ation, each indorser from his immediate indorsee.24 And thus the instrument in its circulation bears upon itself. prima facie proof of a consideration received by any of the parties against whom it is sought to be enforced. The student must, however, note that, although these words are well-nigh universal in negotiable bills and notes, they are in no wise necessary to them.25 Their omission is unimportant, because the negotiable instrument itself imports a consideration. A mere production of the instrument on a trial is prima facie proof of the fact that it was given for a sufficient consideration.26

24 N. I. L. § 24; Edw. Neg. Inst. § 439; Chit. Bills, 69; Story, Prom. Notes, 7, 81. See note 26, infra.

25 N. I. L. § 6 (subd. 2); McLeod v. Hunter, 29 Misc. Rep. 558, 61 N. Y. Supp. 73 (N. I. L.); Clarke v. Marlow, 20 Mont. 249, 50 Pac. 713; Underhill v. Phillips, 10 Hun (N. Y.) 591; Arnold v. Sprague, 34 Vt. 402; People v. McDermott, 8 Cal. 288; Jennison v. Stafford, 1 Cush. (Mass.) 168, 48 Am. Dec. 594; Dean v. Carruth, 108 Mass. 242. 26 N. I. L. § 24; Underhill v. Phillips, 10 Hun (N. Y.) 591; Kimball v. Huntington, 10 Wend. (N. Y.) 675, 25 Am. Dec. 590; Townsend v. Derby, 3 Metc. (Mass.) 363; Bank of Monticello v. Dooly, 113 Wis. 590, 89 N. W. 490 (N. I. L.); Bringman v. Von Glahn. 71 App. Div. 537, 75 N. Y. Supp. 845 (N. I. L.); Karsch v. Pottier & Stymus Mfg. & Imp. Co., 82 App. Div. 230, 81 N. Y. Supp. 782 (N. I. L.), semble; Hickok v. Bunting, 92 App. Div. 167, 86 N. Y. Supp. 1059 (N. I. L.); Moak v. Stevens, 45 Misc. Rep. 147, 91 N. Y. Supp. 903 (N. I. L.); Benedict v. Kress, 97 App. Div. 65, 89 N. Y. Supp. 607 (N. I. L.), semble; Royal Bank of New York v. Goldschmidt, 51 Misc. Rep. 622, 101 N. Y. Supp. 101 (N. I. L.), semble; Colborn v. Arbecam, 54 Misc. Rep. 623, 104 N. Y. Supp. 986 (N. I. L.); National Park Bank of New York v. Saitta, 127 App. Div. 624, 111 N. Y. Supp. 927 (N. I. L.), semble; Joveshof v. Rockey, 58 Misc. Rep. 599, 109 N. Y. Supp. 818 (N. I. L.), semble; Ryan v. Sullivan, 143 App. Div. 471, 128 N. Y. Supp. 632 (N. I. L.); Sabine v. Paine, 148 App. Div. 730, 132 N. Y. Supp. 813 (N. I. L.); First Nat. Bank v. Stallo, 160 App. Div. 702, 145 N. Y. Supp. 747 (N. I. L.); Black v. First Nat. Bank, 96 Md. 399, 54 Atl. 88 (N. I. L.), semble; Marshall v. Thomas, 31 Ohio Cir. Ct. R. 363; Lynchburg Milling Co. v. National Exch. Bank of Lynchburg, 109 Va. 639, 64 S. E. 980 (N. I. L.); American Automobile Co. v. Perkins, 83 Conn. 520, 77 Atl. 954 (N. I. L); Hawkins v. Windhorst, 82 Kan. 522, 108 Pac. 805 (N. I. L.); Utah Nat. Bank of Salt Lake City v. Nelson, 38 Utah, 169, 111 Pac. 907 (N. I. L.); Niles v. United States Ozocerite Co., 38 Utah, 367, 113 Pac. 1038 (N. I. L.), semble; Fassett v. Boswell, 59 Or. 288, 117 Pac. 302 (N. I. L.); Rhodes v. Guhman, 156 Mo. App. 344, 362, 137 S. W. 88 (N. I. L.). As to whether a non-negotiable bill or note, not re

DAYS OF GRACE

40. Days of grace are days added to the nominal time of payment of all bills or notes except those impliedly or expressly payable on demand, and are computed by excluding the day of date and including the day of payment.

40a. The Negotiable Instruments Law abolishes days of grace.27

Originally, days of grace were days allowed the drawee or acceptor of a foreign bill by the holder to enable him. to provide funds to meet the bill. They were days obtained by the drawee or acceptor through the grace of the holder. This was first custom, then law. These days are now extended to cases of negotiable inland bills and promissory citing value received, is deemed prima facie to have been given for a consideration, see 4 Am. & Eng. Ency. Law (2d Ed.) 80, 187; Deyo v. Thompson, 53 App. Div. 9, 65 N. Y. Supp. 459; Kinsella v. Lockwood, 79 Misc. Rep. 619, 140 N. Y. Supp. 513 (N. I. L.); Richards v. Levison (Sup.) 142 N. Y. Supp. 273 (N. I. L.); note 16, chapter I, supra. If the defendant in an action upon a negotiable bill or note relies upon want of consideration as a defense, the burden of proof to establish the defense is upon him. N. I. L. § 28; 8 Cyc. 225; Zimbleman & Otis v. Finnegan, 141 Iowa, 358, 118 N. W. 312 (N. I. L.); Star Mills v. Bailey, 140 Ky. 194, 130 S. W. 1077, 140 Am. St. Rep. 370 (N. I. L.); Home Building & Loan Ass'n of Joplin v. Barrett, 160 Mo. App. 164, 141 S. W. 723 (N. I. L.); Nicholson v. Neary (Wash.) 137 Pac. 492 (N. I. L.); Vaughan v. Bass (Ala.) 64 South. 543 (N. I. L.). Contra: Bringman v. Von Glahn, 71 App. Div. 537, 75 N. Y. Supp. 845 (N. I. L.), semble; Lombard v. Bryne, 194 Mass. 236, 80 N. E. 489 (N. I. L.), semble; Ginn v. Dolan, 81 Ohio St. 121, 90 N. E. 141, 135 Am. St. Rep. 761, 18 Ann. Cas. 204 (N. I. L.); Richards v. Shaw, 77 N. J. Eq. 399, 77 Atl. 618 (N. I. L.), semble; Cawthorpe v. Clark, 173 Mich. 267, 138 N. W. 1075 (N. I. L.). See Brannan, Anno. N. I. L. (2d Ed.) p. 31, for a criticism of the first three cases cited as contra. The burden of proof to establish a failure of consideration is upon the defendant. N. I. L. § 28; 8 Cyc. 225; Lynds v. Van Valkenburg, 77 Kan. 24, 93 Pac. 615 (N. I. L.); Ginn v. Dolan, 81 Ohio St. 121, 90 N. E. 141, 135 Am. St. Rep. 761, 18 Ann. Cas. 204 (N. I. L.) semble; Columbian Conservatory of Music v. Dickenson, 158 N. C. 207, 73 S. E. 990 (N. I. L.).

27 N. I. L. § 85.

notes as well as the foreign bills to which at first the custom was only applied. It extends under the common-law rules to all negotiable bills of exchange or notes,28 except those wherein the instrument is made payable on demand,29 or without specification of time, in which case on demand without grace is understood, or wherein grace is expressly waived. These common-law provisions are very generally modified by the statutes of various states. In some states, too, promissory notes are not entitled to grace. The doctrine is that they, not being negotiable in themselves, but being made so by statute, are not placed upon the footing of bills of exchange, unless the statute expressly gives them all the privileges of negotiability. But where the statute does place notes on the footing of bills of exchange, then grace follows as a matter of course. For the same reason non-negotiable instruments, unless by statute placed on the footing of negotiable instruments, are not entitled to grace.30

The number of days allowed as grace is generally three,31 and is computed by adding them to the days, or

28 In the case of Oridge v. Sherborne, which was an action on a promissory note payable in installments, it was held that the maker was entitled to the usual days of grace as each installment fell due. 11 Mees. & W. 374. And see Perkins v. President, etc., of Franklin Bank, 21 Pick. (Mass.) 483; Mechanics' Bank at Baltimore v. Merchants' Bank at Boston, 6 Metc. (Mass.) 13; Wood v. Corl, 4 Metc. (Mass.) 203. As to notes payable in installments, see Coffin v. Loring, 5 Allen (Mass.) 153. Checks are not entitled to days of grace. Andrew v. Blachly, 11 Ohio St. 89; Johns. Cas. Bills & N. 50. 29 HART v. SMITH, 15 Ala. 807, 50 Am. Dec. 161, Moore Cases Bills and Notes, 227; Trask v. Martin, 1 E. D. Smith (N. Y.) 505; Sommerville v. Williams, 1 Stew. (Ala.) 484.

30 Under the statute of 3 & 4 Anne, notes payable to a particular person, without "order," have been held entitled to grace. SMITH v. KENDALL, 6 Term R. 123, Moore Cases Bills and Notes, 4; Duncan v. Maryland Savings Institution, 10 Gill & J. (Md.) 299; Cox v. Reinhardt, 41 Tex. 591; Dubuys v. Farmer, 22 La. Ann. 478. Luce v. Shoff, 70 Ind. 152, contra. See Rand. Com. Paper, § 1057.

31 Daniel, Neg. Inst. § 622. Demand of payment on negotiable bills and notes cannot be legally made until the third day of grace. Griffin v. Goff, 12 Johns. (N. Y.) 423, Johns. Cas. Bills & N. 49. In the case of Lenox v. Roberts it was held that demand should be made on the third day, and notice of the maker's default be posted in time

32

months reckoned as calendar months, stipulated in the instrument. The day of date is excluded from the calculation and the day of payment included.33 This computation by months does not take into account the varying length of the month. The time reckoned in months may be longer or shorter, according as there are more or less days in the month. It also does not take into account the fact that the last day of grace happens upon a non-business day. In this last event, though in case of all non-commercial instruments the time which must expire before suit can be brought against the debtor is extended to the next succeeding business day, yet with negotiable instruments,

34

to go by the mail of the day after. Lenox v. Roberts, 2 Wheat. (U. S.) 373, 4 L. Ed. 264; Bank of Alexandria v. Swann, 9 Pet. (U. S.) 33, 9 L. Ed. 40.

32 Thomas v. Shoemaker, 6 Watts & S. 179; McMurchy v. Robin.son, 10 Ohio, 496.

33 Roehner v. Knickerbocker Life Ins. Co., 63 N. Y. 160; Bellasis v. Hester, 1 Ld. Raym. 280; Campbell v. French, 6 Term R. 212; President, etc., of Hartford Bank v. Barry, 17 Mass. 94; Ripley v. Greenleaf, 2 Vt. 129; Avery v. Stewart, 2 Conn. 69, 7 Am. Dec. 240, Johns. Cas. Bills & N. 57; Henry v. Jones, 8 Mass. 453; Pearson v. Stoddard, 9 Gray (Mass.) 199; Wentworth v. Clap, 11 Mass. 87, note. See N. I. L. § 86.

*

34 Salter v. Burt, 20 Wend. (N. Y.) 205, 32 Am. Dec. 530. In this case a postdated check was payable on the day of its date, without days of grace. As it fell due on Sunday, the question arose as to whether payment should be made on the previous Saturday or the Monday following. The following is a portion of the court's opinion: "When there are no days of grace, and the time for payment or performance specified * falls on Sunday, the debtor may, I think, discharge his obligation on the following Monday." A bill or note falling due on Sunday, without days of grace, is payable on the following day. Hirshfield v. Ft. Worth Nat. Bank, 83 Tex. 452, 18 S. W. 743, 15 L. R. A. 639, 29 Am. St. Rep. 660; Id., Johns. Cas. Bills & N. 53; Barrett v. Allen, 10 Ohio, 426; Avery v. Stewart, 2 Conn. 69, 7 Am. Dec. 240. N. I. L. § 85, which abolishes days of grace (see note 37, infra) by enacting that a bill or note is "payable at the time fixed therein without grace," provides: "When the day of maturity falls upon Sunday, or a holiday, the instrument is payable on the next succeeding business day. Instruments falling due on Saturday are to be presented for payment on the next succeeding business day, except that instruments payable on demand may, at the option of the holder, be presented for payment before 12 o'clock noon on

under the common law, grace is not extended in this way. With them the days of grace end on the next preceding business day, because the debtor cannot compel the creditor to extend the indulgence which a custom of doubtful advantage has already attached to the paper. This rule has been wisely modified by the statutes of many jurisdictions, where the day of payment has been declared to be the next succeeding secular or business day. But, in the absence of any express statute, it is generally understood that the common-law rule would prevail. It is to be observed that by the Negotiable Instruments Law days of grace have been abolished.37

Note on Collateral Agreements in Writing

I. ON THE BILL OR NOTE ITSELF "Marginal Memoranda."—Several promises to do several acts integrated in a connected piece of writing evidence one contract; i. e., form the content of a single obligation. Thus: "I promise to pay A. or order $100.00 on January 1, 1914. I promise to deliver him or his order 100 bushels of wheat. (Signed) B."-evidences the single contract of the promisor (B) to perform two acts. Since the promisor is obligated to perform two acts, one of which is not the payment of money, the writing is not a note (supra, p. 69). Similarly, a sentence in the form of a negotiable promissory note, written as the concluding sentence of an order for goods, whereby the customer promises to pay the person to whom the order is directed the price of the goods ordered, is only one part of the document, which as a whole may be interpreted to be not a note, but a conditional promise to pay upon the delivery of the goods.

Saturday when that entire day is not a holiday." See also N. I. L. 194. For a statement of the manner in which these sentences have been modified in several states, see Brannan, Anno. N. I. L. (2d Ed.) pp. 98, 99. See, also, Professor Samuel Williston's discussion of the last sentence printed in 23 Harv. L. Rev. 603.

35 Bussard v. Levering, 6 Wheat. (U. S.) 121, 5 L. Ed. 215; Reed v. Wilson, 41 N. J. Law, 29; Kuntz v. Tempel, 48 Mo. 71; Farnum v. Fowle, 12 Mass. 89, 7 Am. Dec. 35; Barker v. Parker, 6 Pick. (Mass.) 80; President, etc., of City Bank v. Cutter, 3 Pick. (Mass.)

414.

36 Rev. St. N. Y. pp. 2506, 2507.

37 N. I. L. § 85; Demelman v. Brazier, 193 Mass. 588, 79 N. E. 812 (N. I. L.); Dunbar v. Commercial Electrical Supply Co., 32 Okl. 634, 123 Pac. 417. N. I. L. § 85, has been amended in some states so as to continue the allowance of days of grace on sight bills. See Brannan, Anno. N. I. L. (2d Ed.) p. 98.