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"Must Contain An Unconditional Promise Or Order To Pay A Sum Certain In Money.".

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7. Siegel v.Bank, 131 Illinois Reports, 669. Thecourtdecided that thenotewas negotiable and allowed the bank to recover judgment thereon; saying inpart: "If it be conceded, as it must, that a condition inserted in a promissory note, postponing the day ofpaymentuntil the happening of some uncertain or contingent event, will destroy its negotiability * * * yet under the authorities, if by the instrument the maker promises to pay a sum certain at a day certain, to a certain person or his order, such instrument must be regarded as negotiable, although it also contains a recital of theconsideration. * * *" In another case,8 a suit was brought on a promissory note in the usualform, except that it contained the words "given for a patentright." It was sold by the payee and when suit was brought by the holder, the maker set up that the note wassecuredthrough fraud by which he was sold a worthless patent right, and claimed the right to assert this defense against the purchaser of the note on the theory that this recitation made it non-negotiable, or put the purchaser on notice. The court in deciding that the note was negotiable, said in part: "Mercantile paper by legal inference imports a consideration. But if this implication is strengthened by a statement on the face of the paper that there was a consideration, and in what the consideration consisted, can it be said that this will impair or degrade the security?" 8. Hereth v. Meyer, 33 Indiana Reports, 511. The following cases show a different result. This instrument was given:9 "Chicago, July 12, 1877. Mrs. Martha A. Miller: Please pay to the Excelsior StoneCompany , or order, for stone in your buildings, $600 in installments, as follows: $200 when first floor joists are in; $200 when building is ready for the roof; $200 when stoops are finished; and charge same to my account. James Parrott. Accepted July 12, 1877. Martha A. Miller." This instrument is not a negotiable instrument, as payment is to be made only as work progresses and upon certain things being done. Anyone taking this instrument, though giving value, having no notice and acquiring it before maturity, would take it subject to the defenses which might have been made against the payee therein. Another note10 read "12 months after date, we promise to pay to ourselves or order $321.25 for value received, payable in Boston and subject to a policy." The court held that this reference to a policy rendered the note non-negotiable and impressed it as a contract merely assignable and subject to defenses in the hands of the assignee.

See. or being acreditorof that other."11 An order read as follows:12 "StaRkey. it must appear that the alleged bill of exchange is drawn on the general credit of the drawer. there is a direction to the debtor to pay it to the assignee named. the sum of $2." on which was indorsed: "Accepted. and having done so. That it is. A could not have charged the deficiency to B. Yet a mere reference to a fund or account to indicate the source of reimbursement or for bookkeeping purposes does not hinder negotiability. or order. 10. . 1869. does not in itself destroy negotiability. You will please pay to M. you to do. (sd) B. N. there is a direction to the drawee to pay a certain amount. In the case of a bill referring to a fund. In other words. This my order did not authorize. he would have thepower to charge the bill up to the general account of the drawer. 273. the instrument may express a good contract and be assignable but it is not negotiable.000. then to reimburse himself out of the fund mentioned. Adapted from Munger v. or a particular account to be debited with the amount. Y. it would operate as an assignment (which a bill of exchange does not) . but if the promise is in any way qualified by a reference to the consideration. Uniform Negotiable Instruments Act. nor youracceptancebind. 333. had there been no profits. The negotiable instrument law in this respect provides. 61 New York Re-ports.00. 1 Illinois Appellate Reports. the negotiability of an instrument cannot rest upon such extrinsic circumstance. may give an order upon such other to transfer the funds or pay the debt to a third." The court said in part: "The true test would seem to be whether the drawee is confined to the particular fund. A promise or order to be negotiable must be on the general credit of the maker or drawer. (sd) A. that the promise or order is unconditional when there is "an indication of a particular fund out of which reimbursement is to be made. negotiability is prevented." 11. but it would not be drawn on the general credit of the drawer. or not sufficient profits.. 9. Jany. 6. or if insufficient. Feb. 7 Allen (Massachusetts). that a mere recital of the consideration. 1869. if the designated fund should turn out to be insufficient. 6. Excelsior Stone Co. One having funds with another. 251. or whether though a specified fund is mentioned. (3) Reference to particular fund.. Am. ample. etc. Miller v. If a promise or order is made to pay out of or by means of a certain fund. In the case of an assignment of a fund or debt. in fact. for the reason that the fund may not be ample. on demand. credit. That could not be a negotiable bill of exchange. 12. provided that there would still be a right of recourse to him if the fund were not sufficient. and deduct the same from my share of theprofitsof our partnership business in malting. Blanchard. It is no objection however that the fund or an account be referred to in order to indicate how the drawee shall upon payment re-imburse himself. Bank v. even though that consideration appears to be executory innature. To A. In the final analysis of each case. and not of a particular fund or account.The principle is illustrated by these cases. account. Shannon." This was a direction to pay out of a particular fund and was not on B's general credit. Exch. 3.. for B could have replied: "I directed you to pay out of a certain fund but you saw fit to advance money to supply the deficiency of that fund. is immaterial. to charge the balance up to the general credit of the drawer.

then the entire sum shall become due and payable. Sec. although it is to be paid: 1. This is illustrated in the case of a bank check. or 4. 14. Certainty Of Sum Payable Promise or order must be "to pay a sum certain. with interest at the rate of 6% per annum and taxes. Myers. . Thus a note read: "Waterbuby. I.13 (2) When sum held not uncertain. or an attorney's fee. determinable from the language of the instrument it-self. and often also contain a provision that on the failure of the payment of any installment or of interest. With interest. If the giving of the check amounted to an assignment. or 5. but is left to his rights against the drawer. "The sum payable is a sum certain within the meaning of this act. whether at a fixed rate or at the current rate. Certainty of sum payable must appear from the Instrument to render it negotiable. Certainty of amount payable. Smith v. SEC. it was not a negotiable instrument for the reason that the words "and taxes" made the amount payable uncertain. 13. With exchange. 128.14 Instruments often provide for payment in fixed installments. Value received.It may be noted here that if an order is really an assignment of a fund or credit it needs no acceptance to give the assignee a right to sue the debtor upon it. in case payment shall not be made at maturity. Aug. 2. the whole shall become due." (1)In general. and these are valid provisions and do not affect the negotiability of the instrument. By stated installments. thirty five hundred dollars at the Fourth National Bank. By stated installments. Myers." The court held that though this instrument might be theexpressionof a valid contract between the parties. Grannis. One year after date I promise to pay to the order of Norman D. 18. With costs ofcollection. with a provision that upon default in payment of any installment or of interest.. 1893. Yet the payee of thecheckcan take no action against the bank if it refuses to accept or pay the check. Negotiable Instruments Law. as the right of assignment by the creditor is not dependent on the debtor's assent. C. the assignee could demand payment of the bank and have judgment if it refused to recognize the assignment without cause. W. But a drawee of a bill of exchange cannot be made liable on the instrument until he accepts it. isessentialto negotiability. Conn. or 2. and this even though it amounts to a breach of contract or duty as between himself and the drawer. or 3. The bank is under contract with the depositor to pay hischecksif his deposit is ample to cover them. 207 Illinois Reports.

If the amount of the attorney's fee is not stated. prevents negotiability. sometimes merely stating "at current rate.UNMbQG8-urQ#ixzz2FbKMjUi5 . sometimes expressing the rate. any provision whatsoever that renders the sum payable uncertain in amount destroys negotiability. Aside from the provisions stated. a reasonable amount is allowed by the court. The costs of collection and the attorney's fee never become chargeable or of any effect if the instrument is paid at maturity. or in money and goods. this does not render the amount uncertain within the meaning of the law. It is only in case it becomes necessary after maturity to incur liability for costs or an attorney's fees. stating or not stating the amount thereof. that they may be added. if payment is not made at maturity.html#. or in goods. 19.Instruments often contain provisions as to payment of exchange. Sec. Read more:http://chestofbooks." and this does not make the amount uncertain within the meaning of the law. Payment In Money Promise or order must be to pay a sum certain "in money. Where a provision is to pay an attorney's fee.com/business/law/American-Commercial-Law-Series/Must-Contain-AnUnconditional-Promise-Or-Order-To-Pay-A-Sum. Promise or order to pay in notes or other evidences of indebtedness or in securities of any sort." The payment promised or ordered must be in money. or in money or goods at the option of the maker or drawer or acceptor.