L. R. A. (N. S.) 510. Contrary decisions under the statute are: Millikan v. Security Trust Co., (Ind. 1918), 118 N. E. 568; Merchants' Nat. Bank v. Santa Maria Sugar Co., 162 N. Y. App. D. 248, 147 N. Y. S. 498. The amendment in Illinois makes the matter clear and might well be adopted elsewhere. 25 By the common law a sightdraft was entitled to three days of grace, Daniel, Neg. Inst., § 617; a demand draft was not. The Negotiable Instruments Law by abolishing days of grace (section 85) destroys any distinction between demand paper and sight paper, and therefore classifies sight paper as a kind of demand paper. By amendment to the statute, however, in Massachusetts, New Hampshire and North Carolina, the sight draft with days of grace has been restored as a separate form of instrument. 26 O'Neil v. Magner, 81 Cal. 631, 22 Pac. 876; Fenno v. Gay, 146 Mass. 118, 15 N. E. 87; Schlesinger v. Schultz, 110 N. Y. App. D. 356, 96 N. Y. S. 383. But see Hardon v. Dixon, 77 N. Y. App. D. 241, 78 N. Y. S. 1061. Section 9. [WHEN PAYABLE TO BEARER.] The instrument is payable to bearer: (1) When it is expressed to be so payable; or (2) When it is payable to a person named therein or bearer; or (3) When it is payable to the order of a fictitious or nonexisting person, and such fact was known to the person making it so payable; or (4) When the name of the payee does not purport to be the name of any person; or (5) When the only or last indorsement is an indorsement in blank. 29 The English Statute does not contain the words in subsection three of the American section nine-"and such fact was known to the person making it so payable;" and under the English cases the drawer's ignorance of the fiction is immaterial.30 But if the drawer intends the instrument to be payable to a real person of the name stated in the instrument the further fact that the payee so named had no interest in the instrument will not make the instrument payable to bearer.31 In the United States prior to the enactment of the Negotiable Instruments Law, the decisions had held that knowledge by the drawer of the fiction was essential in order payable to the order of the administrator or executor of his estate." The final sentence of the section seems to qualify the general statement in Sec. 14, so far as concerns the filling in of a blank left for the name of the payee in an instrument payable to order. See Tower v. Stanley, 220 Mass. 429, 107 N. E. 1010. The English Bills of Exchange Act makes paper in legal effect payable to order, though the word order is not contained therein, unless words prohibiting transfer are contained in the instrument. This change of the common law was not adopted in the American Statute. 29 In the Illinois Act subsections (3) and (5) are as follows: "(3) When it is payable to the order of a person known by the drawer or maker to be fictitious or nonexistent, or of a living person not intended to have any interest in it." "(5) When, although originally payable to order. it is indorsed in blank by the payee or a subsequent indorsee." 30 Clutton v. Attenborough [1897] A. C. 90. 31 Vinden v. Hughes [1905] 1 K. B. 795; North & South Wales Bank . Macbeth, [1908] A. C. 137; Town, etc., Co. v. Provincial Bank, [1917] 2 Ir. Rep. 421. See also Vagliano ɛ. Bank of England, 23 Q. B. D. 243; Bank of England v. Vagliano, [1891] A. C. 107. to make the instrument payable to bearer, 32 and under the statute the same requirement is preserved. 33 Section 10. [TERMS WHEN SUFFICIENT.] The instrument need not follow the language of this act, but any terms are sufficient which clearly indicate an intention to conform to the requirements hereof. § 1140. Date of negotiable instrument. Section 11. [DATE, PRESUMPTION AS TO.] Where the instrument or an acceptance or any indorsement thereon is dated, such date is deemed prima facie to be the true date of the making, drawing, acceptance, or indorsement as the case may be. Section 12.-[ANTE-DATED AND POST-DATED.] The instrument is not invalid for the reason only that it is antedated or post-dated, provided this is not done for an illegal or fraudulent purpose. The person to whom an instrument so dated is delivered acquires the title thereto as of the date of delivery.3 32 Boles v. Harding, 201 Mass. 103, 87 N. E. 481; Jordan v. National Shawmut Bank, 201 Mass. 397, 87 N. E. 740, 22 L. R. A. (N. S.) 250; Shipman v. Bank of New York, 126 N. Y. 318, 27 N. E. 371, 12 L. R. A. 791, 22 Am. St. Rep. 821; Armstrong v. National Bank, 46 Ohio St. 512, 22 N. E. 866, 6 L. R. A. 625, 15 Am. St. Rep. 655; Chism v. Bank, 96 Tenn. 641, 36 S. W. 387, 32 L. R. A. 778. 54 Am. St. Rep. 863. 33 Los Angeles Inv. Co. v. Home Sav. Bank (Cal.), 182 Pac. 293; Seaboard Nat. Bank v. Bank of America, 193 N. Y. 26, 85 N. E. 829, 22 L. R. A. (N. S.) 499; Egner v. Corn Exchange Nat. Bank, 42 N. Y. Misc. 552, 86 N. Y. S. 107; Jones v. People's Bank Co., 95 Ohio, 253, 116 N. E. 34; Weishaas v. Pendleton, 73 Oreg. 190, 144 Pac. 401. As to what is a fictitious payee, see United States v. Chase Nat. Bank, 250 Fed. 105, 162 C. C. A. 277; Sockland v. Storch, 123 Ark. 253, 185 S. W. 262, Ann. Cass. 1918 A. 668, 250; Bartlett v. First Nat. Bank, 247 Ill. 490, 93 N. E. 337; Jordan v. National Shawmut Bank, 201 Mass. 397, 87 N. E. 740, 22 L. R. A. (N. S.) Trust Company of Am. v. Hamilton Bank, 127 N. Y. App. D. 515, 112 N. Y. S. 84; Hartford v. Greenwich Bank, 157 N. Y. App. D. 448, 142 N. Y. S. 387, 215 N. Y. 726, 109 N. E. 1077; Snyder v. Corn Exchange Nat. Bank, 221 Pa. 599, 78 Atl. 876, 128 Am. St. Rep. 780; Litchfield Shuttle Co. v. Cumberland Valley Nat. Bank, 134 Tenn. 379, 183 S. W. 1006. 34 A post-dated instrument may be negotiated before its date, and one who so takes it for value and in good faith is not thereby put on inquiry and is a holder in due course. Triphonoff v. Sweeney, 65 Oreg. 299, 130 Pac. 979; Albert v. Hoffman, 64 N. Y. Misc. 87, 117 N. Y. S. 1043. See also Royal |