and specifying no time of payment, are due from the date thereof, and are payable on demand.

A note given to an insurance company, in terms payable in such portions and at such times as the directors may require, is construed to be, in legal effect, payable on demand;92 the same is true where a note is made payable at the maker's convenience, he to be the sole judge of such convenience.93

e. Instruments indorsed when overdue. It is generally conceded by the authorities that where there is an indorsement after maturity, a note or bill, as to the indorser, becomes payable within a reasonable time upon demand.9+ And while a demand is necessary in such cases, it has been held that where a note was protested and afterward sold by the indorsers, without erasing their indorsement, they will be held responsible for the payment of the same without further notice.95

f. What constitutes determinable future time; statutory provision. The Negotiable Instruments Law contains the following

Bailey, 5 Ohio St. 13, 64 Am. Dec. 632.

92. Howlands v. Edmunds, 24 N. Y. 307; Colgate v. Buckingham, 39 Barb. (N. Y.) 177.

Chalmers, commenting on this provision, says: "Before this enactment

Distinction between check and bill of exchange. In the case of Bull v. 93. Smithers v. Junker, 41 Fed. 101. Bank, 123 U. S. 105, 8 Sup. Ct. 62, 94. Leavitt v. Putnam, 3 N. Y. 494. Judge Field said: "When an instru- 95. St. John v. Roberts, 31 N. Y. 441. ment is drawn upon a bank or a person Presentment where overdue bill engaged in the banking business and or note is accepted or indorsed.merely directs the payment to a party The English Bills of Exchange Act, of a specified sum of money, which is 1882 (§ 10 [2]), provides that "Where at the time on deposit with the drawee, a bill is accepted or indorsed when it without designating a future day of is overdue, it shall, as regards the acpayment, the instrument is to be ceptor who so accepts, or any indorser treated as a check. The chief points who so indorses it, be deemed a bill of difference are that a check is alpayable on demand." ways drawn on a bank or banks; no days of grace are allowed; the drawer is not discharged by the laches of the holder in presenting it for payment unless he can show he has sustained some injury by the default; it is not due until payment is demanded," etc. See also Exchange Bank of Wheeling turity, the indorser was entitled to v. Sutton Bank, 78 Md. 577, 28 Atl. have it presented for payment, and 563, 23 L. R. A. 173; Smith v. Janes, to receive notice of dishonor in the 20 Wend. (N. Y.) 192, 32 Am. Dec. event of nonpayment, within a reason527; Harker v. Anderson, 21 Wend. able time" Citing Patterson v. Todd, (N. Y.) 372; Chapman v. White, 6 18 Pa. St. 433; Essenlow v. Dillenback, N. Y. 412, 57 Am. Dec. 464; Bowen 22 Hun (N. Y.), 23. v. Newell, 8 N. Y. 190; Salt Springs Bank v. Syracuse Sav. Inst., 62 Barb. (N. Y.) 101.

the English law on the subject dealt with, was very obscure; but it had

been held in the United States that where a bill was indorsed after ma

"Aliter, if an indorser took up a dishonored bill, and reissued it on his original indorsement, for his liability The English Bills of Exchange Act was then already fixed (Citing St. (§ 73) defines a check as a bill of ex- John v. Roberts, 31 N. Y. 441). The change drawn on a banker and pay- present clause of the above section able on demand. gives effect to the American rule."

96

provision, declaratory, for the most part, of the common law, and apparently derived from a similar provision contained in the English Bills of Exchange Act of 1882,97 with the exception of subdivision 2, which is not contained in that act:

"An instrument is payable at a determinable future time, “within the meaning of this act, which is expressed to be payable: "1. At a fixed period after date or sight; or

"2. On or before a fixed or determinable future time specified "therein; 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.

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

g. Instrument payable at fixed period after date or sight.— Nearly all negotiable instruments are made payable at a fixed period after date or sight. Mr. Byless has said: "The expression after sight,' on a bill of exchange, means after acceptance, or protest for nonacceptance, and not after a mere private exhibition to the drawee, for the sight must appear in a legal way. But if a note is made' after sight,' the expression merely imports that payment is not to be demanded till it has been again exhibited to the maker; for a note being incapable of acceptance, the word 'sight' must, on a note, bear a different meaning from the same word on a bill." It has been held in an interesting and well-considered Illinois case that a note in which the parties had inserted a specific date of payment and had also specified in detail an executory consideration which might never be performed was a negotiable promissory note."

417, 19 Am. St. Rep. 51, in which the facts were as follows: The note was given by Siegel, Cooper & Co., in form following:

96. Neg. Inst. Law (N. Y.), § 23. & Sav. Bank, 131 Ill. 569, 23 N. E. See Appendix for same section of statutes of other States. As to construction of this section see Third Nat. Bank v. Spring, 28 Misc. (N. Y.) 9, 59 N. Y. Supp. 794, where it was held that the section did not apply to a conditional sale note.

97. English Bills of Exchange Act, 1882, § 11.

98. Byles on Bills (16th ed.), p. 91, citing Campbell v. French, 6 T. R. (Eng.) 212.

“$300.

CHICAGO, March 5, 1887. "On July 1, 1887, we promise to pay D. Dalziel, or order, the sum of three hundred dollars, for the privilege of one framed advertising sign, size

X

inches, one end of each of one hundred and fifty-nine street cars of the North Chicago City Railway Company, for a term of three months from May 15, 1887.

99. Fixed date of payment as affected by executory consideration, etc. The case referred to in the text is Siegel, Cooper & Co. v. Chicago Trust "(Signed) SIEGEL, COOPER & Co."

h. Instrument payable on or before a certain date.- Where an instrument is payable at the option of the maker or acceptor on or before a certain date it is quite uniformly regarded as negotiable,

*

*

This note was indorsed by Dalziel, bility, unless it appears, through the the payee, to the Chicago Trust and recital, that it qualifies the promise Savings Bank, for value, on the day of to pay, and renders it conditional or its execution. It appeared that before uncertain, either as to the time of paythe time when the privilege of adver- ment or the sum to be paid. Daniel tising was to commence, Dalziel for- on Negotiable Instruments, §§ 790feited any right to use the cars in the 797; Davis v. McCready, 17 N. Y. 230, manner indicated, and the privilege 70 Am. Dec. 461; State Nat. Bank specified was never furnished appel- v. Cason, 39 La. Ann. 865; Goodloe v. lants. Upon the trial it was insisted Taylor, 13 N. C. 458; Stevens v. Blunt, that the instrument was a simple con- 7 Mass. 240. tract only and that failure of con- "The doctrine of those cases, where sideration was available, therefore, there are both a certain day of payagainst the indorsee of the paper for ment and one more or less contingent, value and before due. The court, how need not be here invoked; for the time ever, held that the note was negotiable, of payment in the instrument under and being payable on a specific date consideration is not made to depend and in the hands of an innocent party upon the happening or not happening for value could be recovered upon. of any event, but is specific and certain, The Supreme Court affirmed the judg- and must occur by the efflux of time, ment. We have deemed it important alone.

in this connection to give the following "If it be conceded, as it must, that extracts from the opinion of the court a condition inserted in a promissory in that case: note, postponing the day of payment "It is not contended that the in- until the happening of some uncertain dorsee had any other notice than that or contingent event, will destroy its contained in the instrument itself, and negotiability, and render the instruit is apparent that at the time of its ment a mere agreement, yet under the indorsement, which was the day of its authorities, if by the instrument the execution, no right to the consideration maker promises to pay a sum certain had accrued to the makers. It is a at a day certain to a certain person promise to pay a certain sum of money or his order, such instrument must be at a day certain, for a consideration regarded as negotiable, although it thereafter to be rendered, and depends also contains a recital of the considerafor its validity upon the implied prom- tion upon which it is based, and alise of the payee to furnish the con- though it further appear that such sideration at the time and in the man- consideration, if executory, may not ner stipulated; that is, it is a promise have been performed. Here the money to pay a sum certain on a particular was payable, absolutely, on the first day in consideration of the promise of day of July, 1887, a time when the the payee to do and perform on his contract for the advertising could not part. A promise is a valuable con- have been completed. If the instrusideration for a promise. ment had remained the property of 'But the question remains, whether the payee, and upon its maturity and the statement or the recital of the performance to that time, suit had consideration on the face of the instru- been brought, it is clear that no plea ment impairs its negotiability, and in of partial failure of consideration could this instance amounts to a condition have been sustained, for the reason precedent. The mere fact that the con- that the entire term had not then exsideration for which a note is given pired. No analysis of the instrument is recited in it, although it may ap- itself is necessary. The most careful pear thereby that it was given for or examination of it will fail to disclose in consideration of an executory con- a condition precedent to the payment tract or promise on the part of the of the money at the time stipulated. payee, will not destroy its negotia- Nor is there anything in the recital of

because payment thereof cannot be compelled before the date of maturity, and, therefore, there is nothing uncertain as to the date of payment, as far as the liability of the indorser or drawer is con

"On account of contract when com

"GUY & AMERY.

Lafayette Place."

the consideration to put the indorsee upon inquiry at the time the indorse- pleted and satisfactory. ment was made. Indeed, it is clear that at the time no inquiry would have "To Rev. Father DRUMGOOLE, No. 2 led to notice that Dalziel would fail to comply with his contract on the 15th This order was accepted by the deof May thereafter, when the term was fendant by writing upon the face to commence. All that the recitals thereof "Accepted," and subscribing would give notice of was, that the his name thereto. On the day of its note was given in consideration of an date G. & A. indorsed and delivered agreement on the part of the payee the note over to plaintiff, the order that the privilege of advertisement named should be enjoyed by the specified therein, to wit, 12th of Sepwas at the expiration of the time makers for three months from May 15, tember, 1883, presented to the defend1887. Giving to the language em- ant for payment, which was refused, ployed its broadest possible meaning, and the action was brought to recover it cannot be construed as notice to the the amount payable. The defense reindorsee of the future breach of the lied upon was that the work which contract by Dalziel. The presumption G. & A. contracted with the defendant of law would be, that the contract to do was not fully performed and that, would be carried out in good faith, therefore, the money upon the order and the consideration performed as had not, therefore, become due and stipulated. The makers had put their promissory note into the hands of Dal- payable. Upon this ground plaintiff was nonsuited at the trial. While ziel upon an expressed consideration the Court of Appeals held on this which they were thereafter to receive, was imand for the performance of which they ground that the nonsuit had seen fit to rely upon the under- proper, it did not hold that the order was not a bill of exchange expressly taking of Dalziel, and we are aware payable in forty days whether the of no rule by which they can hold this contract was completed or not. The indorsee for value before due and becourt says: fore the time of performance was to begin, chargeable with notice that the promise upon which the makers relied would not be kept and performed. Wade on Notice, § 94a; Loomis V. Mowry, 8 Hun (N. Y.), 312; Davis v. McCready, 17 N. Y. 230, 92 Am. Dec.

461."

The foregoing case should be collated with Home Bank v. Drumgoole, 109 N. Y. 63, 15 N. E. 747. In that case the firm of Guy & Amery contracted with the defendant to make, put up, complete, and paint a wire fence for the price of $1,150. This contract was entered into in writing on the 24th of July, 1883. On the 31st day of July, 1883, G. & A. drew upon the defendant the following order:

66

It was drawn by the contractors to their own order, and accepted by the contract had been done. the defendant before any work under It is against every probability that he intended to accept the order and obligate himself absolutely to pay the contract price, whether the work was performed

or not. It was the clear intention of

the parties that the money specified in the order should be paid when the

contract

and not before; and by accepting the was completely performed, order the defendant became obligated to pay it only according to its tenor and effect, and he was not, therefore, obligated to pay prior to the performance and completion of the contract. It is quite true that the specification of forty days after date as the time for payment of the order produces some doubt and confusion. But the time was probably inserted with the expectation that the contract would be performed, as it could have been,

cerned. But if the note or bill is payable before maturity at the option of the payee or holder it becomes uncertain as to the time of payment and is, therefore, nonnegotiable. And in Massachusetts,

66

within that time, so that the money 297; Gill v. First Nat. Bank (Tex. should not, in any event, be payable in Civ. App.), 47 S. W. 751. a shorter time. It is difficult to give In the case of First Nat. Bank v. any proper meaning to the words on Skeen, supra, a note payable “on or account of contract when completed,' before" a certain day was under conif the amount was to be absolutely sideration. The court, after considerpayable at the end of forty days, ing the object and purposes of bills of whether the contract was then com- exchange and the rules relating to pleted or not." their use, said: Having in view the This case, however, is clearly dis- reasons upon which these rules are tinguishable from Siegel v. Chicago, founded, it seems obvious that a ceretc., Bank, supra, because in the New tainty of ultimate payment should York case, reading the terms of the not be considered impaired by the whole contract together, it seems to intervention of an option in favor of be clear that there was no intention the maker to discharge his obligation to pay until the work had been fully at an earlier time. The paper still performed. In this respect it differs widely from the Illinois case.

retains a fixed date when the promise to pay must be performed. It is no 1. Payments "on or before."— It more uncertain for practical purposes was held in the case of Mattison v. than a bill drawn, for example "at Marks, 31 Mich. 421, 18 Am. Rep. sight," or "on demand," neither of 197, that a promise “to pay on or which phrases has ever been held to before " a day named states the time diminish negotiability. Yet, with refor payment with sufficient certainty gard to bills so drawn, the holder exfor the purpose of a promissory note. ercises the unquestioned option of A note so drawn is due on the day fixing the time when the direction to named and not before, and the maker pay becomes absolute." may pay it sooner, but this would only be a payment in advance of his legal liability.

2. Payments before maturity at option of holder. The rule as expressed in the text is accepted as true by A promissory note wherein the the majority of the cases. First Nat. maker promises to pay a certain sum Bank v. Bynum, 84 N. C. 24, 37 "six months after date or before, if Am. Rep. 604; Carrol County Sav. made out of the sale of" an article Bank v. Strother, 28 S. C. 504, 63 therein named, is absolute at the ex- S. E. 313; Morgan v. Edwards, 53 piration of the six months whether Wis. 599, 11 N. W. 21, 40 Am. Rep. the amount has been made by such 781. sale or not. Walker v. Woolen, 54 Ind. 164, 23 Am. Rep. 639. See also Ernst v. Steckman, 74 Pa. St. 13; Cota v. Buck, 7 Metc. (Mass.) 588.

In the case of Mahoney v. Fitzpatrick, 133 Mass. 151, 43 Am. Rep. 502, a promissory note payable on demand or in three years from this date," with interest at a certain rate during said term, or for such further time as said principal sum or any part thereof shall remain unpaid," was held not negotiable. The court said: "Assuming the true construction to be that the promise contained in the note is to pay in three years at all events, and sooner if demand is made by the holder, the question is presented whether a note payable at a time named therein or earlier, at the option of the holder, shown by a demand made, is negotiable. The ob

See generally as to instruments payable on or before a certain date, Charl-“ ton v. Reed, 61 Iowa, 166, 16 N. W. 66; Duncan v. City of Louisville, 13 Bush (Ky.), 378, 26 Am. Rep. 201; First Nat. Bank v. Skeen, 101 Mo. 683, 14 S. W. 732, 11 L. R. A. 748; Curtis v. Horn, 58 N. H. 504; Jordan v. Tate, 19 Ohio St. 586; Buchanan v. Wren, 10 Tex. Civ. App. 560, 30 S. W. 1077; Dorsey v. Wolff, 142 Ill. 589, 32 N. E. 495, 34 Am. St. Rep. 99; Leader v. Plante, 95 Me. 339, 50 Atl. 54; Hunter v. Clarke, 184 Ill. 158, 56 N. E.