128 [8 C. J.]

BILLS AND NOTES

debtedness of the maker to the payee, is nonnegotiable because it is an order to do an act in addition to the payment of money.37 But some cases hold that, where the additional promise is merely to aid in the fulfillment of the principal obligation, it does not affect the negotiability of the note.

38

Any stipulation for the sale of collateral, before the maturity of the note, takes away the necessary certainty of payment and destroys negotiability.39 It has been held, however, that a provision in a note respecting a pledge of collateral, by the terms of which the pledgee may anticipate maturity, sell collaterals, and leave an uncertain amount unpaid, does not ren40 and that this is der the instrument nonnegotiable,* the rule under the Negotiable Instruments Law.41 [§ 222] 3. Provision Authorizing Confession of Judgment. A warrant to confess judgment does not destroy the negotiability of the note.42 Such a note

V.

37. Hibernia Bank, etc., Co. Dresser, 132 La. 532, 61 S 561. Bank V. CrenCommercial 38. shaw, 103 Ala. 497, 502, 15 S 741 (where the court said: "In this promissory note is embodied, however, a is not essential stipulation, which either to its efficacy as a promise to pay or to its negotiability, to the effect that the promissor will deliver all cotton produced or controlled by him to the payee as rapidly as the same can be prepared for market, to be sold by the latter as the agent and factor of the former on the usual factor's commission, the net proceeds of such sales to be applied by the agent or factor, of course, to the And the quespayment of the note. tion recurs: Does this stipulation destroy the negotiability of the note, which without it is confessedly commercial paper in the hands of the bank, in the sense of not being affected by any equities that might obtain between the original parties And the answer to this inthereto? quiry depends upon whether the additional stipulation introduces any element of uncertainty in the sum to be paid, or the time of payment, or the place at which payment is to be Very clearly the absolute made. promise to pay the definite sum of one hundred and fifty dollars was in no wise affected by the superadded to the delivery and agreement as sale of cotton and application of the It is most manifest that proceeds. was to be paid this specific sum was delivered whether any cotton and sold or not"); Farmer v. Malvern First Nat. Bank, 89 Ark. 132, 115 SW 1141, 131 AmSR 79 (holding that a recital in a note of the existence of a mortgage as a security, and promising to have the property insured as an additional security does not affect the negotiability, since in nowise impairing the obligation to pay the specified amount in money and not affecting the principal obligation except to aid in its fulfilment).

45

De

is commonly called a "judgment note."' 43
cisions to the contrary 44 in states where the Nego-
tiable Instruments Law is now in force are abro-
gated thereby, since it expressly provides that the
negotiable character of an instrument otherwise
negotiable is not affected by a provision which au-
thorizes a confession of judgment, if the instrument
However, this statutory
is not paid at maturity.*
It
provision does not apply to stipulations for the
confession of judgment "prior" to maturity.46
follows that it does not apply to a note which au-
thorizes a confession judgment "at any term.'' 47
[§ 223] 4. Provision Waiving Benefit of Laws.
Independent of statute, it is held that a note is ne-
gotiable notwithstanding it contains a waiver of re-
is
lief from appraisement, stay, exemption, or home-
stead laws.48 Apparently it is this rule which
intended to be reiterated by the Negotiable Instru-
(Osborn v. Hawley, 19 Oh. 130) (2)
to con-
unless expressly conferred
fess a judgment in favor of "the le-
gal holder" or "holder" and is invali-
v. Merchants' Nat. Bank, 2 Oh, Cir.
dated by a transfer of the note (Ream
43. See Judgments [23 Cyc 699-
Ct. 43, 1 Oh. Cir. Dec. 351).
44. Richards v. Barlow, 140 Mass.
727].
ninety
note being payable in
218, 6 NE 68 ("at any time hereafter." |
NW
Mich. 191, 48
the
days); Conrad Seipp Brewing Co. v.
Marlow, 71 Mo. 618 (with attorney's
McKittrick, 86
1086; Carthage First Nat. Bank
fees); Overton v. Tyler, 3 Pa. 346,
45 AmD 645 [foll Sweeney v. Thick-
stun, 77 Pa. 131]; Haney v. Wilson,
37 Pa. Co. 180; Weaver v. Paul, 4
305; Draper
Dauph. Co. (Pa.)
Sharp, 1 Pittsf. (Pa.) 478. But see
WklyNC (Pa.)
McIntyre v. Steel,
494 (where it was held that Overton
v. Tyler, supra, had been overruled in
principle by Zimmerman v. Ander-
son, 67 Pa. 421, 5 AmR 447).

V.

ise to do an act that will better se-
cure the promise to pay the money
stipulated at the time fixed in the
note. If this condition or promise
would disturb the negotiability of
commercial paper the effect would
necessarily be to lessen the useful-
ness of collateral as security, be-
cause holders of paper would not be
disposed to accept collateral, much
of which has a fluctuating value, if
they were denied the right to insist
that its value should be maintained
in an amount sufficient to serve the
purpose for which it was accepted."
Finley v. Smith, 165 Ky. 445, 453,
39. U. S-Lincoln Nat. Bank v.
177 SW 262, LRA1915F 777.
Perry, 66 Fed. 887, 14 CCA 273.
D. C.-Commercial Nat. Bank
16 App.
Brewing Co.,
Nat. Bank
186 [foll Commercial
Consumers'
v. Consumers' Brewing Co., 17 App.
100].
Iowa.-Smith v. Marland, 59 Iowa
645, 13 NW 852.
Pa.-Benny v. Dunn, 2 LackLegN
Bank V.
Nat.
Wis.-Continental
135, 26 PittsbLegJNS 382.
But see Mumford v. Tolman, 54
Wells, 73 Wis. 332, 41 NW 409.
addi-
require
Ill. A. 471 [aff 157 Ill. 258, 41 NE
617].
au-
[a] Authority to
provision
collateral.-A
third party, not other-
tional
thorizing a
wise connected with the transaction,
to demand additions to the collat-
eral or the payment of money on ac-
count, whenever in its opinion the
collateral shall have depreciated in
value, and to sell the collateral in
case of failure to comply with the
tiabe.
demand, renders the note nonnego-
Commercial Nat. Bank v. Con-
sumers' Brewing Co., 17 App. (D. C.)
100.

was

40. Kennedy v. Broderick, 216 Fed.
472
137, 132 CCA 381, LRA1915B
(where there was a provision at the
left of the signature that the collat-
of a designated market
eral
value, that if the collateral depreci-
ated the payee might demand addi-
tional security or mature the note at
once, and that any assignment of the
note should carry all rights to the
collateral, and that the payee or as-
signee might sell the collateral at
public or private sale).

V.

V.

[a] In New York a judgment note with warrant of attorney to confess judgment generally at any time is not Robinson v. Kline, negotiable. Pa. Dist. 839.

21

45. See statutory provisions. [a] In Illinois the words "if the instrument be not paid at maturity" are omitted.

46. Milton Nat. Bank v. Beaver, 25 Pa. Super. 494; Hipple v. Stoner, 14 Pa. Dist. 631; Neill v. Dawson, 11 v. Russell, 124 Tenn. 618, 139 SW Pa. Dist. 633; Elgin First Nat. Bank consin Yearly Meeting v. Babler, 115 See also Rich734, AnnCas1913A 203 and note; WisWis. 289, 91 NW 678. ards v. Barlow, 140 Mass. 218, 6 NE 68.

47. Milton Nat. Bank v. Beaver, 25 Pa. Super. 494; Yankolovitz v. Wernick, 20 Pa. Dist. 223.

48. U. S.-Hughitt v. Johnson, 28 Fed. 865.

Ala.-Lineville First Nat. Bank v. Dumas v. People's Bank, 146 Ala. Alexander, 161 Ala. 580, 50 S 45; 226, 40 S 964; Montgomery First Nat. Bank v. Slaughter, 98 Ala. 602, 14 S City Nat. Bank, 7 Ala. A. 195, 69 S 545, 39 AmSR 88; Bledsoe v. Selma 942.

41. Kennedy v. Broderick, 216 Fed.
42. Iowa.-Tolman v. Janson, 106
137, 132 CCA 381, LRA1915B 472.
Iowa 455, 76 NW 732 (provision ille-2
gal).

Cal.-Navajo County Bank v. Dolson, 163 Cal. 485, 126 P 153, 41 LRA NS 787 (statute).

"It is quite usual to pledge collat-
eral as security for the payment of a
negotiable note, and we do not think
that any narrow construction of the
law should be adopted that would
have the effect of impairing the use
of security or that
of this kind
would deny to the holder the right to
insist that if the value of the collat-
eral deposited should become im-
paired, the maker must strengthen it
or else precipitate the maturity of
the
This condition in
the paper.
note is merely supplementary to the
fixed and controlling promises and is
really nothing more than additional
security for the payment of the in-
It is not, strictly speak-
strument.
ing, 'an order or promise to do an act
in addition to the payment of mon-
ey,' but is rather an order or prom-
For later cases, developments and changes in the law see cumulative Annotations, same title, page and note number.

Kan.-Gilmore v. Hirst, 56 Kan. 626, 44 P 603.

La. Fort v. Delee, 22 La. Ann. 180
(power to issue execution in case of
nonpayment).

Nebr.-Kemp v. Klaus, 8 Nebr. 24.
Oh.-Cushman v. Welsh, 19 Oh. St.

536.

[a] The negotiability does not, however, extend to the warrant (1)

Kan.-Lyon v. Martin, 31 Kan. 411, V. Anderson, 67 Pa.-Zimmerman P 790. Pa. 421, 422, 5 AmR 447 (where the court said: "But it is urged that the words 'waiving the right of appeal, stay and exemption laws,' destroy its In what way? They and of all valuation, appraisements, negotiability. do not contain any condition or contingency, but after the note falls due the maker is collection by facilitate the and is unpaid, and sued,

ments Law in so far as it expressly provides that the negotiable character of an instrument, otherwise negotiable, is not affected by a provision which waives "the benefit of any law intended for the advantage or protection of the obligor." 49

So a provision whereby the makers and the indorsers waive protest, demand and notice of protest, and nonpayment, in case the instrument is not paid at maturity, does not affect the negotiability of the instrument.50

Goods Sold. Although there is some authority to the contrary,51 it is generally held that a provision that title to the property for the purchase of which the note was given shall remain in the seller until paid for does not destroy the negotiability of the note,52 provided the time of payment is not rendered uncertain by additional provisions as to the right to take possession.53 However, in some states, a distinction is drawn between a conditional sale, where the title never passed to the maker, and a completed sale with a reservation of title in the or of its negotiability." Davis v. in the vendor, the reason for the rule Butler, (Man.) 7 WestLR 85, 86. is all the stronger. Fleming v. Sherwood, 24 N. D. 144, 139 NW 101, 43 LRANS 945 (where the word "ownership" was construed as including both title and right of possession). [c] In Canada (1) a provision in a purchase-price note that title to the property shall not pass until the note is paid, and that, if it is not paid at maturity, the seller may take possession of the property is not a "pledge of collateral security with authority to sell or dispose thereof" within the meaning of the Bills of Exchange Act. Hamilton Bank v. Gillies, 12 Man. 495. (2) Such a note is not nePa. Gazlay v. Riegel, 16 Pa. Su-gotiable. International Harvester per. 501.

[224] 5. Recital of Reservation of Title to waiving certain rights which he might exercise to delay or impede it. Instead of clogging its negotiability it adds to it, and gives additional value to the note"). But compare Overton v. Tyler, 3 Pa. 346, 45 AmD 645 (where the note contained both a warrant for judgment with release of errors and a waiver of exemption and stay laws).

But compare Samstag v. Conley, 64 Mo. 476 (where the note contained not only a waiver but also a stipulation for attorney's fees).

[a] That condition void as against public policy see Levicks v. Walker, 15 La. Ann. 245, 77 AmD 187; Harper v. Leal, 10 HowPr (N. Y.) 276.

49. Navajo County Bank v. Dolson, 163 Cal. 485, 126 P 153, 41 LRA NS 787 (construing Arizona Negotiable Instruments Law).

[a] In Kentucky this provision is omitted.

[b] Under Negotiable Instruments Law a waiver of exemption and inquisition does not affect negotiability. Johnston's Est., 20 Pa. Dist. 831.

50. Ga.-Hatcher v. Chambersburg Nat. Bank, 79 Ga. 542, 5 SE 109 (holding that a provision in a note that "the endorsers hereon contract as makers hereof and agree, as to the holder hereof, to be held liable as original makers of this note" does not alter the negotiable character of the note).

Ind.-Witty v. Michigan Mut. L. Ins. Co., 123 Ind. 411, 24 NE 141, 18 AmSR 327, 8 LRA 365 (a waiver of demand and exemption with provisions for renewal and for attorney's fees).

Kan.-Rossville State Bank V. Heslet, 84 Kan. 315, 113 P 1052, 33 LRANS 738 (dictum).

N. Y.-Buffalo Third Nat. Bank v. Bowman-Spring, 50 App. Div. 66, 63 NYS 410 (a waiver of protest with reservation of title to property in the payee until payment of note and agreement as to credits and against extension_by payee's agent).

N. D.-Pomeroy First Nat. Bank v. Buttery, 17 N. D. 326, 116 NW 341, 16 LRANS 878, 17 AnnCas 52.

Okl.-City Nat. Bank v. Kelly, 151 P 1172; De Groat v. Focht, 37 Okl. 267. 131 P 172; Missouri-Lincoln Trust Co. v. Long, 31 Okl. 1, 120 P 291.

Tex.-National Bank of Commerce v. Kenney, 98 Tex. 293, 83 SW 368 [rev 35 Tex. Civ. A. 434, 80 SW 555]. Man.-Davis v. Butler, 7 WestLR 85.

See also Denegre v. Milne, 10 La. Ann. 324 (holding that "acceptance waived" leaves the negotiability of a bill undisturbed).

Contra Richmond Second Nat. Bank v. Wheeler, 75 Mich. 546, 42 NW 963; Hegeler v. Comstock, 1 S. D. 138, 45 NW 331, 8 LRA 393 (particular statute).

51. Kan.-South Bend Iron-Works v. Paddock, 37 Kan. 510, 15 P 574; Killam v. Schoeps, 26 Kan. 310, 40 AmR 313.

Mass.-Sloan v. McCarty, 134 Mass.

245.

Minn.-Edwards V. Ramsey, 30
Minn. 91, 14 NW 272; Deering v.
Thom, 29 Minn. 120. 12 NW 350;
Stevens v. Johnson, 28 Minn. 172, 9
NW 677; Syracuse Third Nat. Bank
v. Armstrong, 25 Minn. 530.

N. D.-Fleming v. Sherwood, 24 N.
D. 144, 148, 139 NW 101, 43 LRANS
945 [cit Cyc].

Alta.-Imperial Bank v. Georges, 12 West LR 398.

Man. Keddy v. Morden, 15 Man.
629; Hamilton Bank V. Gillies, 12
Man. 495; Merchants' Bank v. Dun-
lop, 9 Man. 623.

N. B.-Prescott v. Garland, 34 N.
B. 291.

Ont.-Dominion Bank v. Wiggins,
21 Ont. A. 275; Molsons Bank v. How-
ard, 5 DomLR 875, 3 OntWN 661, 21
OntWR 278.

N. W. Terr.-Frank v. Gazelle Live
Stock Assoc., 6 Terr. L. 392, 5 West
LR 573; New Hamburg Mfg. Co. v.
Weisbrod, 4 West LR 125.

Contra Anderson v. Poirer, 13 Que.
Super. 283.

[a] Reason for this view.-"The
promise of payment and the implied
obligation to transfer the title were
mutual, and as each was the sole
consideration for the other, and both
were to be performed at the same
time, they were concurrent condi-
tions of the same agreement, in the
nature of mutual conditions prece-
dent, so that inability or refusal to
perform the one would excuse per-
formance as to the other. Benjamin
on Sales, 451 and 480. If, prior to
any default on the part of the de-
fendant, the company had retaken
possession of the property and dis-
posed of it, so that upon the matur-
ity of the defendant's obligation an
observance of the condition on its
part had become impossible, there
can be no doubt that, under such cir-
cumstances, no action could have
been maintained against him upon
his promise. An obligation of this
character is altogether too uncertain
to serve the purpose of commercial
paper, as the representative of mon-
ey in business transactions.
ries into the hands of every holder
notice of the existence of a condition
that may result in defeating any re-
covery upon it, and, therefore, can-
not have accorded to it the privileges
attaching to that kind of paper."
Syracuse Third Nat. Bank v. Arm-
strong, 25 Minn. 530, 533.

It car

[b] In North Dakota it is held that such a provision has the effect of neutralizing the otherwise posi[a] In Canada.—“Waiver of pre- tive agreement to pay; that the prosentment for payment, protest, no- vision of the Negotiable Instruments tice of protest, and of the effect of Act that an unqualified order or extending the time for payment, al- promise to pay is unconditional, although extremely unusual in Canada, though coupled with "a statement of and in part apparently ineffectual, the transaction which gives rise to do not, I think, render the promise to the instrument," is not applicable; pay conditional, or deprive the in- and that, where both the title and strument of the character of a note, the right of possession are reserved

[8 C. J.-9]

Co. v. Maxwell, (Alta.) 15 Dom LR 654, 27 West LR 41; Douglas v. Auten, (Alta.) 12. Dom LR 196, 24 West LR 676; Greenwood V. Kirby, 24 Man. 532; Prescott v. Garland, 34 N. B. 291; Dominion Bank v. Wiggins, 21 Ont. A. 275.

52. U. S.-Chicago R.-Equipment Co. v. Merchants' Bank, 136 U. S. 268, 10 SCt 999, 34 L. ed. 349 [aff 25 Fed. 809, where there was also a provision for accelerating the maturity of an entire series of notes on default of any one] (under the Illinois statute).

Ala.-Montgomery First Nat. Bank
v. Slaughter, 98 Ala. 602, 14 S 545, 39
AmSR 88; Bledsoe V. Selma City
Nat. Bank, 7 Ala. A. 195, 60 S 942.
See also Lineville First Nat. Bank v.
Alexander, 161 Ala. 580, 50 S 45.
Ark.-Exchange Nat. Bank V.
Steele, 109 Ark. 107, 158 SW 969.

Ga. Pyron v. Ruohs, 120 Ga. 1060, 48 SE 434; Howard v. Simpkins, 70 Ga. 322, 69 Ga. 773 (under Georgia code).

Ind.-Fleetwood v. Dorsey Mach. Co., 95 Ind. 491; Gilpin v. People's Bank, 45 Ind. A. 52, 90 NE 91.

Miss.-Burnley v. Tufts, 66 Miss. 48, 5 S 627, 14 AmSR 540.

Nebr.-Heard v. Dubuque County Bank, 8 Nebr. 10, 30 AmR 811 (with power to take possession and to sell and to accelerate the maturity of the note).

N. Y.-Buffalo Third Nat. Bank v. Bowan-Spring, 50 App. Div. 66, 63 NYS 410 [rev 28 Misc. 9, 59 NYS 794]; Mott v. Havana Nat. Bank, 22 Hun 354.

Oh.-Mansfield Sav. Bank v. Miller, 2 Oh. Cir. Ct. 96, 1 Oh. Cir. Dec. 383. Wis.-W. W. Kimball Co. v. Mellon, 80 Wis. 133, 48 NW 1100 (with power of entry and sale for insecurity, acceleration of maturity of note, and agreement to pay deficiency).

See also Richmond First Nat. Bank v. Badham, 86 S. C. 170, 68 SE 536 (for memoranda not destroying negotiability).

[a] Not within prohibition of Negotiable Instruments Law. A provision in a note that the property for the purchase price of which the note was given shall remain the property of the payee until it is fully paid for is not a promise to do an act in addition to the payment of money as prohibited by the Negotiable Instruments Law, and the retention of the title does not render the instrument nonnegotiable. Ex p. Bledsoe, 180 Ala. 586, 61 S 813.

53. See infra §§ 234-245.

in bonds, scrip, state paper,62 checks, a foreign bills, good solvent cash notes,65 or the like.66

The Negotiable Instruments Law especially pro-
vides that an instrument, in order to be negotiable,
must contain an unconditional promise or order to
1767 Decisions to the
pay a sum certain "in money.
contrary, holding notes payable otherwise than in
68 are abrogated in states
money to be negotiable,"
which have enacted such statute.

[§ 226] 2. Option for Alternative Payment.69
A promise or an order in the alternative for the
Pa.-Reynolds v. Richards, 14 Pa
V. Merritt, 11
Clark v. King, 2
Tenn.-Quinby
V.
Humphr. 439.

S. C.-Wingo v. McDowell, 42 S. C.
L. 446; Peay v. Pickett, 10 S. C. L.
254.

Tenn.-Lawrence v. Dougherty, 5
Yerg. 435; Looney v. Pinckston, 1
Overt. 384.

Tex.-Griffeth v. Hanks, 46 Tex.
217; Pridgen v. Cox, 9 Tex. 367 (hold-
certain
that an order for
the
ing
in
drawee's
amount payable
store is not a bill of exchange; At-
toyac River Lumber Co. v. Payne, 57
Tex. Civ. A. 327, 122 SW 278 (checks
issued to employees payable only in
merchandise at the employer's store).

Vt.-Roberts v. Smith, 58 Vt. 492,
4 A 709, 56 AmR 567 ("one ounce of
gold"); Perry v. Smith, 22 Vt. 301;
Wainwright v. Straw, 15 Vt. 215, 40
AmD 675 ("in cattle, or in grain").

Wis.-Horton v. Arnold, 17 Wis. 139; Corbitt v. Stonemetz, 15 Wis. 170 ("In such articles as the said Catharine [the payee] may need for her support").

V. Bennett,
Eng.-Williamson
(order for
Campb. 417; Martin v. Chauntry, Str.
1271, 93 Reprint 1175
of
for
and
the payment
goods
money).
Ont.-Boulton v. Jones, 19 U. C. Q.
B. 517 (payable in lumber).

Que. Gillin v. Cutler, 1 LCJur 277.
But see Spurgin v. McPheeters, 42
Ind. 527; Fink v. Maples, 15 Ind. 297.
[a] In Mississippi a note payable
in cotton at a fixed price is a promis-
sory note and may be declared on as
Rankin v. Sanders,
such, but it is nonnegotiable and sub-
ject to defense.

7 Miss. 52, 38 AmD 431.
59.

Ill-Ransom v. Jones, 2 Ill.

Ind.-McClellan v. Coffin, 93 Ind.
456.
v. Hughes, 1 J. J.
Ky.-Henry
v. Deering, 4
Marsh. 453; Halbert
Litt. 9.

Mo.-Prather v. McEvoy, 8 Mo. €61
(holding that a note "to be paid in
cut-stone work" is not assignable and
cannot avail in the hands of the as-
signee as a set-off in his favor in
another claim); Bothick v. Purdy, 3
Mo. 82.

205.

Wis.-Leonard v. Carter, 16 Wis. 607 (where the whole instrument was void for uncertainty).

For later cases, developments and changes in the law see cumulative Annotations, same title, page and note number.

payment of money or for the performance of some
other act, or a promise or an order which reserves
to the maker or the drawee the option to discharge
the obligation by the performance of some act other
than the payment of money," is not a negotiable
bili or note; but where the "holder" is given the
option to receive payment in money or to surrender
the instrument and demand the performance of
some other act, the instrument has been held nego-
tiable and valid. This last proposition is embodied
in the Negotiable Instruments Law by a provision
that the negotiable character of an instrument other-
wise negotiable is not affected by a provision which
gives the "holder" an election to require something
to be done in lieu of payment of money."
[§ 227] 3. Payable in Particular Kind of Money

-a. In General. The Negotiable Instruments Law expressly provides that the validity and negotiable character of an instrument are not affected by the fact that it designates a particular kind of current money in which payment is to be made.74 And irrespective of statute it is generally held that bills or notes payable in a particular kind of money are negotiable, the only question being whether the medium of payment designated is money. The money may be designated in various ways, and by any word or phrase which indicates money and not mere securities or obligations.76

[228] b. Payable in "Currency" or "Current Funds. The general and better rule is that instruments payable in "currency" "7 or "'current funds' are negotiable. On the other hand, there rolled, is not a negotiable instru- | York State currency"). Contra Leiment, on the theory that it "gives to ber v. Goodrich, 5 Cow. 186 (where the legal holder an election to re- "payable in Pennsylvania or New quire something to be done in lieu of York paper currency to be current in payment." Bronson v. Wilson, 186 the state of Pennsylvania, or the Ill. A. 69. state of New York").

132 [8 C. J.]

BILLS AND NOTES

are some decisions holding that such expressions as
77 79 or "current funds'' 80 render the
"currency"
instrument nonnegotiable.81 In a few states an at-
tempt has been made to distinguish instruments
payable in current funds from those payable in cur-
rency, and one class is regarded as negotiable while
the other is not.$2

The same diversity
Currency of particular place.
of authority is found in regard to instruments pay-
able in currency or funds of particular states or
places. By some courts such instruments are re-
garded as negotiable bills and notes;83 while in

ΟΙ

it has been a common practice of
drawers of bills of exchange
of promissory
or makers
checks,
notes, to indicate whether the same
are to be paid in gold or silver, or in
such notes; and the term 'current
funds' has been used to designate
any of these, all being current and
declared, by positive enactment, to
It was intended to
be legal tender.
cover whatever was receivable and
current by law as money, whether
Thus
in the form of notes or coin.
construed, we do not think the nego-
tiability of the paper in question was
impaired by the insertion of those
Bull v. Kasson First Nat.
words."
Bank, 123 U. S. 105, 112, 8 SCt 62,
31 L. ed. 97.

the

"The first objection is that it is not made payable in 'money,' that 'current funds,' in which it is made payable, should not be judicially inWe do terpreted to mean 'money.' not think this contention should prevail. This subject has been discussed exhaustively by many courts, and the conclusions they have reached on the one side and the other are not But we think that the in harmony. modern and better doctrine is that the term 'current funds' when used in commercial transactions as expression of the medium of payment should be construed to mean current money, funds which are current by law as money, and that when thus certificate of deposit construed, a payable in current funds, is in this Hatch v. Dexrespect, negotiable." ter First Nat. Bank, 94 Me. 348, 351, 47 A 908, 80 AmSR 401. In for rule.-(1) [a] Reasons these cases the terms "currency" and "current funds" are held to denote current coin of the United States or money (Fry v. Dudley, 20 La. Ann. 368; Laird v. State, 61 Md. 309; Wallace v. Souther, 16 Can. S. C. 717), (2) or the expressions are taken as showing that the parties intended to include United States legal tender paper as well as gold and silver as a medium of payment (Bull v. Kasson First Nat. Bank, 123 U. S. 105, 8 SCt 62, 31 L. ed. 97). (3) These decisions rest on the ground that those terms mean money, since the necessity of having negotiable paper payable in Black v. money is fully recognized.

Ward, 27 Mich. 191, 15 AmR 162.

79. Ala.-Mobile Bank v. Brown, 42 Ala. 108; Carlisle v. Davis, 7 Ala. 42 ("common currency of Alabama,' meaning bank notes).

Iowa.-Huse v. Hamblin, 29 Iowa
501, 4 AmR 244; Rindskoff v. Bar-
rett, 11 Iowa 172.

Mo.-Farwell v. Kennett, 7 Mo. 595.
But see Cockrill v. Kirkpatrick, 9 Mo.
697 (where note was payable in "cur-
rency of this State").
Sav. Fund Soc.
Pa.-Loudon
Hagerstown Sav. Bank, 36 Pa. 498, 78
AmD 390.

V.

Tenn.-Coffin v. Hill, 1 Heisk. 385
("currency of the country, but not in
Confederate notes").

80. Ind.-National State Bank v.
Ringel, 51 Ind. 393; Conwell v. Pum-
phrey, 9 Ind. 135, 68 AmD 611.
Iowa.-American Emigrant Co. v.
Haddock
671;
47 Iowa
Clark,
Woods, 46 Iowa 433.

V.

others it is held that they lack the elements of cer-
tainty essential to negotiable instruments.84 This
question is of little or no practical importance at
the present time, since state currency has been done
away with.

[§ 229] c. Payable in "Exchange." A bill or note payable in "New York or Chicago exchange,' or the like, is generally held not negotiable, on the theory that the promise is not one to pay in money,85 "'in ex"'with exalthough in a federal court, the words construed to were

change"
change.
N. C.-Johnson v. Henderson, 76 N.
C. 227.
Pa.-Wright v. Hart, 44 Pa. 454
("current funds at Pittsburgh").
Tex.-Texas Land, etc., Co. v. Car-
But see Williams v.
roll, 63 Tex. 48.
Arnis, 30 Tex. 37.

Vt. Collins .v. Lincoln, 11 Vt. 268.
Wis. Lindsey v. McClelland, 18
But these
Wis. 481, 86 AmD 786; Platt v. Sauk
cases are explained and criticized in
County Bank, 17 Wis. 222.
Klauber v. Biggerstaff, 47 Wis. 551, 3
Ont.-Bettis v. Weller, 30 U. C. Q.
NW 357, 32 AmR 773.
See also Stephens v. Berry, 15
U. C. C. P. 548.

B. 23.

so

mean

Drake

currency is held negotiable.
v. Markle, 21 Ind. 433, 83 AmD 358.
La-
(2) Instruments payable in current
funds are held not negotiable.
fayette Nat. State Bank v. Ringel,
51 Ind. 393; Conwell v. Pumphrey, 9
Ind. 135, 68 AmD 611.

83. Ala.-Carlisle v. Davis, 7 Ala. 42; Carter v. Penn, 4 Ala. 140 (current money of the state); Lacy v. Holbrook, 4 Ala. 88.

Ark.-Wilburn v. Greer, 6 Ark. 255 "Arkansas term the 481, where [dist Hawkins v. Watkins, 5 Ark. money" was limited, qualified, and defined by the words, "of the Fayetteville Branch"]; Graham v. Adams, 5 Ark. 261; Dillard v. Evans, 4 Ark. 175.

Ky.-McChord v. Ford, 3 T. B. Mon. 166 [dist Chambers v. George, 5 Litt. 335, on the ground that through a appears typographical error in that case the "currency" is word B. Mon. 149. "money"]; Lampton v. Haggard, 3 T.

as

Miss.-Deason v. Taylor, 53 Miss. 697; Mitchell v. Hewitt, 13 Miss. 361. Mo.-Cockrill v. Kirkpatrick, 9 Mo. 697. was

to

[a] In Indiana instruments
payable, while not negotiable under
the law merchant, are negotiable un-
Krieg v. Palmer Nat.
der statute.
[b] In Iowa (1) a note payable in
Bank, 51 Ind. A. 34, 95 NE 613.
or "current funds"
"currency"
prima facie nonnegotiable, but such
an instrument may be shown to be
negotiable by proof that under cus-
toms prevailing at the time and place
of its execution, the term used to de-
was understood
scribe the funds in which it
made payable
mean money, and that such funds
circulated as money. American Emi-
rent funds); Haddock v. Woods, 46
grant Co. v. Clark, 47 Iowa 671 (cur-
Iowa 433 (current funds); Huse v.
V. Des Moines
Hamblin, 29 Iowa 501, 4 AmR 244
(currency); Pilmer
Branch State Bank, 16 Iowa 321 (cur-
rency); Rindskoff v. Barrett, 14 lowa
101; Rindskoff v. Barrett, 11 Iowa
172 (currency). (2) In a later case,
it was held that cashier's checks,
are not negotiable.
than in money
payable "in current funds"
Dille v. White, 132 Iowa 327, 109 NW
909, 10 LRANS 510 [foll Huse v.
that differ-
would seem
Hamblin, 29 Iowa 501, 4 AmR 244].
ent decision should have been ren-
But it
dered, if the attention of the court
had been called to the Negotiable In-
struments Law.

a

rather

81. [a] The reason of the rule in these cases is based on the theory that the terms "currency" and "current funds" include other things be9 Ind. 135, 68 AmD 611; Huse v. sides money. Conwell v. Pumphrey, Hamblin, 29 Iowa 501, 4 AmR 244; Johnson v. Henderson, 76 N. C. 227; Texas Land, etc., Co. v. Carroll, 63 Tex. 48.

[b] Criticism of Campbell, J., on these cases may be found in Black v. Ward, 27 Mich. 191, 15 AmR 162.

82. Williams v. Williams, 55 Wis. 300, 12 NW 465, 13 NW 274, 42 AmR 708; Klauber v. Biggerstaff, 47 Wis. Ford v. Mitchell, 15 Wis. 304]; Lind551, 3 NW 357, 32 AmR 773 [dist sey v. McClelland, 18 Wis. 481, 86 AmD 786; Platt v. Sauk County Bank, 17 Wis. 222.

[a] An examination of the Wis-
consin cases will show that the state
of the rulings on this point is the re-
sult of the attempt of the court, in
Klauber v. Biggerstaff, 47 Wis. 551,
3 NW 357, 32 AmR 773, to introduce
a more liberal doctrine without over-
ruling prior decisions.

The rule in Indiana seems to
[b]
(1) A note payable in
be the same.

N. Y.-Ehle v. Chittenango Bank, 24 N. Y. 548; Leiber v. Goodrich, 5 Cow. 186; Keith v. Jones, 9 Johns. 120.

Oh.-Dugan v. Campbell, 1 Oh. 115. Pa.-Wright v. Hart, 44 Pa. 454 at Pittsburgh"); funds ("current Wharton v. Morris, 1 Dall. 124, 1 L. ed. 65.

Tenn.-Hicklin v. Tucker, 2 Yerg.

448.

84. U. S.-Hasbrook v. Palmer, 11 Miss.-Gordon v. Parker, 10 Miss. F. Cas. No. 6,188, 2 McLean 10.

485.

N. C.-Warren v. Brown, 64 N. C.
381.
Tenn.-Taylor v. Neblett, 4 Heisk.
491 [overr Searcy v. Vance, Mart. &
Fountain, 5
Y. 225]; Hopson
Tex.-Chevalier v. Bulford, 1 Tex.
Humphr. 140.

503.

V.

See also Scott v. Com., 5 J. J. Marsh. (Ky.) 643.

[a] But a promise to pay two hundred dollars "borrowed money in tucky" describes the funds borrowed Womack v. and not those to be paid. State Bank of Tennessee and Ken85. Brooklyn First Nat. Bank v. Walling, 1 Baxt. (Tenn.) 425. Slette, 67 Minn. 425, 69 NW 1148, 64 AmSR 429; Chandler v. Calvert, 87 Mo. A. 368.

"This note is not a note payable in It is not a money 'with exchange.' It is note payable in money at all. 'payable in New York exchange.' The those unlike is wholly which we have been considering. An instrument to be a note, in the abprovision sence of a statute, must be payable New York exchange in money. is not money; it is a commodity, or, in other words, it is property. And instrument payable in to make an Chandler v. Calvert, 87 a statute." property, a note requires the aid of Mo. A. 368, 373. 86. Bradley v. Lill, 3 F. Cas. No. 473 [overr Lowe v. 1,783, 4 Biss. was made in Chicago, and Bliss, 24 Ill. 168, 76 AmD 742] (where a note

For later cases, developments and changes in the law see cumulative Annotations, same title, page and note number,