came rightfully into possession.66 It has been held that, where a note was fraudulently put in circulation, in order to hold the maker, intentional delivery, or at least gross negligence, must be shown.67 But this principle is not supported either by argument or the weight of authority." 68 § 47. Construction where instrument is ambiguous. a. In general.—The Negotiable Instruments Law has given the force of law to a number of rules which have existed, for the most part, in the common law in nearly every jurisdiction. These statutory rules will be discussed in their order and a number of cases will be cited indicating their force and effect. Additional rules of construction, not included in the statute, have been declared by a number of decisions, and these will also be given due consideration. b. Discrepancy between words and figures expressing amount.— The rule as declared in the Negotiable Instruments Law is that: "Where the sum payable is expressed in words and also in figures "and there is a discrepancy between the two, the sum denoted by the "words is the sum payable; but if the words are ambiguous or uncertain, reference may be had to the figures to fix the amount." 70 This is also the rule as it exists in England by virtue of the English Bills of Exchange Act." This seems to have been a rule early established in commercial law, and has always been accepted by text-writers and the courts as a true rule of interpretation. 72 The 66. Martin v. Martin, 174 Ill. 371, 51 N. E. 691, 66 Am. St. Rep. 290. 67. Benson v. Huntington, 21 Mich. 415, 4 Am. Rep. 497; Palmer v. Poor, 121 Ind. 135, 984, 6 L. R. A. 469. 68. See cases cited in note 61, ante. 70. Neg. Inst. Law (N. Y.), § 36, subd. 1. See Appendix, indicating sections of law in other States. 71. English Bills of Exchange Act, 1882, § 9 (2). See Appendix. 72. Discrepancy between words and figures. Saunderson v. Piper, 5 Bing. N. C. (Eng.) 425. In this case a bill was expressed in figures to be drawn for £245; but in words for two hundred pounds, although a stamp was affixed applicable to the higher amount. It was held that evidence to show that the words "and forty-five" had been omitted by mistake was not admissible, but that the acceptance must be taken to be for two hundred pounds only. Tindal, C. J., said: "The evidence in question not being admissible, we cannot shake the rule of commercial writers, that where a difference appears between the figures and the words of the bill, it is safer to attend to the words. If we take the authorities of those writers where we have none of our own, this is a good bill for the sum expressed in the body, and, therefore, I am of the opinion that the plaintiff is entitled to judgment for £200. The commercial writers, among whom the most authoritative is Marius, have all declared that the rule of the text is the most advantageous for commercial interests. Marius (4th ed., p. 33) has said: "A bill of exchange, though written in few words, and contained in a small piece of paper, yet is of great weight and concernment in point of trade between rule arises from the fact that it is usual to write the sum in figures in the corner or margin of a note or bill, and also to express it in words in the body thereof; if any discrepancy or ambiguity exists between these figures and words, the words are to control.73 The figures constitute no part of the note or bill, but are inserted merely for convenience of reference. The contract is in every way complete without the use of such figures. The above provision of the statute also declares the general rule that where a defect exists in the amount stated in the body of the note, the figures upon the margin may be referred to for the purpose of removing any ambiguity, or even to supply the amount which had been wholly omitted in the body of the instrument.75 74 73. Parsons on Notes and Bills, p. 26; Mears v. Graham, 8 Blackf. (Ind.) 144; Rockville Nat. Bank v. Second Nat. Bank, 69 Ind. 479, 35 Am. Rep. 236. merchant and merchant, and, there- the order mentioned in words at fore, ought to be written very plain length in the bill, and not the order and legible, and without any blots, or in figures, for the reason before almending, or altering of any word leged." thereof, that so there may not arise any doubt or scruple in the payment thereof; and, therefore, it is that usually merchants do write the sum that is to be paid as well in figures as in words at length, as you may observe by the several forms of bills of exchange contained in this treatise; and if it so fall out, that through unadvisedness, or error of the pen, the figures of the sum, and the words at length of the sum, that is to be paid upon any bill of exchange do not agree together, either that the figures do mention more, and the words less, or that the figures do specify less, and the words at length more, in either, or in any such like case, you ought to observe and follow the order of the words mentioned at length, and not in figures, until further order be had concerning the same, because a man is more apt to commit an error with his pen in writing a figure than he is in writing of a word; and also because the figures at the top of the bill do only, as it were, serve as the contents of the bill, and a breviat thereof, but the words at length are in the body of the bill of exchange, and are the chief and principal substance thereof, whereunto special regard ought to be had; and, although it may so fall out that the sum mentioned in figures in the letter of advice, and the sum mentioned in figures in the bill of exchange, do agree, yet if the sum mentioned in words at length in the same bill do disagree, you ought to follow 74. Marginal figures. In the case of Smith v. Smith, 1 R. I. 398, 53 Am. Dec. 652, a bill of exchange was stated in words to be drawn for three hundred and seventyfive dollars and ninety-four cents, but the figures in the margin were $175.94. The clerk of the bank discounting the bill had altered the figures to conform to the written words, and the defendant, therefore, objected to its admission in evidence, as avoided by the alteration. The court said: 'We do not think the marginal notation constitutes any part of the bill. It is simply a memorandum or abridgment of the contents of the bill for the convenience of reference. The contract is perfect without it. If this is so, any alteration of the figures cannot avoid the contract, because it is no alteration, either material or immaterial, in the contract. See to same effect Rockville Nat. Bank v. Second Nat. Bank, 69 Ind. 479, 35 Am. Rep. 236; Riley v. Dickens, 19 Ill. 29; Corgan v. Frew, 39 Ill. 31, 89 Am. Dec. 286; Poorman v. Mills, 39 Cal. 345, 2 Am. Rep. 451. 75. When marginal figures may be referred to.-Burnham v. Allen, 1 Gray (Mass.), 496; Sweetzer v. French, 13 Metc. (Mass.) 262; Corgan v. Frew, 39 Ill. 31, 89 Am. Dec. 286; Petty v. Fleischel, 31 Tex. 169, 98 Am. Dec. c. When interest begins to run if no date is specified.— The Negotiable Instruments Law also provides that: "Where the "instrument provides for the payment of interest, without specifying the date from which interest is to run, the interest runs from "the date of the instrument, and if the instrument is undated, from "the issue thereof." 76 A similar provision is contained in the English Bills of Exchange Act of 1882.77 Issue, as here used, means the first delivery of the instrument, complete in form, to a person who takes it as a holder." 78 The rule as declared in the statute seems to be the rule as laid down by the authorities. It is a general rule of commercial law that where a note is made payable with interest, without specifying the rate, or the time from which the interest is to be computed, the note carries interest from the date of its complete execution, or its issue, at the legal rate fixed by law.79 There is some conflict of authority as to the time when 524. But in Hollen v. Davis, 59 Iowa, 444, 13 N. W. 113, 44 Am. Rep. 688, it was held that there could be no recovery at law upon an instrument in the form of a promissory note, but stating no amount in the body of the note, even though figures were set forth in the margin. An Indiana case of some note is often cited in connection with this rule of construction. In Witty v. Michigan Mut. Life Ins. Co., 123 Ind. 411, 24 N. E. 141, 18 Am. St. Rep. 327, a promissory note contained no words indicating the number of dollars to be paid in the body of the note, but the amount was specified in figures on the margin. Berkshire, J., said: "We know, as a part of the commercial history of the country, that the universal practice has been, for a period so long that the memory of man runneth not to the contrary, to represent by superscription in figures upon all obligations for the payment of money the amount or sum which is written in the body of the instrument. The superscription is always intended to represent the amount found in the body of the instrument, and not a different amount; if, therefore, an obligation is found where there is a promise to pay " dollars," but the number of dollars in the body of the instrument is blank, and the margin of the instrument is found to contain a superscription which states the number of dollars, why, in view of the usage or custom which has so long prevailed, should the body of the instrument not be aided by the superscription? We think, in such a case, the figures found in the margin should be taken as the amount which the obligor intended to obligate himself to pay, and the obligation enforced accordingly. We do not think, in such a case, that the courts would be justified in disregarding the evident intention of the parties as indicated by the superscription upon the paper, and in holding the instrument void for uncertainty, or on the ground that it is not a perfect writing. And especially are we of the opinion stated, in view of the liberal statute which we have on the subject of promissory notes, and other written obligations and their negotiation." 76. Neg. Inst. Law (N. Y.), § 36, subd. 2. For sections of statute in other States see Appendix. 77. English Bills of Exchange Act, 1882, § 9, subd. 3. 78. Neg. Inst. Law (N. Y.), § 2. For statutes in other States see Appendix. 79. Salazar v. Taylor, 18 Colo. 538, 33 Pac. 369. See also Campbell Printing Press Co. v. Jones, 79 Ala. 475; Dewey v. Bowman, 8 Cal. 145; Smith v. Goodlet, 92 Tenn. 230, 21 S. W. 106; Belford v. Beatty, 145 Ill. 414, 34 N. E. 254; Miller v. Cavanaugh, 99 Ky. 377, 35 S. W. 920; Bogan v. Calhoun, 19 La. Ann. 472; Pittman v. interest begins to run on a note payable on demand, where no time is specified in the note when such interest will commence.80 The better rule, and that apparently supported by the weight of authority, is that a promissory note, payable on demand, providing for the payment of interest, bears interest from its date, without a demand.81 82 d. Failure to date.- Where the instrument is not dated it will be considered to be dated as of the time it was issued.8 We have already considered the effect of the omission of a date upon the validity and negotiable character of an instrument.83 The rule stated in the Negotiable Instruments Law is one long established in commercial law.84 While the failure to date a note would not affect its validity or negotiability, and would be payable at a time to be determined by or computed from the date of its issue or delivery, yet it would seriously impede its untrammeled transfer, and materially affect its value as commercial paper. 85 e. Conflict between written and printed provisions. The stat ute has enacted the general rule in respect to all contracts estab Barrett, 34 Mo. 84; Richardson v. El- Am. Rep. 21; Colby v. Bunker, 68 Me. lett, 10 Tex. 190. Where there is a variance between the terms of a note and of a mortgage given as security, providing for the time of payment and the rate of interest, the rate must control, since the mortgage is only a mere incident following the debt, the obligation of which is contained in the note. Hutchinson v. Benedict, 49 Kan. 545, 31 Pac. 147; Keys v. Lardner, 55 Kan. 331, 40 Pac. 644. See also Railway Co. v. Sprague, 103 U. S. 756. 80. Gaylord v. Van Loan, 15 Wend. (N. Y.) 308; Pate v. Gray, Fed. Cas. No. 10,794a; Packer v. Roberts, 40 Ill. App. 613; Whitton v. Swope, 11 Ky. 160. There are a number of decisions to the effect that, where a note payable on demand was not made payable with interest, interest does not begin to run until payment has been demanded. Sanford v. Crocheron, 8 Civ. Pro. R. (N. Y.) 146; Bishop v. Sniffen, 1 Daly (N. Y.), 155; Patrick v. Clay, 4 Bibb (Ky.), 246; Nelson v. Cartmel, 6 Dana (Ky.), 7; Cannon v. Beggs, 1 McCord (S. C.), 370, 10 Am. Dec. 677. 81. Pate v. Gray, Fed. Cas. No. 10,794a; Causin v. Taylor, 4 Ark. 408; Francis v. Castleman, 4 Bibb (Ky.), 282; Paine v. Caswell, 68 Me. 80, 28 524. 82. Neg. Inst. Law (N. Y.), § 36, subd. 3. See Appendix for statute in other States. 83. Neg. Inst. Law (N. Y.), § 25, subd. 1. 84. In an action on a foreign bill of exchange, it was held, in De La Courtier v. Bellamy, 2 Show. (Eng.) 422, that, if the date be omitted, the court will intend that was dated at the time it was stated to have been drawn. See also Giles v. Bourne, 6 Mau. & Sel. 73; Hague v. French, 3 B. & P. 173. In general, it is not essential to a note that it should be dated; and if there be no date, it will be considered as dated at the time it was made. Parsons on Notes and Bills, p. 41. See Seldonridge v. Connable, 32 Ind. 375; Richardson v. Ellett, 10 Tex. 190. 85. In the case of Mitchell v. Culland, J., said: "Although it is not esver, ,7 Cow. (N. Y.) 336, 338, Suthersential to the legal validity of a note, that it should be dated, yet we all know that it is necessary to its free and uninterrupted negotiability. note without a date will not be discounted at our banks, nor pass in the money market without previous inquiry." A 86 lished at an early date by Lord Ellenborough. The Negotiable Instruments Law provides that "where there is a conflict between the written and printed provisions of the instrument, the written "provisions prevail."87 66 f. Doubt as to whether instrument is bill or note.- The Negotiable Instruments Law provides that "where the instrument is so ambiguous that there is doubt whether it is a bill or note, the "holder may treat it as either at his election." 88 And it is also provided that "where in a bill a drawer and drawee are the same person, or where the drawee is a fictitious person or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or a promissory note."89 The latter proposition has already been discussed under other headings.90 The former rule of construction is one which has been generally accepted by the courts and is fully recognized in all jurisdictions.91 g. When person deemed indorser.- The Negotiable Instruments Law provides that " where a signature is so placed upon the instrument that it is not clear in what capacity the person making "the same intended to sign, he is to be deemed an indorser." ,992 The rights and liabilities of indorsers will be considered in a subsequent chapter. It is also provided in the Negotiable Instruments 86. Reason for rule.-In the case of Robertson v. French, 4 East (Eng.), 130, 136, where a partly-written and partly-printed insurance policy was in controversy, Lord Ellenborough said: "The only difference between policies of assurance and other instruments, in this respect, is, that the greater part of the printed language of them, being invariable and uniform, has acquired, from use and practice, a known and definite meaning, and that the words superadded in writing (subject always to be governed in point of construction by the language and terms with which they are accompanied), are entitled, nevertheless, if there should be any reasonable doubt upon the sense and meaning of the whole, to have a greater effect attributed to them than to the printed words, inasmuch as the written words are the immediate language and terms selected by the parties themselves for the expression of their meaning, and the printed words are a general formula adapted equally to their case and that of all other contracting parties upon similar occasions and subjects." 87. Neg. Inst. Law (N. Y.), § 36, subd. 4. See Appendix for statutes of other States. 88. Neg. Inst. Law (N. Y.), § 36, subd. 5. Inst. 89. Neg. Law § 214. (N. Y.), 90. See § 7, ante. biguously worded that it is doubtful 92. Neg. Inst. Law (N. Y.), § 36, subd. 6. See Appendix for same section in statutes of other States. 93. See post, §§ 83-87. |