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274. Unconditional promise or order.-The instrument, if a note, must contain a promise, and if a bill of exchange or a check, must contain an order, but in either case, the promise or the order must not be conditioned on any event.

EXAMPLES

287. "Due A. B. or order fifty dollars" is non-negotiable. "I. O. U. fifty dollars" is non-negotiable. These forms contain neither a promise nor an order.

288. "Please pay bearer fifty dollars" is not an unusual form of "order," but "Be so good as to let bearer have fifty dollars" is perhaps too humble to constitute an order.

While an instrument payable out of any particular fund is non-negotiable, an indication that the drawer may seek reimbursement out of a certain fund does not destroy the negotiability of an instrument. Thus: “Mr. A: You will please pay to W. & H. the amount of $2,000, and deduct the same from my share of profits of our partnership," is a mere assignment of so much of the partnership profits. "Pay to the order of W. & H. $2,000 and charge to my account in the partnership," however, is negotiable. An order which must be accompanied by a bank-book is non-negotiable.

275. Sum certain in money.-The order or promise must be to pay money only and the amount must not be indefinite.

EXAMPLES

289. "Give bearer ten shares of common stock" is nonnegotiable.

By money, in respect to the above rule, is meant whatever may be used as legal tender for payment of debts at the place where the bill or note is payable. But the courts in some states have decided that notes or bills payable in "current funds" or

"currency" are negotiable notwithstanding the fact that those terms include more than legal tender.

290. "Pay to the order of A. B. $5,000 in silver dollars of the United States" is negotiable. The negotiable instruments law provides that the validity and negotiable character of an instrument are not affected by the fact that it designates a particular kind of current money in which payment is to be made.

291. "Pay to the order of A. B. $350 and such dividends as may become due on my stock before I return" is not an order for a sum certain.

292. "Pay to X. Y. at Union Bank of London, $500, with exchange" sets forth a sum certain.

293. "Pay to the order of C. D. $75, but $50 if paid by January 1st" is non-negotiable for uncertainty.

294. "I promise to pay to the order of X. Y. $50, or give him at his option 15 barrels of potatoes" is negotiable, for it is held that the maker is bound at all events to pay $50, but the holder may elect to accept potatoes instead.

295. "Pay to the order of A. B. and deliver my bay horse" is non-negotiable.

276. Time of payment.-A negotiable instrument must be payable on demand or at a fixed or determinable future time.

EXAMPLES

296. "Ten days after sight, pay to etc.," "On demand pay to etc.," are payable at a determinable future time.

297. "Pay to order of bearer four years after date, if I am then living" is uncertain.

Where the instrument is payable at or after an event which is sure to happen, but is uncertain as to time, the time is determinable and the instrument is negotiable. Distinguish therefore between the following instruments:

298. "Pay to the order of X. Y. three months after my father's death $50." "Pay to X. Y. $5,000 when he marries

my daughter." The former is good, the latter is not; the father must die but X. Y. may never marry.

299. "Ninety days after the dissolution of our partnership." This event must happen at the death of one of the partners, if not sooner.

300. But where the instrument recites "Ninety days after the dissolution of our partnership and the settling of our books," the books may never be settled and the instrument is to be treated, therefore, as non-negotiable.

277. To whom payable.-A negotiable instrument must be made payable to order or to bearer. The payee may be a fictitious person, in which case the instrument is a bearer instrument. Fictitious names often used are "cash," "labor," "expense account," etc. The payee may be the same person as the maker or drawer, but in such cases the instrument is not issued till after its indorsement and delivery. There may be more than one payee, but an instrument payable to A or B is nonnegotiable unless on its face it shows that one is the agent of the other for collection. A payee indorsing in blank renders the instrument payable to bearer. Should the payee's name be omitted any holder in due course may fill the blank with any name he chooses.

278. Certainty of drawee.-The drawee of a bill of exchange must be mentioned or clearly indicated. "To

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, London, England," is insufficient. "To our agent in San Francisco" indicates the drawee with sufficient clearness.

279. Other provisions sometimes included without affecting negotiability.-Negotiable instruments usually bear a date, and name the place where payment is to be made. They may contain also a statement of the consideration without affecting their negotiability. The true date of an undated instrument is that of issue and

it may be supplied by any holder. A person who becomes a holder in due course may hold prior parties according to the terms of the instrument as it is when it comes into his hands notwithstanding the fact that a wrong date has been filled in. "The negotiable character of an instrument otherwise negotiable is not affected," says the negotiable instruments law, “by a provision which:

"1. Authorizes the sale of collateral securities in case the instrument be not paid at maturity; or

"2. Authorizes a confession of judgment if the instrument be not paid at maturity; or

"3. Waives the benefit of any law intended for the advantage or protection of the obligor."

A note is not rendered non-negotiable by the provision that if it is not paid at maturity the maker agrees to pay costs of collection or the attorney's fee.1

280. Seal.-Besides such other matters the inclusion of which in an instrument destroys its negotiable character the addition of a seal, at common law, had the effect of making an otherwise negotiable contract nonnegotiable. The negotiable instruments law, however, has changed the rule so that at the present time in most jurisdictions the addition of a seal does not destroy the negotiability of an instrument to which it is attached.2

281. Blanks. The person in possession of an instrument lacking in any material particular has prima facie authority to complete it by filling up the blanks. If such person exceeds his authority, or waits an unreasonable time, prior holders are not bound unless the instrument has come to a holder in due course.

1 Mechanics American Nat. Bank v. Colemans, 204 Fed. Rep. 24; R. S. Oglesby Co. v. Bank of New York, 77 S. E. 468 (Va.).

2 143 N. Y. 374.

EXAMPLES

301. A draws a note to C to enable C to pay his debt of $500 to X. The amount is left blank and C fills it in for $750 and gets X to cash it and subtract the amount of the indebtedness. If X was told that C was exceeding his authority, C would have the burden, in an action by X on the note against A, of proving C's authority. But if X had not notice A would be estopped from showing that C had exceeded his authority.

302. Suppose in the above case A had filled out $500 in figures but had left the space for the written amount blank and that C had written in this blank "seven hundred and fifty dollars." The written figures would govern and the right of the parties would be the same except that perhaps the discrepancy ought to lead X to inquire for an explanation before receiving the note.

If a person has been negligent in the drawing of an instrument, only partly filling the blanks, and the amount is raised, a holder in due course can recover up to the original amount only. This is not filling up blanks but amounts to alteration.

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