Smilie v. Stevens, 39 Vt. 315

Smilie v. Stevens

39 Vt. 315 | Vt. | 1866

The opinion of the court was delivered by

Peck, J.

The principal question made in this case is, whether the instrument set forth in words and figures in the declaration is a negotiable instrument, so as to enable the'plaintiff to maintain an action upon it in his own name as endorser. It appears from the instrument that the consideration moved from James Smilie, Jr., to the defendant, by the 'deposit with the latter by the former, of $500., and is in terms “payable to his (James Smilie, Jr.¿) order on demand with interest from February 15 th, 1864, on the return of this certificate gmd my guarantee of Ms note to his brother John Smilie, dated Febru*317ary 15 ih, 1864, for the sum of five hundred dollars;” and is signed by the defendant.

It is a general principle o.f the common law that a chose in action is not assignable, even if in terms made payable to bearer or to the order of the promisee ; but by the law merchant it is otherwise in case of promissory notes and bills of exchange in terms made payable to bearer or to the order of the payee. The question is whether this instrument'is a promissory note within the meaning of the law merchant, as applicable to this question. The general rule on this subject is, that a promissory note or bill of exchange must be payable absolutely and not depend on a contingency, in order to come within the definition of a bill or promissory note so as to be negotiable. If the contingency depends on an event which necessarily must happen, so that the only contingency or uncertainty is as to time, it does not destroy the negotiability of the instrument. So too if the contingency, as. to the time of payment, depends on an act to be done by the holder in reference to the instrument itself to hasten or fix the time of payment, as if a bill or note is made payable a given7number of days after presentment and demand of payment, such contingency does not destroy its negotiability ; as in such case the instrument imports an absolute indebtedness. The fact that the instrument in question is made payable “ on the return of this certificate,” is not such a contingency as affects its negotiable character. It is an act to be done with the instrument itself cotempora-ueous with the payment, and is no more than would be the implied duty of the holder of a negotiable note or bill in the absence of such stipulation; as it is the duty of the holder to deliver up a negotiable promissory note or bill on the payment of it by the maker, as a voucher for his security, or show a sufficient excuse for not doing so.

There is another contingency of a different character; the return of the maker’s guarantee of the payee’s note for $500. to his brother John Smilie. This contingency is 'collateral to the instrument in question, and depends on an act to be done by the payee, and on the performance of which the liability of the defendant depends. By the terms, of this instrument the payee could have no remedy upon it till he had performed the condition, either literally or at least in some *318mode that would release the defendant from his liability on that guarantee. This the payee might never do, and the defendant might be compelled to pay the $500. note he thus guaranteed ; which payment would extinguish his liability on the paper in question. This is not a mere contingency as to the time of payment, it is a condition to be performed by the payee, and only on the substantial performance of which can any liability of the defendant, upon this instrument, arise. It is by the terms of the- contract in question contingent, whether the defendant would ever beeoyne liable upon it.

The authorities are numerous to show that an instrument having all the other requisites of a promissory note, is not with such a condition, or subject to such a contingency, negotiable. If the plaintiff could show a special promise by the defendant to pay to him as assignee or endorsee, and shew the condition performed, he might recover but the declaration contains no such allegation. The declaration is insufficient for the reasons stated, and the other objections to it, need not be noticed.

The plaintiff has leave to amend under the general rule as to costs, and therefore the judgment of the county court is reversed, pro formar and case remanded.