(a) Collateral notes are often non-negotiable because of some provision therein in regard to the time of payment, or because of provisions requiring something to be done in addition to the payment of money. But a statement that collateral security has been deposited for the performance of the promise contained in the note is a recital only which does not affect its negotiability. Wise v. Charlton, 4 A. & E. 486; Fancourt v. Thorne, 9 Q. B. 312. And a provision merely authorizing the sale of the collateral, if the note be dishonored, does not have this effect. Perry v. Bigelow, 128 Mass. 129; Towne v. Rice, 122 Mass. 67; Biegler v. Merchants' Loan & Trust Co., 62 Ill. App. 560; Arnold v. Rock River Valley Union R. R. Co., 5 Duer, 207. A statement, however, that the note is "given as collateral security with agreement" destroys its negotiable character. Costello v. Crowell, 127 Mass. 293.

(b) This provision was inserted in the act to meet the requirements in some of the States where judgment notes are in use. Such notes are not known in New York. In Pennsylvania it was held that the warrant of attorney rendered the note non-negotiable. Overton v. Tyler, 3 Pa. St. 346; Sweeney v. Thickstum, 77 Pa. St. 131.

(c) In some of the States it is a common practice to insert in promissory notes a waiver of the benefits of homestead and exemption laws; and this provision of the act is designed to meet such See Zimmerman v. Anderson, 67 Pa. St. 421; Zimmerman v. Rote, 75 Pa. St. 188.

cases.

(d) An illustration of this case is the right of the holder to elect to take stock of a corporation in lieu of payment in money. Hodges v. Shuler, 22 N. Y. 114. As the obligation of the maker is to pay in money, and as the payment in stock is not optional with him, the note is not within the rule that a negotiable instrument must not be payable in the alternative.-Id.

(e) The object of this provision is to prevent any inference of an intent to validate any agreement or stipulation mentioned in the section, where, by any statute or settled policy of the State, the same would be illegal. In the Wisconsin Act the following words are added: " or authorize the waiver of exemptions from execution."

§ 25. Omissions; seal; particular money.-The validity and negotiable character of an instrument are not affected by the fact that:

I. It is not dated (a); or

2. Does not specify the value given, or that any value has been given therefor (b); or

3. Does not specify the place where it is drawn or the place where it is payable (c); or

4. Bears a seal (d); or

5. Designates a particular kind of current money in which payment is to be made (e).

But nothing in this section shall alter or repeal any statute requiring in certain cases the nature of the consideration to be stated in the instrument (f).

(a) See section 36, which provides that "where the instrument is not dated, it will be considered to be dated as of the time it was issued." As between the immediate parties parol evidence is admissible to show the true date of a misdated note. Bigge v. Piper, 86 Tenn. 589.

(b) The words "value received" are not necessary. Daniel on Negotiable Instruments, § 108. Formerly in Connecticut a promissory note, not purporting on its face to be for value received did not import a consideration. Edgerton v. Edgerton, 8 Conn. 6; Bristol v. Warner, 19 Conn. 7.

(c) See sections 22, 54, 137.

(d) In two late cases in the Court of Appeals of New York it was held that the commercial paper of a corporation does not lose the quality of negotiability by having attached thereto the corporate seal. Chase Nat. Bank v. Faurot, 149 N. Y. 532; Weeks v. Esler, 143 N. Y. 374. See also Mackay v. St. Mary's Church, 15 R. I. 121. The same rule has been applied to municipal bonds under seal. Bank of Rome v. Village of Rome, 19 N. Y. 20; Mercer County v. IIacket, 1 Wall. 83. And to the bonds of private corporations. Brainerd v. N. Y. & H. R. R. Co., 25 N. Y. 496. So it has been held that the negotiability of a United States treasury note is not restrained or affected by the fact that it is under the treasury seal. Dinsmore v. Duncan, 57 N. Y. 573. In Mercer County v. Hacket, supra, it was said by Justice Geier, speaking of bonds issued under seal: "But there is nothing immoral or contrary to good policy in making them negotiable if the necessities of commerce require that they should be so. A 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." See also Mason v. Frick, 105 Pa. St. 162 and cases cited; Morris Canal, etc., Co. v. Fisher, 9 N. J. Eq. 699; National Exchange Bank v. Hartford, P. & F. R. Co., 8 R. I. 375; Jackson v. Myers, 43 Md. 452; Muth v. Dolfield, 43 Md. 466. Contra, Osborne v. Hubbard, 20 Oregon 318. The rule adopted in the act existed by statute in the following States: Colorado, Florida, Georgia, Illinois, Kansas, Massachusetts, Nebraska, North Carolina, Ohio, and Tennessee.

(e) Thus, a note payable in gold coin is negotiable. Chrysler v. Griswold, 43 N. Y. 209. So is a note payable "in bank notes current in the city of New York." Keith v. Jones, 9 Johns. 120. A note payable "in New York State bills or specie." Judah v. Harris, 19 Johns. 144. And a note payable "in current Florida funds." Williams v. Moseley, 2 Fla. 304. But see Wright v. Hart's Admr., 44 Pa. St. 454, where it was held that a note payable" in current funds at Pittsburgh" was not negotiable. See also Ford v. Mitchell, 15 Wis. 304; Platt v. The Sauk County Bank, 17 Wis. 222; Lindsey v. McClelland, 18 Wis. 481; Klauber v. Biggerstoff, 47 Wis. 551.

(f) In a number of the States it is required that notes given in payment of patent rights shall have written on the face thereof given for a patent right." So there are statutes requiring that what are known as "Bohemian oats" notes shall state the nature of the consideration for which they were given. The above provision is intended to prevent any repeal of such statutes. The New York statutes on the subject have been incorporated into the act. See sections 330, 331.

§ 26. When payable on demand.-An instrument is payable on demand:

I. Where it is expressed to be payable on demand, or at sight (a), or on presentation; or

2. In which no time for payment is expressed (b). Where an instrument is issued, accepted or indorsed when overdue, it is, as regards the person so issuing, accepting or indorsing it, payable on demand (c).

(a) By the law merchant there are some distinctions between instruments payable on demand and those payable at sight; as, for example, in the matter of days of grace. See Daniel on Negotiable

Instruments, §§ 617-619, and authorities there cited. This was also the effect of former statutes in some of the States. Walsh v. Dart, 12 Wis. 635. The new statute abolishes all these distinctions. (b) Messmore v. Morrison, 172 Pa. St. 300; Hall v. Toby, 110 Pa. St. 318; James v. Brown, 11 Ohio St. 601; Holmes v. West, 17 Cal. 623; Porter v. Porter, 51 Me. 376; Keyes v. Feustomaher, 24 Cal. 329; Bank v. Price, 52 Iowa 530; Libby v. Mekelborg, 28 Minn. 38; Roberts v. Snow, 28 Neb. 425; Bacon v. Page, 1 Conn. 405; Raymond v. Sellick, 10 Conn. 485; Dodd v. Denny, 6 Oregon 156. And the legal intendment that the instrument is payable on demand cannot be changed by parol proof. Roberts v. Snow, 28 Neb. 425; Thompson v. Ketcham, 8 Johns. 146; Sheldon v. Heaton, 88 Hun, 535; Gaylord v. Van Loan, 15 Wend. 308; McLeod v. Hunter, 29 Misc. 558 (a case arising under the statute); Koehning v. Muemminghoff, 61 Mo. 403; Self v. King, 28 Tex. 552. The words "on demand" may be added without avoiding the instrument. Byles on Bills, 210.

(c) Berry v. Robinson, 9 Johns. 121; Leavitt, v. Putnam, 1 Sandf. 199; Bassonhorst v. Wilby, 45 Ohio St. 336; Light v. Kingsbury, 50 Mo. 331; Smith v. Caro, 9 Oregon 280; Bemis v. McKenzie, 13 Fla. 553. It is commonly said that the indorsement of a bill or note which is overdue is equivalent to drawing a new instrument payable at sight. Bishop v. Dexter, 2 Conn. 419; Mudd v. Harper, 1 Md. 110. In such cases presentment for payment must be made and notice of dishonor given, as in other instances of instruments payable on demand. Berry v. Robinson, 9 Johns. 121; Van Hoosen v. Van Alstyne, 9 Wend. 79; Poole v. Tolleson, 1 McCord, 200; Patterson v. Todd, 18 Pa. St. 420; Rosson v. Carroll, 90 Tenn. 90; Brown v. Hull, 33 Gratt. 23. Where a note, negotiated before due, is further negotiated after it has been dishonored, the holder takes the legal title, and can maintain a suit upon it in his own name, in the same manner as if he had received it before it was due. French v. Jarvis, 29 Conn. 353.

§ 27. When payable to order. The instrument is payable to order where it is drawn payable to the order of a specified person or to him or his order (a). It may be drawn payable to the order of:

1. A payee who is not maker, drawer or drawee; or 2. The drawer or maker (b); or

3. The drawee; or

4. Two or more payees jointly; or

5. One or some of several payees (c); or

6. The holder of an office for the time being (d).

Where the instrument is payable to order the payee must be named or otherwise indicated therein with reasonable certainty (e).

(a) By the rules of the law merchant an instrument payable to a specified person without the addition of the word "order," or other word of similar import, was not negotiable. Byles on Bills, p. 83; Smith v. Kendall, 6 T. R. 123; Maule v. Crawford, 14 Hun, 193; Carnwright v. Gray, 127 N. Y. 92. The English Bills of Exchange Act provides that "a bill is payable to order which is expressed to be so payable, or which is expressed to be payable to a particular person, and does not contain words prohibiting transfer or indicating an intention that it should not be transferable." But this change in the law was not deemed advantageous and was not adopted.

(b) A note payable to the order of the maker is not complete until indorsed by him. Section 320.

(c) Illustration: A draft payable to A, B, and C, or either of them, or any two of them.

(d) For example, a note payable to three persons as trustees of an incorporated association, or their successors in office, is negotiable. Davis v. Gore, 6 N. Y. 124.

If his identity

(e) The payee need not be designated by name. can be ascertained with certainty, it is sufficient. United States v. White, 2 Hill, 59; Blackman v. Lehman, 63 Ala. 547.

§ 28. When payable to bearer.-The instrument is payable to bearer:

I. When it is expressed to be so payable; or

2. When it is payable to a person named therein or bearer (a); or

3. When it is payable to the order of a fictitious or nonexisting person, and such fact was known to the person making it so payable (b); or

4. When the name of the payee does not purport to be the name of any person (c); or