31 Conn. 534 | Conn. | 1863
The relevancy and admissibility of the evidence introduced by the defendant to prove the indorsement of the instrument on which this suit is founded, depend entirely upon the character of that instrument, whether it is a negotiable promissory note, or a mere unassignable agreement between the original parties to it, as the plaintiffs claim. We think it a negotiable promissory note, and therefore that the evidence was properly received.
By this instrument the defendant promises to pay to the Protection Insurance Company or order, more than thirty-five dollars, and in money only; and our statute (Rev. Stat.,. tit. 87, sec. 1) enacts “that all promissory notes for the amount of thirty-five dollars or more for the payment of money only, and made payable to any person or his order, or to the bearer, shall be assignable and negotiable according to the custom of merchants and the law relating to inland bills of exchange.”
But the plaintiffs claim that this instrument is not a promissory note, and therefore is not within the operation of that statute, because of the stipulation which it contains that “it shall be paid in whole, or from time to time in part, as the same shall be required, within thirty days after demanded, or upon thirty days’ notice in any newspaper printed in Hartford;” which stipulation, in connection with the fact appearing on the face of the note that it was given for an unpaid installment upon shares of stock held by the defendant, the plaintiffs claim renders it'uncertain whether the note ever will become payable, and makes it a mere unassignable agreement between the original parties to it.
We discover no such uncertainty. The import and character of a written instrument are to be ascertained from the
The rule referred to as laid down by judges and elementary writers is, that a promissory note within the statute of Anne and the custom of merchants, must be payable absolutely at all events, though it is of no consequence how long the period of its maturity may be deferred or in suspense, if it must certainly at some time arrive. Story on Bills, § 47; Chitty on Bills, 136. We suppose the meaning of the rule to be, that it must appear upon the face of the instrument that the maker’s promise to pay will be at some time certainly enforceable. And where the event or condition on which the maturity of the note and the maker’s liability to pay depends, is -one over which the holder pro hac vice will have entire control, then there is no such uncertainty regarding it as affects the character of the instrument or its negotiability.
The reason of the rule .illustrates its meaning. Mr. Chitty (on Bills, p. 131,) says: “It would perplex commercial transactions if paper securities of this nature, encumbered with conditions and contingencies, were allowed to have effectual circulation, and if the persons to whom they were offered in the course of negotiation were obliged to inquire when these uncertain events would,probably be reduced to a certainty.” Mr. Story (on Bills, § 46,) says: “A bill of exchange always implies a personal general credit, not limited or applicable .to
The necessity for inquiry in regard to extrinsic facts and contingent events, upon which the payment of securities of this kind sometimes depends, then, is the reason for denying to them the character and advantages of commercial paper. In the case at bar no occasion for such inquiry could arise. When and in what manner the money should be paid was optional with the holder of the paper, and dependent upon no contingency of which he would not have at all times entire control. To him therefore it could never be uncertain whether the note would ever become payable and enforceable or not, or in what manner it should be paid, or in which of the modes specified in the note the notice' of his requisition for such payment should be given; and he could have no occasion to inquire, since he would himself determine all those questions; and so neither the credit or circulation of the paper could be embarrassed by that consideration.
Notes which in terms are made payable on demand, on request, at sight, or on presentment at some specified place, or a specified period after either of those events, are all in strictness of language payable on contingencies, because it is uncertain whether they will ever be demanded, shown, presented, &c., and so it is uncertain when such notes will mature and be enforceable, and whether they ever will be or will not. But neither the validity of such notes, nor their negotiability within the statute or the custom of merchants, is affected by such contingency, because it is one over which the holder of the paper will at all times have entire control; which he, and he alone, can reduce to a certainty at pleasure, and about which he can never have occasion to inquire. And Resides, it is not to be supposed that a creditor will forego forever his right to re
That notes payable at a specified time after demand, notice, sight, presentment, or request, or any future event which is uncertain only in regard to the time of its occurrence, are notes within the custom of merchants, has often been decided. Colehan v. Cooke, Willes, 393; Walker v. Roberts, 1 Car. & Marsh., 590; Thorpe v. Booth, Ry. & Mood., 388; Bristol v. Warner, 19 Conn., 7; Clayton v. Gosling, 5 Barn. & Cress., 360. In the last case the note was payable “ twelve months after notice,” for value received, and Abbott, Ch. J., said: “Nor is the time of payment contingent in the strict sense of the expression, for that means a time which may or may not arrive. This note was made payable at a time which we must suppose would arrive.” See also Cliitty on Bills, 136; Story on Bills, § 47. In Howland v. Edmonds, 24 N. York, 307, Denio, Ch. J., says: “The principle of the authority holding that these words” (on demand) “in a note given for the payment of money do not create a condition precedent is, that the time of requiring payment is left to the uncontrolled will of the creditor. When that is found to be the case no condition is created by the statement that the money is payable on demand, or on request, or when required by the creditor, or when the language contained in this note is used.” .In the note in that case the language used with regard to its payment was the following: “to be paid at such times and in such portions as the directors may require.” In the case of The Goshen Turnpike Co. v. Hurtin, 9 Johns., 217, by the terms of the instrument sued on as a promissory note the defendant promised to pay to the plaintiffs $125 for five shares of the capital stock of said corporation, “ in such manner and proportion and at such time and place as the said plaintiffs should from time to time require,” and upon demurrer to the declaration the court held that the instrument was a good promissory note within the statute, and was properly declared on as such, that it was payable in money, and payable absolutely, and not depending on any contingency, and that it was in effect payable on demand. See also Dutchess Colton Manufacturing
But the plaintiffs contend that the payment of this note depended upon the prior publication of a notification in a Hartford newspaper that such payment was required, that such publication might never be made, and that therefore it depended upon a contingency whether the note would ever become payable or not. This claim is founded on the assumption that the maker had a right to elect in which of the two modes specified in the note the requisition should be made and notice given. We suppose that the right of election belonged to the other party. Lord Coke says that “ when an' election is given of two several things, always he which is the first agent, and which ought to do the first act, shall have the election.” Co. Lit., 145a; Bouvier Law Die., “Election.” In this case the first act, the requisition for the payment of the money, must be done by the holder of the paper. He alone could decide when payment should be made, and until such decision made and promulgated in one of the modes prescribed in the instrument, and until the expiration of thirty days thereafter, the maker was under no obligation to make payment. The argument founded on this assumption therefore fails. The creditor had a right to elect in which of the modes specified in the note the requisition should be made and notice given. The true construction of the defendant’s promise in this respect is, to pay the note within thirty days after notice given in either of the modes specified in the instrument that payment is required. The provision in regard to notice by publication in a newspaper was inserted for the benefit of the creditor, and one which he was at liberty to avail himself of or reject at pleasure. It has none of the characteristics of a condition precedent upon which the maturity of the note or the maker’s duty or liability to pay depends.
Again, it is insisted that this is a stock note, to. be paid only upon the occurrence of losses which might require it, and then only in such sums as might be necessary, and after an assess
The contract of the maker of a negotiable note is with the indorsee as well as with the original payee, and all the rights of the original payee, by the very terms of that contract and by operation of law, pass by indorsement and delivery to, and vest in, each successive holder, and he becomes in turn the promisee, with all the rights incident to that relation, and authorized to enforce the payment of the note in the same manner as it might have been enforced by the payee before its transfer. It follows that after the transfer of this note the determination of the questions when and in what manner its payment should be required, and in which of the modes specified the maker should be notified of such determination, belonged to the indorsees. The payee had no remaining duty in regard to them; so that the negotiation of the note could never be embarrassed
The instrument declared on being a negotiable promissory note, the evidence in question was relevant and properly received; and the superior court having found that the note had been duly indorsed by the present plaintiffs, and delivered to the indorsees for value received, this suit can not be maintained. Lee v. Jilson, 9 Conn., 94; Curtis v. Bemis, 26 Conn., 1. This conclusion renders the decision of the other questions reserved unnecessary.
Judgment should be given for the defendant.
In this opinion the other judges concurred; except Dutton, J., who dissented.
I can not concur with the other members of the court in regarding the note in this case as a negotiable note. Such a note has certain well settled requisites, which, in my-opinion, are not to be found in this. Negotiable paper was allowed for the convenience of trade. It passes from hand to hand as a substitute for money. Paper must possess the general qualities of money, or it would not answer the purpose for which it is used. Hence it is well established law that a note or bill to be negotiable must be certain as to its amount, certain as to its parties, and certain as to the time of payment. The only exceptions to this rule are after all a substantial compliance with it. Some things which are not absolutely certain, as the performance of its obligations by government, are regarded as sufficiently certain. So events that are certain to take place at some time, though it is uncertain, until something future has occurred, when, are considered in the same light; as for instance notes payable on the decease of a particular person. So where the holder of a note can by his own act make the time of payment certain, this has been held to be sufficient. Generally speaking, uncertainty as to the amount to be paid is fatal. Parsons says'(l Parsons on Prom. Notes, 37,) that there are no trustworthy cases within his knowledge, holding that uncertainty as to the amount of a bill or note ' comes under the maxim id cerium est quod cerium reddi po
But I do not rest my opinion chiefly on this ground. There is another, more conclusively fatal to its negotiability. The time of payment is not specified in the note itself, and it is not in the power of any indorsee of the note to fix it.
How then it can have the requisite quality of being a substitute for money in the hands of an indorsee is more than I can conceive.
What is this instrument ? It is on the face of it a stock note. The object and meaning of such notes are as well understood among men of business as bonds or deeds. It is payable by a stockholder to the Protection Insurance Company, or their order, as the second installment of forty-three shares of the stock of the company. It is payable “ in wliole’or from time to time in part, as the same shall be required, within thirty days after demanded, or upon a notification of thirty days in any newspaper printed in Hartford.” Required by whom ? Clearly by the company, that is, by the directors of the company. If it does not appear on the face of the note that the requirement and notice are to be made and given by the directors, then it is uncertain by whom it is to be done. But an indorsee can not take any title to the note, in other words it could not, if otherwise negotiable, be negotiated, unless the directors have power to indorse it. Whether they have power or not depends on the charter of the insurance company. No person therefore could safely take this note without examining the charter. If he examines that he will find, “ that five dollars on each share shall be paid at the time of the subscription, and the remainder of said stock shall within thirty days from said subscription be secured to be paid,
The great question in the case then is this, can a note be held to be negotiable where both the liability of the maker to pay and the time of payment depend on the future action of soqie one besides the holder, and that person the payee? It seems to me it would violate every principle of the law of negotiable paper to hold such a note negotiable. What reliance, would an indorsee put on such a note ? What certainty would he have, if the maker was ever so responsible, that he could obtain the money ? Who would take such a note in mercantile business ? If the payee had indorsed, the note he would be under a strong temptation never to make a demand, as in that case he never could be made liable on his indorsement. If he had indorsed it without recourse it would-be a matter of indifference to him whether he made the demand or not, and the holder would be uncertain whether he ever would. Besides, in this case the demand, if this view is correct, was to be made by the directors, and they might be enjoined against making the demand.
It would require strong authority to satisfy me that such a note is negotiable, and I have been unable to find any that gives any countenance to the claim.
I am aware that where a note is payable after notice by the holder it is negotiable, but that stands on a very different ground. The holder can at any time make it equivalent to money. But where a note is not payable until after notice by some third person or persons, as where property or goods are first to be sold, (De Forest v. Frary, 6 Cowen, 151,) or thirty days after the arrival of a certain ship, (Ex parte Tootell, 4 Ves., 372; 1 Parsons on Prom. Notes, 39,) it is not negotiable. What difference can it make, except against the negotiability, that the third person is the payee. There are but few
It has been strongly insisted that such a note is within the words of our statute, and is therefore negotiable. This is the first time, it is believed, that a note under the statute of this state was ever claimed to be negotiable which had not the certainty inquired in bills of exchange. The records of our courts would be searched in vain for precedents of suits by the indorsee of such a note, though for mouey only, payable on a mere contingency, as on the marriage of some person, the birth of a child, the receipt of money from some particular quarter, or other event of a similar uncertain character. Such notes would come within the words of the statute as fully as this, yet no authority can be found in favor of their negotiability.' Judge Swift, who ought, if any one, to understand this statute, says of a note, “ if payable in any thing else [but money J or at an uncertain time, or out of an uncertain fund, it is not negotiable.” 1 Swift Dig., 430. The English statute, 3 and 4 Anne, is as broad in its terms as ours, and yet it has been repeatedly held there that notes payable on a contingency art?