SECTION 5.-CHARACTER OF THE ORDER OR PROMISE (I) AS TO CONDITIONS JOSSELYN v. LACIER. (Court of King's Bench, 1715. 10 Mod. 294, 317.) This was a writ of error upon a judgment given in the court of common pleas in an action of assumpsit, where the plaintiff declared that Evans drew a bill upon Josselyn, requiring him to pay Lacier seven pounds every month (the first payment to begin in December, about two months after the date of the note) out of the growing subsistence of Evans, and place it to his account; that Lacier carried the note to Josselyn, who accepted it, and promised to pay it, secundum tenorem billæ, by which acceptance, according to the custom of merchants, he became liable; and that afterwards he refused to pay, etc. 18 PARKER, Chief Justice, delivered the opinion of the court. In this case, two points are considerable: First, whether this be a good bill of exchange? We are all of opinion that it is not a bill within the custom of merchants; it concerns neither trade nor credit; it is to be paid out of the growing subsistence of the drawer; if the party die, or his subsistence be taken away, it is not to be paid. It may be never paid, and yet his credit unimpeached. The judgment was reversed. * MACLEED v. SNEE. (Court of King's Bench, 1727. 2 Str. 762.) Error of a judgment in C. B., wherein the plaintiff declares that A. B. drew a bill of exchange dated 25th of May, whereby he requested the defendant one month after date to pay to the plaintiff or order £9. 10s. "as my quarterly half-pay," to be due "from 24th of June to 27th of September next, by advance." And the action is against the defendant upon his acceptance. It was objected that this was no bill of exchange, because it is not to pay in all events, but is left to the pleasure of the person on whom it is drawn, either to advance the money or not; and it was compared to the case of Josselyn v. Lacier, 10 Mod. 294, 317, which was to pay out of his growing subsistence, and to the case of Jenney 18 Arguments of counsel and part of the opinion are omitted. v. Herle, 2 Ld. Raym. 1361, which was payable out of a particular fund, and in both cases held to be no bills of exchange. Sed PER CURIAM. The quarterly half-pay is a certain fund, which the growing subsistence was not; the mention of the half-pay is only by way of direction how he shall reimburse himself, but the money is still to be advanced on the credit of the person. The reason it was held no bill of exchange in Jenney v. Herle was because it was no more than a private order to a man's servant. Judgment affirmed. CARLOS v. FANCOURT. (Court of King's Bench, 1794. 5 Term R. 482.) This was an action upon promises, and was brought in the court of common pleas. The first count of the declaration alleged that the defendant (below) in the life-time of A. Fancourt, the late wife of the plaintiff (below), on the 27th of July, 1786, made and signed his certain note in writing, commonly called a promissory note, and thereby promised to pay to the said A. Fancourt, then being the plaintiff's wife, the sum of £10. "out of his the said defendant's money that should arise from his reversion of £43. when sold," and delivered the said note to the said A. F.; whereby and by reason of which several promises, and by force of the statute in such case made and provided, the said defendant became liable to pay to the said plaintiff the said sum of money in the said note specified, according to the tenor and effect of the said note; and being so liable, the said defendant, in consideration thereof afterwards &c, promised to pay &c, yet that he did not &c. although often requested &c. and although the said reversion of the said £43. was sold before the suing forth of the original writ &c. The declaration contained other counts, for work and labour; money paid; &c. The defendant suffered judgment to go by default; and a general judgment was entered up on the whole declaration. A writ of error was then brought; and the plaintiff in error assigned for error, that there was a general judgment on all the counts in the declaration, the first of which was founded on a supposed promissory note, as a note within the statute made concerning promissory notes, whereas it was not a note within the statute, but a contingent note; and on which, as stated in the declaration, it appeared to be uncertain whether or not the money therein specified would ever become payable, and was therefore void in law; and that it did not appear that the note was given for value received or for any valuable or legal consideration. whatever &c.19 Lord KENYON, C. J. The question in this case is not whether the plaintiff in error, who may have promised for a valuable considera19 Arguments of counsel are omitted. tion to pay to the defendant a certain sum of money on an event, which has since happened, is or is not bound to perform that promise; if this promise were made on a consideration, there is no doubt but that an action might be maintained on it, as on a special agreement: but the question now before the court is whether or not the note set forth upon the record can be declared on as a negotiable security under the statute 3 & 4 Anne, c. 9. The object of that act was to put promissory notes on the same footing with bills of exchange in every respect. Vide Brown v. Harraden, 4 Term R. 148. It would perplex the commercial transactions of mankind, if paper securities of this kind were issued out into the world encumbered with conditions and contingencies, and if the persons to whom they were offered in negotiation were obliged to enquire when these uncertain events would probably be reduced to a certainty. It has been admitted, in the argument, that if this were a bill of exchange the declaration could not be supported: many cases indeed were cited by the counsel on the other side to prove that position, to which may be added another in Lord Raymond (vide Jenny v. Herle, 2 Ld. Raym. 1361), where it was decided that a bill, which was not payable at all events, could not be considered as a bill of exchange: and this admission by the counsel for the defendant in error is decisive of this case; for there is no difference in this respect between promissory notes and bills of exchange; they both stand in pari ratione. If we were to render this point in the least doubtful, we should shake the foundation of that which has been considered as clear law ever since the time of Lord Holt. I am therefore clearly of opinion that this note cannot be declared upon as a negotiable instrument; at the same time I have no doubt but that an action might be framed on it as on a special agreement. The justice of the case is certainly with the defendant in error: but we must not transgress the legal limits of the law, in order to decide according to conscience and equity. We need have no reluctance in reversing the judgment of the common pleas, because as this was a judgment by default, that court had no opportunity of exercising their judgment upon the question. ASHHURST, J. Before the statute of Anne promissory notes were not assignable as choses in action, nor could actions have been brought on them, because the considerations do not appear on them; and it was to answer the purposes of commerce that those notes were put by the statute on the same footing with bills of exchange. Then they cannot rest on a better footing than bills of exchange, but must stand or fall on the same rules by which bills of exchange are governed. Certainty is a great object in commercial instruments; and unless they carry their own validity on the face of them, they are not negotiable; on that ground bills of exchange, which are only payable on a contingency, are not negotiable, because it does not appear on the face of them whether or not they will ever be paid. The same rule then that governs bills of exchange in this respect must also govern promissory notes. And therefore, though this might have been declared on as a special agreement, stating the consideration for the promise, and the sale of the reversion of £43., yet this action. cannot be maintained. This does not come within the custom of merchants respecting bills of exchange, nor is it a negotiable instrument within the statute of Anne, because as a bill of exchange it would not be good. GROSE J. The plaintiff below could only declare either on this instrument, as a note under the statute of Anne, or on the special contract that existed between the parties. He has declared on the former; but this is not a negotiable instrument, because it is not payable at all events. It has been said however that there is a difference in this respect between promissory notes and bills of exchange: but no decision has been cited to warrant such a distinction; and without such an authority I think that we ought not to establish it; for the words of the statute of Anne are "therefore to the intent to encourage trade and commerce, which will be much advanced if such notes shall have the same effect as inland bills of exchange, and shall be negotiated in like manner &c." It clearly appears therefore to have been the intention of the Legislature to put promissory notes on the same foundation as bills of exchange. Now if this had been a bill of exchange, the declaration drawn on it as on a bill within the custom of merchants would have been bad, because the money was only to be paid on a contingency. Then if the plaintiff below had declared on this as on a special contract, he should have shown not only that there was a consideration for the promise, but also that the reversion was sold for at least £10.; whereas here it is merely averred that the reversion was sold, without saying for how much. In whatever way therefore this question is considered, I think the declaration cannot be supported. Judgment reversed. 20 20 See Hibbs v. Brown, 190 N. Y. 167, 82 N. E. 1108 (1907). In Allison v. Hollembeak, 138 Iowa, 479, 114 N. W. 1059 (1908), the following indorsement was held to make a note nonnegotiable: "This note is secured by purchase-money mortgage on 160 acres of land in Guthrie Co., Ia., and payee herein agrees to look to mortgage security for the payment of this note." In Nat. Sav. Bk. v. Cable, 73 Conn. 568, 48 Atl. 428, 429 (1901), the following instrument was held not a bill: "New Haven, Conn., Aug. 16, 99. Treas. Nat. Sav. Bk. New Haven: Pay J. C. Cable, or order, $300, or what may be due on my deposit book. No. E632. [Signed] John D. Edwards." The court said: "It is payable out of a particular fund. It is to pay $300, or what may be due on a specified book. The amount to be paid is made to depend upon the adequacy of a specific fund. Such an order is conditional, and so not negotiable. Neg. Inst. Law, §§ 1, 3." WELLS v. BRIGHAM. (Supreme Judicial Court of Massachusetts, 1850. 6 Cush. 6, 52 Am. Dec. 750.) This was an action of assumpsit, tried before Byington, J., in the court of common pleas, by the plaintiff, as the payee, against the defendant, as the drawee and acceptor of a draft drawn by one George Clay, dated the 2d of January, 1848, of which the following is a copy: "Mr. Brigham-Dear Sir: You will please pay Elisha Wells $30, which is due me for the two-horse wagon bought last spring, and this may be your receipt." The plaintiff declared on the common counts, and filed the draft as a bill of particulars. The defendant objected to the giving of the draft in evidence under the common counts; also that the draft did not, on the face of it, import a consideration between the payee and the drawer; and that the plaintiff must prove such consideration affirmatively. But the judge overruled these objections. The jury found a verdict for the plaintiff and the defendant excepted.21 SHAW, C. J. This is assumpsit by the payee against the acceptor, on a draft for $30, drawn by one George Clay upon the defendant, payable to the plaintiff. The first question is, whether this is a cash draft, or inland bill of exchange; if it is, the nature of the draft answers most of the questions which have been discussed. It is not payable to the order of the payee, but that is not essential to make it a bill of exchange. The King v. Box, 6 Taunt. 325. The parties are all specially named, the drawer, the drawee, and the payee. The draft is payable at a time fixed, to wit, on demand; on no contingency or condition, but absolutely; for a sum certain, out of no special fund, but by the drawee generally. The fact, that the draft indicates a debt due to the drawer as the consideration, between drawer and drawee, does not make it the less a cash order or draft. The drawee, by his acceptance, admits such debt, and is estopped to deny it, as against the payee. It seems to us, therefore, that this document possesses the characteristics of a cash draft, and upon a general acceptance thereof, which may be by parol, binds the drawee to the holder. The acceptor has no right to require proof of consideration, as between the drawer and the payee; the draft itself is proof of the holder's title. The statement of the origin of the debt, the purchase of a wagon, did not make it the less payable absolutely, and at all events, and not conditionally or out of a particular fund. Hausoullier v. Hartsinck, 7 Term R. 733. * Exceptions overruled. 21 Part of the case relating to another point is omitted. |