been held that where a note is intended to bear date as of the time of its execution, but is wrongly dated by mistake, the mistake may be corrected, except as to an innocent purchaser or indorser, who would be prejudiced by the correction.98

99

c. Use of words "for value received," or equivalent. The usual method of specifying the value given as a consideration for a negotiable instrument is by the words "value received." The rule as declared by the Negotiable Instruments Law to the effect that the omission of the words "value received," or their equivalent, does not affect the validity or negotiability of an instrument, is the same as that which existed prior to the enactment of such law, and also as that which exists in those States where the law has not yet been adopted. The insertion of such words can only be important, since, when inserted, they import that value has been received by the maker from the payee, and raises a positive presumption of a legal consideration, sufficient to sustain the promise; a presumption liable to be rebutted, but which, until rebutted, will prevail in favor of the payee and any subsequent holder.1 But a promissory note, although not expressing on its face to have been given for value received, is prima facie evidence of consideration, and, therefore, it can make no difference whether the words "value received" be or be not inserted.2

Cole, 4 Sandf. (N. Y. Super. Ct.) 79; Emery v. Vinall, 26 Me. 295; Cumberland Bank v. Maybery, 48 Me. 198; Bayley v. Tabor, 5 Mass. 286; McSparran v. Neeley, 91 Pa. St. 17.

98. Alimich v. Downey, 45 Minn. 460, 48 N. W. 197.

99. Alabama.- Johnson v. Johnson, Minor, 263.

New York.- Kimball v. Huntington, 10 Wend. 675; Carnwright v. Gray, 127 N. Y. 92, 27 N. E. 835, 24 Am. St. Rep. 424, 12 L. R. A. 845; Bruyn v. Russell, 52 Hun, 17; Kinsman v. Birdsell, 2 E. D. Smith, 395; Underhill v. Phillips, 10 Hun, 591.

1. Story on Promissory Notes, § 51. 2. Stacker v. Hewitt, 2 Ill. 207.

California. People v. McDermont, See also Story on Promissory Notes,

8 Cal. 288.

Colorado.- Cowan V. Hallack, 9 Colo. 572, 13 Pac. 700; Salazar v. Taylor, 18 Colo. 538, 33 Pac. 369.

Connecticut - Bristol v. Warner, 19 Conn. 7. But in the case of Edgerton v. Edgerton, 8 Conn. 6, it was held that a promissory note not expressed to be for "value received" is not a specialty, importing a consideration.

Georgia.- Mitchell v. Rome R. Co., 17 Ga. 574.

Massachusetts.-Townsend v. Derby, 3 Metc. 363; Dean v. Carruth, 108 Mass. 242.

New Hampshire.- Martin v. Stone, 29 Atl. 845.

§ 51, citing Hatch v. Trayes, 11 Ad. & E. (Eng.) 702.

There are cases, however, to the effect that the omission of such words, or words of equivalent import, will destroy the presumption of consideration, as between the original parties. Bourne v. Ward, 51 N. E. 191; Edgerton v. Edgerton, 8 Conn. 6; Saxton v. Johnson, 10 Johns. (N. Y.) 417.

In the case of Courtney v. Doyle, 10 Allen (Mass.), 122, the promissory note under consideration did not purport to have been given for a valuable consideration, and long after its delivery and acceptance it was signed by another person as promisor and the

d. Omission of place of execution or payment. The validity or negotiability of an instrument has never been held to be affected by failure to state the place where made, or the place where it is to be paid.3 Where the note is not made payable at any particular place and the maker has a known residence within the State, in order to charge the indorsers the holder must demand payment at such address. Contrary cases, however, have held that where no place of payment is specified, the place where the instrument is executed is the place of payment, and that demand must be made at such place.

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5

date altered; it was held that such new signer was not liable upon the note without proof of a new consideration.

Proof of consideration. In the case of Bruyn v. Russell, 52 Hun (N. Y.), 17, 4 N. Y. Supp. 784, the plaintiff produced a promissory note which contained the words, "for value received," and upon the outset, anticipating an attack by the defendants upon the consideration, attempted to establish such consideration affirmatively. It was held that if the plaintiff had rested her case upon the presumption of consideration, which the note itself imported, the burden would have been cast upon the defendant to overthrow this presumption, but having undertaken to establish the consideration affirmatively, the presumption of a valid consideration was no longer of any avail.

Hun (N. Y.), 280, 14 N. Y. Supp. 591.

3. In general, the place or date in a bill or note is not material; it is proper, however, in all cases to insert the name of the place where the bill is really made, and when the drawer is not a person well known in the commercial world, it is desirable for him to mention the number of his house and the street in which he resides, in order that the holder may be the better enabled to find him out, in case his responsibility is doubted, or in case acceptance or payment should be refused by the drawee. Chitty on Bills, p. 147. See Story on Promissory Notes, § 49.

It has been laid down that in all cases the drawer ought to name the place of payment, either in the body or subscription of the bill; but this is not essential, and in general the drawer merely subscribes the address. of the drawee, without pointing out any place of payment, and then the bill is considered payable, and should be presented at the residence of the drawee at the time the bill was made, or to him personally anywhere. Chitty on Bills, p. 151.

On a later trial of the same case, the payee gave no evidence of the existence of a consideration, except the production of the note and the proof of the maker's signature. Defendants then called a witness who testified to a conversation with the plaintiff, in which she stated that the note was a gift. Held, under this evidence, that plaintiff was not entitled to recover. The court, in this case, quotes from Perley v. Perley, 144 Mass. 104, 10 N. E. 726, to the effect that while the production of a note and proof of defendant's signature make a prima facie case for plaintiff, the burden of proof still remains upon the plaintiff to prove consideration, and if there is any evidence upon this on behalf of the defendant, plaintiff must show, upon a preponderance of the whole evidence, 5. Lewis v. Headley, 36 Ill. 433, 87 that the note was given for a valuable Am. Dec. 227; Ricketts v. Pendleton, consideration. Bruyn v. Russell, 60 14 Md. 320; Warner v. Citizens' Nat.

4. Anderson v. Drake, 14 Johns. (N. Y.) 114; Campbell v. Clark, Fed. Cas. 2,355; Rudolph v. Brewer, 96 Ala. 189, 11 South. 314; Hartford Bank v. Green, 11 Iowa, 476; Blossman v. Mather, 5 La. Ann. 335; In re Parisian C. & S. Co.'s Estate, 173 Pa. St. 507, 34 Atl. 224; Freese V. Brownell, 35 N. J. L. 285, 10 Am. Rep. 239; Overland Gold-Mining Co. v. McMaster, 19 Utah, 177, 56 Pac. 977.

§ 43. Instruments bearing seal.

a. General rule.- As a general rule, independent of the statute, a sealed promissory note is not negotiable. Wherever a sealed note is not made negotiable by statute, it is to be treated as a specialty, and it has been held to be correctly described as a bond.8 Though not a valid negotiable promissory note, it is a valid contract, and the payee may recover on it according to the terms of the agreement." If such sealed instruments are assignable, an assignee may recover thereon in the same manner as the payee, but he takes the same subject to every legal defense arising from the contract,10 and must declare thereon as upon any other contract." The rule does not, however, apply to sealed instruments issued by municipalities or private corporations;12 and it has been generally held that the commercial paper of a corporation does not lose the quality of negotiability by having attached thereto the corporate seal.13

Bank, 6 S. D. 152, 60 N. W. 746;
Blodgett v. Duryea, 32 Vt. 361.

6. United States.- United States Bank v. Donnally, 33 U. S. 361, 8 L. Ed. 974.

Delaware.- Conine v. Junction & B. R. Co., 3 Houst. 288, 89 Am. Dec. 230. Indiana.- Lewis V. Wilson, 5 Blackf. 370.

Michigan.- Rawson v. Davidson, 49 Mich. 607, 14 N. W. 565.

Minnesota.- Brown v. Jordhal, 32 Minn. 135, 19 N. W. 650, 50 Am. Rep. 560; Helfer v. Alden, 3 Minn. 332.

New York.- Merrit v. Cole, 9 Hun, 98; Clark v. Farmers' Woolen Mfg. Co., 15 Wend. 256.

Oregon.- Osborne v. Hubbard, 20 Ore. 318, 25 Pac. 1021.

Pennsylvania.- Folwell v. Beaver, 13 Serg. & R. 311; Bancroft v. Haines, 31 Wkly. Notes Cas. 248.

South Carolina.- Parks v. Duke, 2 McCord, 380; Foster v. Floyd, 4 McCord, 159.

Vermont.- Read v. Young, 1 D. Chip. 244.

10. Jerome v. Whitney, 7 Johns. (N. Y.) 322.

11. Steele v. Oswego Cotton Mfg. Co., 15 Wend. (N. Y.) 265; Brown v. Lockhart, 1 Miss. 409.

12. Zabriskie v. Cleveland, C. & C. R. Co., 23 How. (U. S.) 381; Winfield v. Hudson, 28 N. J. L. 255; Morris Canal Co. v. Lewis, 12 N. J. Eq. 323; County of Beaver v. Armstrong, 44 Pa. St. 63; Mason v. Frick, 105 Pa. St. 162, 51 Am. Rep. 191; Stevens v. Philadelphia Ball Club, 142 Pa. St. 52, 21 Atl. 797; Mackay v. St. Mary's Church, 15 R. I. 121, 23 Atl. 108, 2 Am. St. Rep. 881; Central Nat. Bank v. Charlotte, etc., R. Co., 5 S. C. 156, 22 Am. Rep. 12.

13. In New York the rule seems to have been firmly established in the case of Chase Nat. Bank v. Faurot, 149 N. Y. 532, 44 N. E. 164, where the proposition in the text seems to have been laid down.

Wisconsin.- Parkinson v. McKim, 1 573. Pin. 214.

7. Clark v. Farmers' Woolen Mfg. Co., 15 Wend. (N. Y.) 256; Warren v. Lynch, 5 Johns. (N. Y.) 240.

8. Duncan v. McAffee, 3 Ill. Scam.) 559.

9. Maber v. Massias, 2 W. (Eng.) 1072: Edwards on Bills Notes, p. 209.

As to municipal bonds, see Bank of Rome v. Village of Rome, 19 N. Y. 20; Dinsmore v. Duncan, 57 N. Y. In Mercer County v. Hacket, 1 Wall. (U. S.) 83, the United States Supreme Court held county bonds under seal to be negotiable instruments. Mr. Justice Grier said, in speaking of the bonds issued under seal: "But there is nothing immoral or contrary to public policy in making them neand gotiable if the necessities of commerce require that they should be so. A

(2

Bl.

b. Statutory rule.- The Negotiable Instruments Law has declared that the validity and negotiable character of an instrument are not affected by the fact that it bears a seal.14 Such declaration fixes the rule in all States where the law has been adopted.15 But before the enactment of such law it was provided by statute in many of the States that a promissory note under seal was negotiable.16

$ 44. Date of instrument.

a. In general. We have already seen that the validity and negotiable character of an instrument are not affected by the fact that it is not dated.17 Notwithstanding this rule, the date is very important as a matter of convenience, for in most cases they are made payable so many months or days after date.18 Although the

mere technical dogma of the courts or the common law cannot prohibit the commercial world from inventing or issuing any species of security not known in the last century."

As to corporate bonds under seal, see Brainerd v. N. Y. & H. R. Co., 25 N. Y. 496, in which the court said: "The point of objection, when it is sought to bring such securities within the law of commercial paper, is that, being under seal, they are deeds, and commercial instruments are simple contracts. But when such obligations are issued to secure the payment of money upon time, and contain on their face an expression showing that they are intended to pass from one person to another, and thus to perform the office of bills and notes or of money, as the words 'bearer,' or 'assigns,' or 'holder,' or the like, the courts of this country, with a single exception, and those of this State, without any exception, have concurred in attaching to them the attributes of commercial paper." But see Clark V. Farmers' Woolen Mfg. Co., 15 Wend. (N. Y.) 256, where it is held that the effect of affixing the seal of a corporation to a contract is the same as where a seal is affixed to the contract of an individual, and that a corporate promissory note under seal is, therefore, nonnegotiable. This case is clearly overruled by the cases above cited.

adopted the Negotiable Instruments Law see Appendix.

as

16. In Pennsylvania, Virginia, Georgia, Arkansas, Missouri, and Mississippi, sealed instruments, well as notes, are made negotiable by statute; and in Arkansas all agreements and contracts in writing, for the payment of money or property, are made assignable. 3 Kent's Comm. 73.

In many other States, as in Ohio, Iowa, Kansas, Nebraska, Kentucky, Texas, North and South Dakota, Montana, and Mississippi, the use of a seal or scrawl, or other semblance of a seal, by any private person in making an instrument, does not in any way affect it or vary the rights of the parties.

17. Neg. Inst. Law (N. Y.), § 25 (1). For same section in statutes of other States see Appendix.

18. Story on Promissory Notes ($ 45) contains the following: "Great practical difficulties must, however, arise in many cases, from the omission of the date, and, therefore, it rarely occurs, except from inadvertence or mistake. Thus, if a note be payable in a certain number of days after its date, it is plain that the omission must create great embarrassment and difficulty in ascertaining when the note was actually made and delivered to the payee. such a case the time will be computed from the day when it was issued or made, or if that cannot be exactly ascertained, from the day when its 15. For list of States which have existence can first be established."

14. Neg. Inst. Law (N. Y.), § 25 (5). For same section in statutes of other States see Appendix.

In

date is not material to the validity of an instrument, if it has been inserted it cannot be altered without the consent of all the parties.

19

b. Presumption as to date; statutory provision.- The Negotiable Instruments Law contains the following: "Where the in"strument 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." 20 This statutory provision is clearly a declaration of the common-law rule. The date of an instrument in writing is only presumptive evidence of the time of its actual execution; and whenever fraud or mistake is alleged, this presumption may be contradicted by parol evidence.21 This is an application to commercial paper of the general rule that whenever the time of the execution of any writing, even of the most solemn kind, becomes material, it may be proved by parol, not merely to supply an omission, where the paper itself is without date, but in opposition to the date when it contains one.22

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c. Antedated and postdated instruments. The general rule as obtained from all the authorities is that declared by the following section of the Negotiable Instruments Law: "The instrument is "not invalid for the reason only that it is antedated or postdated, 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:" 23 Mr. Edwards has stated the law as follows: It is common to date bills and notes on the day they are made, but there is no legal objection, either to antedating or postdating them; nor is the fact that a note postdated is negotiable before the day of its date a legal ground of suspicion, so as to put the indorsee upon inquiry, and subject him to the equities existing between the original parties." 24 A promissory note cannot be antedated for the purpose of evading a stat

19. Martin v. Miller, 4 T. R. (Eng.) 320.

20. Neg. Inst. L. (N. Y.), § 30. For the same section in statutes of other States see Appendix.

21. Germania Bank v. Distler, 67 Barb. (N. Y.) 333, 4 Hun, 633, affd. in 64 N. Y. 642; Almich v. Downey, 45 Minn. 460, 48 N. W. 197.

22. Draper v. Snow, 20 N. Y. 331. In the case of Breck v. Cole, 4 Sandf. (N. Y.) 79, Judge Duer said: "The

date of an instrument in writing is only presumptive evidence of the time of its actual execution; and it is settled and familiar law that this presumption, whenever fraud or mistake is alleged, may be contradicted by parol evidence."

23. Neg. Inst. L. (N. Y.), § 31. For the same section in statutes of other States see Appendix.

24. Edwards on Bills and Notes, p. 151.