Title of

holder of cheque crossed

specially.

negligence. A holder who has a good title can still transfer it, and the transferee is entitled to receive payment, but where the title of the holder is defective a subsequent holder for value is deprived of the protection usually afforded to a bona fide holder for value without notice. It has been held that the second clause of s. 12 is not a mere proviso to the first clause, but a substantive enactment protecting the collecting banker in the case of all crossed cheques, whether they bear on their face the words "not negotiable" or not. This is a beneficial, but decidedly forced construction.

1 Mathiessen v. London and County Bank (1879), 5 C. P. D. 7.

CHAPTER X.

PROVISIONS PECULIAR TO PROMISSORY NOTES.

[EXPLANATORY HEAD-NOTE.-The term "bill" in contradiction to "bill
of exchange," as used in the articles of this digest, includes mutatis
mutandis promissory note as well as bill of exchange, the maker of a
promissory note corresponding with the acceptor of a bill of exchange.
See Introd., p. iv., and head-note to Chapter I. In this chapter
are collected the provisions which apply exclusively to promissory
notes.]

fined.

Art. 275. A promissory note is an unconditional Note depromise in writing, made by one person to another, signed by the maker, engaging to pay, on demand or at a determinable future time, a sum certain in money to, or to the order of, a specified person or to bearer.1

NOTE.-See a promissory note compared with a bill of exchange by Lord Mansfield, and Parke, B., and cf. Art. 286 n. some points of difference between a bank note and an ordinary note referred to by Bramwell, B. Foreign Law.-The French law as to notes (billets à ordre), is contained in French Code de Commerce, Arts. 187, 188. Although the Code is silent on the point, it seems that notes payable to bearer (billets au porteur) are to some extent recognised, see Nouguier, §§ 1565-1578; German Exchange Law, Arts. 96-100, deals with notes.

1 Colehan v. Cooke (1742), Willes, 393 at 396, 397; Cf. Ferris v. Bona (1821), 4 B. & Ald. 679.

2 Heylyn v. Adamson (1758), 2 Burr. at 676.

3 Gibb v. Mather (1832), 2 Cr. & J. at 262-263, Ex. Ch.

4 Litchfield Union v. Greene (1857), 1 H. & N. at 889.

Necessary parties.

Form and Interpretation.

Art. 276. There must be two parties to a promissory note in its origin, and they must be different persons, namely

(1.) The person who makes the promise, called the maker.

(2.) The person in whose favour the promise is made, called the payee. Cf. Art. 2.

Explanation.-A writing in the form of a note payable to maker's order is not a note, but by indorsement it becomes one.1

ILLUSTRATIONS.

1. B. makes a note payable to his own order, and indorses it in blank. This is a valid note payable to bearer.

2. B. makes a note payable to his own order, and indorses it to C. This is a valid note payable to C. or order.3

3. B., C. and X. make a joint and several note payable to C. and X. or order. This is a valid note. C. and X. may sue B. on his several liability.*

4. B. & Co. make a note payable to C. & Co. or order. X. is a partner in both firms. C. & Co. cannot sue B. & Co. on this note. But if C. & Co. indorse the note, the indorsee could sue.

Delivery Art. 277. A promissory note is inchoate and necessary. incomplete until delivery thereof be made to the

Note may

be in any form of

words.

payee.

any

Art. 278. A promissory note may be in form of words which comply with the requisitions of

1 Hooper v. Williams (1848), 2 Exch. 13.

2 Id.; Masters v. Baretto (1849), 8 C. B. 433.

3 Gay v. Lander (1848), 17 L. J. C. P. 286.

4 Beecham v. Smith (1858), E. B. & E. 442.

Lindley, 3rd ed., 219; Cf. Neale v. Turton (1827), 4 Bing. 149.

Chapman v. Cottrell (1865), 3 H. & C. 857; Cf. Arts. 53-55, as to delivery.

be in any

Art. 275,' and from which the intention to make a Note may note appears.2

ILLUSTRATIONS.

1. An I. O. U. containing a promise to pay may constitute a note.3

The following are invalid as notes:

2. "Borrowed of C. 100l. to account for on behalf of the X. Club at months' notice, if required." (Signed) T. B.*

3. “I. O. U. 201. for value received." (Signed) W. B.3

4. "Nine years after date I promise to pay C. 1007., provided X. shall not return to England, or his death be certified in the mean time." (Signed) W. B.

NOTE. For further illustrations, see Arts. 2, 8, 9, 10, 12, 13, 14, 19, 20, 23, 58. The promise of the maker in a note corresponds with the order to the drawee in a bill of exchange accepted generally. It may be regarded as the same contract stated conversely, and the same considerations apply to both, see Art. 10. An instrument invalid as a negotiable promissory note may of course be effectual as an agreement, or an I. O. U. Subjoined is an ordinary form of note.

form of

words.

£100.

1, Duke Street, London,
January 1, 1870.

On demand I promise to pay to James Charles, or order, one hundred pounds, for value received.

John Brown.

several

Art. 279. There may be two or more makers to Joint and a promissory note, and they may be liable thereon note. jointly, or jointly and severally, according to its tenour.8

See English and American

1 Hooper v. Williams (1848), 2 Exch. at 20. cases reviewed in Currier v. Lockwood (1873), 16 Amer. R. 40. Sibtree v. Tripp (1846), 15 M. & W. at 29;

19 L. T. N. S. 640.

3 Brooks v. Elkins (1836), 2 M. & W. 74. 4 White v. North (1849), 3 Exch. 689.

Gould v. Coombes (1845), 1 C. B. 543

6 Morgan v. Jones (1830), 1 C. & J. 162.

7 Cf. White v. North (1849), 3 Exch. 689.

8 Cf. Ex parte Honey (1871), 7 L. R. Ch. 178.

Cf. Jackson v. Slipper (1869),

Joint and several note.

Note containing

ILLUSTRATIONS.

1. A note in the form "I promise," signed by several persons who are not partners, is their joint and several note.'

2. A note in the form "We promise," signed by several persons, is their joint note only.2

3. B., X. and Y. are partners. B. makes a note in the form “I promise," signing "for X. and Y." T. B. This is the joint note of the firm, and not a several note by B.3

Explanation 1.--A partner as such cannot bind his co-partners severally, but by a joint and several note he may bind the firm jointly and himself severally.5

4

Explanation 2.-A maker cannot be added to a joint and several note after it has been issued.

NOTE. See further Arts. 234 and 245. A bill of exchange differs from a note in this. If there be two or more acceptors they can only be liable jointly, not jointly and severally.7

Art. 280. A promissory note may contain a pledge of pledge of collateral security with authority to sell or dispose thereof.s

security.

Note in alternative.

In

NOTE.-Would the right to the security pass with the instrument? The question has been touched on but not decided.' France the security follows the instrument, Nouguier, § 715. The Belgian Commercial Code, § 26, expressly enacts the same as to bills.

Art. 281. A promissory note may (perhaps) give the holder the option between the payment of the

1 Monson v. Drakeley (1873), 16 Amer. R. 74; Cf. Ridd v. Moggridge (1857), 2 H. & N. 568, dub. Pollock, C. B.

2 Byles, 12th ed. p. 7; Parsons, v. 1,

p. 247.

3 Ex parte Buckley (1845), 14 M. & W. 469.

4 Macle v. Sutherland (1854), 3 E. & B. 1.

5 Penkivell v. Connell (1850), 5 Exch. 381.

6 Gardner v. Walsh (1855), 5 E. & B. 83; see Art. 248.

7 Jackson v. Hudson (1810), 2 Camp. 447.

8 Wise v. Charlton (1836), 4 A. & E. 786; Cf. Towne v. Rice (1877), 122. Massachus. R. 67.

9 Storm v. Stirling (1854), 3 E. & B. 832.