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an offence was committed in Connecticut; and that, in either aspect, the District Court of the United States for the District of Connecticut had jurisdiction of the charge against the petitioner. Whether he might have been indicted in New York is a question not presented by this appeal.
ERROR TO THE CIRCUIT COURT OF THE
WESTERN DISTRICT OF WISCONSIN.
No. 64. Argued November 4, 5, 1889. — Decided May 19, 1890.
The maker executed in the State of Illinois and delivered to the promisee a
series of notes, one of which was acquired by a bona fide endorsee, and was as follows: “ $5000. Chicago, Ill., January 20, A.D. 1884. For value received, four months after date, the Chicago Railway Equipment Company promise to pay to the order of the Northwestern Manufacturing and Car Company of Stillwater, Minnesota, five thousand dollars, at First Nat. Bank of Chicago, Illinois, with interest thereon, at the rate of — per cent per annum, from date until paid. This note is one of a series of twenty-five notes, of even date herewith, of the sum of five thousand dollars each, and shall become due and payable to the holder on the failure of the maker to pay the principal and interest of any one of the notes of said series, and all of said notes are given for the purchase price of two hundred and fifty railway freight cars manufactured by the payee hereof and sold by said payee to the maker hereof, which cars are numbered from 13,000 to 13,249, inclusive, and marked on the side thereof with the words and letters Blue Line C. & E. I. R. R. Co.; and it is agreed by the maker hereof that the title to said cars shall remain in the said payee until all the notes of said series, both principal and interest, are fully paid, all of said notes being equally and ratably secured on said
No. 1. Geo. B. Burrows, Vice-President. Countersigned by E. D. Buffington, Treas."; Held: (1) That this was a negotiable promissory note according to the statute
of Illinois, where it was made, as well as by the general mercan
tile law; (2) That its negotiability was not affected by the fact that the title to
the cars for which it was given remained in the vendor until all the notes of the same series were fully paid, the title being so
Statement of the Case.
retained only by way of security for the payment of the notes, and the agreement for the retention for that purpose being a short
form of chattel-mortgage; (3) That its negotiability was not affected by the fact that it might, at
the option of the holder, and by reason of the default of the
maker, become due at a date earlier than that fixed. MR. JUSTICE HARLan, in the opinion of the court, stated the case as follows:
This action was brought by the Merchants' National Bank of Chicago against the Chicago Railway Equipment Company, a corporation of Wisconsin, upon two written instruments, one of which is in the words and figures following: “$5,000.
Chicago, Ill., January 20, A.D. 1884. “For value received, four months after date, the Chicago Railway Equipment Company promise to pay to the order of the Northwestern Manufacturing and Car Company of Stillwater, Minnesota, five thousand dollars at First National Bank of Chicago, Illinois, with interest thereon at the rato of — per cent per annum from date until paid.
“ This note is one of a series of twenty-five notes, of even date herewith, of the sum of five thousand dollars each, and shall become due and payable to the holder on the failure of the maker to pay the principal and interest of any one of the notes of said series, and all of said notes are given for the purchase price of two hundred and fifty railway freight cars manufactured by the payee hereof and sold by said payee to the maker hereof, which cars are numbered from 13,000 to 13,249 inclusive, and marked on the side thereof with the words and letters Blue Line C. & E. I. R. R. Co.; and it is agreed by the maker hereof that the title to said cars shall remain in the said payee until all the notes of said series, both principal and interest, are fully paid, all of said notes being equally and ratably secured on said cars. “No. 1.
Geo. B. BURROWS, Vice-President.” Countersigned by E. D. Buffington, Treasurer.” This writing is endorsed : “Northwestern Manufacturing and Car Co., per J. C. Gorman, Treas."
Argument for Plaintiff in Error.
The other instrument bears the same date, and is in all respects similar to the first one. No question is made as to the genuineness of the signatures to these instruments of the vice-president and treasurer of the defendant, nor as to the plaintiff having paid value for them before maturity. They were declared upon as negotiable promissory notes. In support of the defence certain evidence was offered that was excluded, and the jury pursuant to the direction of the court returned a verdict in favor of the plaintiff for the full amount of the two instruments. 25 Fed. Rep. 809.
Mr. Greenleaf Clark for plaintiff in error.
The issue is a simple one, the defendant in error claiming that they are negotiable promissory notes, the plaintiff in error that they are not.
The requisites of a negotiable promissory note are few and simple. There must be an absolute unconditional promise in writing to pay a specified sum at a definite time therein limited. Nunez v. Dautel, 19 Wall. 560; Cayuga Co. Bank v. Purdy, 56 Michigan, 6.
The time of payment of each of the instruments is by the terms thereof so indefinite, uncertain and contingent, as to destroy the negotiable character thåt might otherwise attach thereto.
Each of the instruments in question is an entirety, and to ascertain its character and what is represented by it, resort must be had to all the terms and conditions therein contained,
the promise to pay a certain sum four months after date is in each instance to be taken in connection with and as modified and changed by what follows. The promise to pay, in four months from date, is subject at all times to the contingency that no default occurs as to either of the other twentyfour notes of the series, the terms and conditions of which do not appear from the instrument in question.
The first case in which the principle that the time of payment should be definite and ascertainable from the instrument itself was Andrews v. Franklin, (1717) 1 Strange, 24. This
Argument for Plaintiff in Error.
was followed by Evans v. Underwood, 1 Wilson, 262. These cases would not now be considered law. Weidler v. Kauffman, 14 Ohio, 455, 460.
Colehan v. Cook, (1743,) Willes, 393, followed these cases. On the authority of Andrews v. Franklin, it was there held that a note payable ten days after the death of the maker's father was negotiable. The authority of this case is seriously impeached, if not overthrown, by Alexander v. Thomas, 16 Q. B. 333.
It obtained, however, a foothold in this country through Cota v. Buck, 7 Met. 588, which has been since overruled. See Way v. Smith, 111 Mass. 523; Stultz v. Silva, 119 Mass. 137; Mahoney v. Fitzpatrick, 133 Mass. 151. Some of the cases in which it was followed were Ernst v. Steckman, 74 Penn. St. 13; and Walker v. Woollen, 54 Indiana, 164. See Charlton v. Reed, 61 Iowa, 166; Cisne v. Chidester, 85 Illinois, 523.
Another class of cases which will doubtless be urged as holding a doctrine adverse to that we here contend for, is those holding notes payable "on or before” a day named to be negotiable. To this class belong Jordan v. Tate, 19 Ohio St. 586; Mattison v. Marks, 31 Michigan, 421.
There is also a series of decisions with reference to notes payable in instalments, with a proviso that the entire amount shall become due on failure to pay any one. The leading case is Oridge v. Sherborne, 11 M. & W. 374. It was followed by Carlon v. Kenealy, 12 M. & W. 139, in which the court held itself bound by Oridge v. Sherborne. If Carlon v. Kenealy shall be considered to rest alone on the authority of Oridge v. Sherborne, it can have but little weight; if it be considered as standing alone its weight as an authority of principle is materially lessened by Pollock, C. B., in Miller v. Biddle, in 1865, an action upon a note like the one in question in Carlon v. Kenealy.
Opposed to the theory, however, that instruments promising to pay a definite sum of money at a specified time when coupled with an agreement that they may or shall become due upon the happening of some uncertain event before the
Argument for Plaintiff in Error.
date mentioned are negotiable, are many well considered authorities, all of which enunciate the principle that such additional agreement operates to make the time when payment will become due so indefinite and uncertain as to nullify the otherwise negotiable character of the paper, reducing it to a mere chose in action assignable only subject to equities between the original parties.
Hubbard v. Mosely, 11 Gray, 170; Way v. Smith, 111 Mass. 523; Stultz v. Silva, 119 Mass. 137; Mahoney v. Fitzpatrick, 133 Mass. 151; Brooks v. Hargreaves, 21 Michigan, 254; First National Bank v. Carson, 60 Michigan, 432; Bank of New Windsor v. Bynum, S4 No. Car. 24; Chouteau v. Allen, 70 Missouri, 290, 339. See also, having bearing on the subject: Lamb v. Story, 45 Michigan, 488; Smith v. Van Blarcom, 45 Michigan, 371; Nunez v. Dautel, 19 Wall. 561; Smith v. Marland, 59 Iowa, 615; Cayuga Co. Bank v. Purdy, 56 Michigan, 6.
The instruments in question were not negotiable promissory notes, but merely executory agreements evidencing the terms and conditions of a conditional sale of personal property, as such assignable, but not negotiable in the commercial
It is a cardinal principle in the law of negotiable paper needing no authorities in its support that bills and notes must be for the payment of money absolutely at the time specified, and with nothing upon the face of the paper that expressly or by implication will alter or modify this absolute obligation; and if the instrument, though otherwise a good promissory note or bill of exchange, does contain any such matter, the additional provisions will destroy the negotiable character that might otherwise attach to the instrument and reduce it to the level of an ordinary agreement.
So, too, if a note contains any stipulation or provision creating any obligation, duty or right on the part of either party aside from the simple obligation to pay a fixed sum at a certain time on the one part, and the right to receive it on the other, its negotiability will be thereby destroyed, and its character changed from that of a note to a mere agreement.