Promissory Note

A written promise to pay a certain sum of money, at a future time, unconditionally. Brenzer y.

Wightman, 7 W. & S. (Pa.) 264; Kimball v. Huntington, 10 Wend. (N. Y.) 675, 25 Am. Dec. 590; Franklin v. March, 6 N. H. 364, 25 Am. Dec. 462; Brooks v. Owen, 112 Mo. 251, 19 S. W. 723, 20 S. W. 492.

An unconditional written promise, signed by the maker, to pay absolutely and at all events, a sum certain in money, either to the bearer or to a person therein designated or his order.

Benj. Chaim. Bills § 271.

By the Negotiable Instruments Act it is an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand or at a fixed or determinable future time, a sum certain in money to order to bearer. A promissory note differs from a mere acknowledgment of a debt without any promise to pay, as when the debtor gives his creditor an I O U. See 15 M. & W. 23. But see Cummings v. Freeman, 2 Humphr. (Tenn.) at a time therein expressed, a sum of money to a certain person therein named or to his i order, for value received. It is dated and signed by the maker. It is never under seal; Merritt v. Cole, 9 Hun (N. Y.) 98; even when made by a corporation; Steele v. Mfg. Co., 15 Wend. (N. Y.) 205. But in L. R. 3 Ch. Ap. 758, it was held that a “debenture” under a corporate seal was provable against the company by the indorsee, free from equities between the payee and the corporation, find, semble, that it was a promissory note. In Mackay v. Church, 15 R. I. 121, 23 Atl. 108, 2 Am. St. Rep. 881, it was held that a paper seal of a corporation on an instrument in the form of a promissory note should be regarded as “mere excess.” No particular form of words is necessary; but there must be an intention to make a note; see 15 M. & W. 29; Benj. Chaim. Bills 274; and it should amount in legal effect to an absolute promise to pay money; Strickland v. Holbrooke, 75 Cal. 208, 17 Pac. 204. By the Negotiable Instruments Act, the negotiability of an instrument is not affected by the fact that it is not dated or bears a seal or it does not specify the value given. He who makes this promise is called the maker, and he to whom it is made is the payee; 3 Kent 40. A writing in the form of a note payable to the maker’s order, becomes a note by indorsement; Miller v. Weeks, 22 Pa. 89. A note payable to the maker’s order, and indorsed by him in blank, is, in legal effect, a note payable to bearer and is transferable by delivery; Jones v. Shapera, 57 Fed. 457, 6 C. C. A. 423. Although a promissory note in its original shape bears no resemblance to a bill of exchange, yet when indorsed it is exactly similar to one; for then it is an order by the indorser of the note upon the maker to pay the indorsee. The indorser is as it were the drawer; the maker, the acceptor; and the indorsee, the payee; 4 Burr. 669; 4 Term 148; 3 Burr. 1224. Most of the rules applicable to bills of exchange equally affect promissory notes. There are two principal qualities essential to the validity of a note: first, that it be payable at all events, and not dependent on any contingency; Cushman v. Haynes, 20 Pick. (Mass.) 132; nor payable out of any particular fund; Stamps v. Graves, 11 N. C. 102; U. S. v. Bank, 5 How. (U. S.) 382. By the Negotiable Instruments Act the promise or order to pay must be unconditional and such promise is unconditional, though there Is an indication of a particular fund out of which reimbursement is to be made, or a statement of the transaction which gives rise to the instrument. But an order or promise to pay out of a particular fund is not unmick v. Trotter, 10 S. & R, (Pa.) 94; Klauber v. Biggerstaff, 47 Wls. 551, 3 N. W. 357, 32 Am. Rep. 773; Black v. Ward, 27 Mich. 191, 15 Am. Rep. 162; Collins v. Lincoln, 11 Vt. 268 (though statutes in some states have made notes payable in merchandise negotiable); that is, in whatever is legal tender at the place of payment; 2 Ames, Bills 828; and not in bank-notes; though it has b$en held differently; Judah v. Harris, 19 Johns. (N. Y.) 144. The rule on this subject is said to be more strict in England than here, but to have been relaxed there in 2 Q. B. Div. 194. It is said that the tendency here is to use the term money in a very wide sense; Benj, Chaim. Bills, 2d Am. ed.

10.

By the Negotiable Instruments Act, the instrument must be payable in money and it is immaterial that a particular kind of current money is designated. A promissory note payable to order or bearer passes by indorsement, and although a chose in action, the holder may bring suit on it in his own name. Although a simple contract, a sufficient consideration is implied from the nature of the instrument.

See 5 Com. Dig. 133, n., 151, 472; 4 B. & C. 235; 1 C. & M. 16.

It has been urged that, upon principle, negotiable instruments are contracts binding by their own force, and therefore not requiring any consideration; Langd. Contr. § 49. When the back of a note is covered by various indorsements, an assignment of the note, written on a piece of paper pasted to the note, will pass the legal title. By the Negotiable Instruments Act, one who puts his name on the back of an ipstrument prior to or at the time of delivery becomes an endorser; Rocktield v. Bank, 77 Ohio, 311, 83 N. E. 392, 14 L. R. A. (N. S.) S42; Deahy v. Choquet, 28 R. I. 338, 67 Atl. 421, 14 L. R. A. (N. S.) 847. See Indorsement; Allonge. A negotiable instrument payable to bearer, by custom of trade, passes from hftnd to hand by delivery, and the holder for the time being, if he is a bona fide holder for value without notice, has a good title, notwithstanding any defect in title in the person from whom he took it; flSOl] 1 Ch. 270. As to whether a stipulation in an instrument, otherwise in the form of a promissory note, for the payment of an attorney’s fee for the collection of the note in case of dishonor renders the instrument non-negotiable, see Bills of Exchange. A promissory note on the face of which, across one end, is written an agreement that the note will be renewed at maturity, is not negotiable; Citizens N. Bk. v. Piollet, 126 Pa. 194, 17 Atl. 603, 4 L. R. A. 190, 12 Am. St. Rep. 860; nor is one indorsed “with- A promissory note does not discharge the debt for which it Is given unless such be the agreement of the parties; it only operates to extend the period for the payment of the debt; Segrist v. Crabtree, 131 U. S. 287, 9 Sup. Ct. G87, 33 L. Ed. 125.