8. Delivery. The last step necessary to put a negotiable instrument in circulation, or to make it effective, is to deliver it; and until this is done it has no validity. As long as the paper is in the hands of an agent, it may be recalled. The same is true of a paper still in the hands of postal authorities, for they are held to be agents of the maker.

If an instrument is delivered in trust to a third party to be delivered subject to a condition, it is called an escrow. Until the condition is complied with, no legal delivery has been made as between the original parties; but if title is acquired by a subsequent party in good faith, a complete delivery has been made. If a blank instrument properly signed is issued with authority to fill out, no further delivery is necessary. The holder may fill out the blank, even increasing the amount, and put the paper in circulation and the maker is bound to pay.

165. Some Non-Essentials. 1. Date. The date is not necessary; it should be given, however; otherwise recourse must be had to parol evidence to fix the date, as the maturity of paper is in most cases determined by the date of the instrument. Papers may be post-dated as well as ante-dated. The presumption, however, is that the date of the instrument is the date of delivery.

2. Value Received. This term is not an essential to negotiable instruments, but is generally used. It originated with the introduction of notes, a creature of the common law. The term has not been eliminated, although notes were by English statute made to possess the elements of negotiability, thereby carrying presumption of consideration.

3. Days of Grace. Grace is an extension of three days to the payer in which to make payment. It is an element of the law merchant, but it is not necessary, since by contract it may be excluded. Many of the states have by statute abolished days of grace. Originally, demand was made on the last day of the contract, the payer being allowed extra time, called grace, if necessary. In time this was always demanded, and the time of making the demand changed to the last day of grace. If the last day of

grace is a Sunday or a holiday, the demand should be made a day earlier. When grace is not allowed, and the paper falls due on Sunday or a legal holiday, the demand is made on the first day following a Sunday or legal holiday; also since Saturday is, in banking, generally a half holiday, paper maturing on that day is carried over to the next succeeding business day, except that instruments payable on demand may, at the option of the holder, be presented for payment before twelve o'clock noon on Saturday when that entire day is not a holiday.

166. Liability. Parties to negotiable instruments are classed as original and subsequent. The first are those who were parties to the original contract, and the second are those who afterward acquired a title. Liability is classified as absolute, or primary, and as conditional, or secondary. Absolute liability admits of no uncertainty; it is such liability as that assumed by the maker of a note or accepter of a draft who, in substance, says, "I will pay." Conditional liability depends on some condition and is clothed in effect as follows: "If A does not pay, I will." This the undertaking of a drawer of a check, or draft, or the indorser of any negotiable instrument.

167. QUESTIONS

What are the elements of negotiable paper? Explain each of the following: In writing, absolute promise, certainty of time, certainty of amount, payable in money, specification of parties, negotiable words, delivery, delivery in escrow.

Is a note legal when written with a pencil? Name and explain the non-essentials. Classify the liability of parties to negotiable paper.

A note reads payable to A on his marriage. Is it negotiable? Why? A note reads payable on the death of a certain person, is it negotiable? Why? A note reads payable out of a certain fund. Is it negotiable? Give your reasons. If the payment is chargeable to a particular fund or account? What is the difference between making a note payable out of a particular fund or charging the payment to a particular account or fund?

1. In K v. H, 13 Ill. 604, the latter sued the former on the following statement:

"Castleton, April 27, 1844.

Due Henry D. Kelley' fifty-three dollars when he is twenty-one years old with interest. David Kelley."

On the back was this indorsement:

"Rockton, May the 21st, 1848. Signed the within, payable to Moses Hemingway.

Henry Kelley."

It was proved that the payee became of age in August, 1849. If the terms of an instrument leave it uncertain whether the money will ever become payable, it can not be considered a promissory note. A promise in writing to pay a sum of money when a person shall marry, or when a ship shall return, is not a promissory note, since it is not certain that the person will ever marry, or that the ship will ever return. In all such cases the promise is to pay on a contingency that may never happen. So in this case Henry D. Kelley, the payee, might never reach twenty-one years of age. The fact that he did makes no difference. The contingency was not sure to happen, and therefore the instrument in its origin lacked one of the essential elements of a promissory note, and consequently was not negotiable. The plaintiff did not have legal title to the instrument. The suit should have been brought in the name of the payee. The time when a note or bill is to be paid must be certain.

2. In the case of H v. P, the plaintiffs sued as assignees on a promissory note, "payable at New York, in New York funds, or their equivalent." The court said: "Whether it meant the funds of the State generally, or of the city of New York is not clear. The face of the note is indefinite, is susceptible of different interpretations, and for this reason it cannot be considered a negotiable instrument within the statute.”

It is not a note, in the language of the decisions, payable in money. "Funds" may embrace stocks, banknotes, specie, and every description of currency used in commercial transactions. To be a note, it must be an unconditional written promise or order to pay a certain sum of money.

3. In B v. G, 13 Mass. 158, the writing was as follows:

"Boston, 15th May, 1810.

Good for one hundred and twenty-six dollars on demand.

Gilma & Hoyt."

The question here was whether the plaintiff could recover without showing any title to the promise declared upon, or any relation or connection with the debtor, from which a presumption might be drawn that

the promise declared on was made to him. It is not a negotiable promissory note. If it were, and had the name of the promisee on the back, the possession of it would be sufficient prima facie evidence of the plaintiff's title. It is not a note payable to bearer, which would be sufficient evidence of a promise to pay the holder, unless suspicion was thrown upon his title by the maker. It is not, then, any contract known in law which from its own force constitutes a promise to whomsoever shall produce it. The payee must be named or definitely indicated.

4. In B v. the B and D bank, 6 Hill (N. Y.) 443, the indorsement was made with a lead pencil, and in the figures, “1. 2. 8.,” no name being written. Evidence was given that these figures were in Brown's handwriting and that he meant to be bound as an indorser. It was held that a person may become bound by any mark or designation he thinks proper to adopt, provided it be used as a substitute for his name, and he intend to bind himself. Any written emblem whereby a party signifies his intention to be bound will constitute a signature.

5. In D v. E, 34 Me. 96, suit was brought by the indorsee against the makers of a note payable to the Protection Insurance Company or order, for "$271.25, with such additional premium as may arise on policy No. 50, issued at the Calais Agency." The court held that this was a simple contract for an unascertained and indefinite amount and was therefore not negotiable. It was also held that the plaintiff could not, by abandoning the indefinite portion, thereby render an instrument negotiable, which, in its origin, was non-negotiable. The sum to be paid must be fixed and certain.

6. In the case of S v. S, 28 N. H. 419, the instrument in question was as follows:

"Strathom, March 28, 1846. Due to Sophie Gordon, widow, ten thousand dollars, to be paid as wanted for her support. If no part is wanted, it is not to be paid. Stephen Scammore."

The court held that the foregoing writing had none of the qualities of a promissory note; that it was an admission of a special agreement to pay Mrs. Gordon such sum as should be wanted for her support, to the amount of $10,000. It was not evidence of any debt to any amount, since if no part of the money was wanted for her support, no part of it was to be paid. It was merely contingent whether anything would be payable. Every note must contain a specific promise expressed or implied.

169. Introduction. This is one of the early forms of negotiable paper, made so by statute. By reading the note one sees that it is an absolute promise to pay.

170. Definition. A note is written evidence of a debt, coupled with an unqualified promise to pay.

In the first illustration J. P. Shaw is maker of the note and Jno. E. Groves is payee. It is not an interest-bearing contract, but will begin to draw the legal rate at maturity, if not paid at that time. It is the duty of Shaw to tender payment to the holder, but the holder may demand payment at the maker's place of business. Groves, the payee, may sell and transfer his interest in the agreement by writing his name on the back of the paper. It is a