as such in pleading. It must be treated as a simple contract for the delivery of merchandise.

Question 414: Is the above note negotiable? Why?

Case 415. Martin v. Chauntry, 2 Strange Reports (Eng.) 1271.

"The Court held on error from C. B. that a note to deliver up horses and a wharf, and pay money at a particular day could not be counted on as a note within the statute; and therefore reversed the judgment."

Question 415: What did the instrument in this case provide? Was it negotiable? Why?

Case 416. Matthews v. Houghton, 11 Maine Reports, 377.

Facts: Suit on the following note:

"Madison, July 31, 1826. "For value received, I promise to pay Jacob Matthews or order forty-five dollars in grain, at the market price next January, or forty dollars in two years from next January and interest. (sd) Nathan Houghton."

MUELLER, C. J.:

66*

There can be no possible

doubt as to the character of the note, clearly it is not a negotiable note.

Question 416: Who had the option (the maker or holder) in paying the money or delivering the grain? Was the instrument negotiable?

Case 417. Hodges v. Schuler, 22 N. Y. 114.

Facts: Suit by the indorsee of a note against the indorsers. The note read as follows:

RUTLAND AND BURLINGTON RAILROAD

"No. 253.

COMPANY.

$1,000.00

"Boston, April 1, 1850.

"In four years from date for value received, the Rutland and Burlington Railroad Company promises to pay in Boston, to Messrs. W. S. and D. W. Shuler, or order,

$1,000, with interest thereon, payable semi-annually, as per interest warrants hereto attached, as the same shall become due; or upon the surrender of this note, together with the interest warrants not due to the treasurer, at any time until six months of its maturity, he shall issue to the holder thereof ten shares in the capital stock in said company in exchange therefor, in which case interest shall be paid to the date to which a dividend of profits shall have been previously declared, the holder not being entitled to both interest and accruing profits during the same period. (Signed)"

Defense: That the defendant is not liable as indorser according to the rules of negotiable paper, for the default of the principal maker, because the paper sued on is not negotiable, being for the payment of money or stock, in the alternative.

Point Involved: Whether a promise in the alternative to pay money or do something else at the option of the holder, destroys negotiability of an instrument otherwise negotiable.

WRIGHT, J.: "The single question is, whether the defendants can be held as indorsers. It is insisted that they cannot, for the reasons, first, that the instrument set out in the complaint, is neither in terms nor legal effect a negotiable promissory note, but a mere agreement; the indorsement in blank of the defendants, operating, if at all, only as a mere transfer, and not as an engagement to fulfill the contract of the railroad company in case of its default;

"The instrument on which the action was brought has all the essential qualities of a negotiable promissory note. It is for the unconditional payment of a certain sum of money, at a specified time, to the payee's order. It is not an agreement in the alternative, to pay in money or railroad stock. It was not optional with the makers to pay in money or stock and thus fulfill their promise in either of two specified ways; in such case, the promise would have been in the alternative. The possibility seems to

have been contemplated that the owner of the stock might, before its maturity, surrender it in exchange for stock, thus canceling it and its money promise; but that promise was nevertheless absolute and unconditional, and was as lasting as the note itself. In no event could the holder require money and stock. It was only upon a surrender of the note that he was to receive stock; and the money payment did not mature until six months after the holder's right to exchange the note for stock had expired. We are of the opinion that the instrument wants none of the essential requisites of a negotiable promissory note. The engagement of the railroad company was to pay the sum of $1,000 in four years from date, and its promise could only be fulfilled by the payment of the money at the day named."

Question 417: In what capacity was the defendant sought to be held in this case? What was his defense? How did the Court dispose of it? Who (the maker or holder) had the option given in the note?

Case 418. Negotiable Instruments Act, Sec. 6.

"The validity and negotiable character of an instru- . ment are not affected by the fact that:

"5. (It) designates a particular kind of current money in which payment is made."

Question 418: State the above provision.

Case 419. Hogue v. Williamson, 85 Tex. 553.
Facts: Suit on a note reading as follows:

"Saltillo, Jan. 25, 1888. On or before May 1, 1888, I promise to pay C. C. Hogue or order, One Thousand Mexican Silver Dollars.

(Sd) Geo. S. Williamson."

The plaintiff, Hogue, put in evidence this note and proved the value in American money of Mexican silver dollars. He then rested his case. The defendant put in

no testimony and asked judgment on the ground that plaintiff had proved no case. [In suit on a simple nonnegotiable contract, the plaintiff must prove the consideration and the breach by defendant before he has made a prima facie case, but in a suit on a negotiable instrument a prima facie case is made by the proof of the instrument sued on.] Defendant had judgment below and plaintiff appeals to the present Court.

Point Involved: Whether an instrument which is payable in foreign money is negotiable.

"We are of the opinion that the instrument in question is a promissory note. It is such in form and in substance, unless the fact that the sum payable is expressed in Mexican silver dollars should make a difference. Speaking of the sum for which a bill of exchange must be drawn, Mr. Chitty says: 'It may be the money of any country.' Chitty, Bills & Notes, 160. Judge Story says: 'But,

payment of money only, it

provided the note be for the is wholly immaterial in the currency or money of what country it may be payable. It may be payable in the money or currency of England or France or Spain or Holland or Italy or of any other country. It may be payable in coins, such as in pounds sterling, livres, turnoises, francs, florins, etc., for in all these and the like cases the sum of money to be paid is fixed by the par of exchange, or the known denomination of the currency with reference to the par.' Story, Prom. Notes, Sec. 17. The same rule is distinctly laid down in 1 Dan. Neg. Inst. Sec. 58, and in Tiedeman, Commercial Paper, Sec. 29b.

Question 419: What was the objection to the above instrument as negotiable paper? How did the Court decide? Give its

reason.

(Note: There is a doubt as to the negotiability of instruments payable "in currency" "in current funds," etc. Although it is doubtful that such words serve any purpose, still parties do use them and hence the law should be settled, and settled

in favor of the negotiability thereof. Professor Brannan suggests the following amendment to the Negotiable Instrument Act: For "Designates a particular kind of current money in which payment is to made." (Section 6(5).

Substitute:

"Is payable in currency or current funds or designates a particular kind of current money in which payment is to be made. The words 'currency,' 'current money' or 'current funds' shall mean such circulating media as are legal tender or are lawfully and actually circulating at par with legal tender at the time and place of payment.")

D. "Must be Payable on Demand or at a Fixed or
Determinable Future Time."

§ 413. (Nego. Instru., Sec. 22.) Demand paper.

Case 420. Uniform Negotiable Instruments Act, Sec. 7. "An instrument is payable on demand:

"1. Where it is expressed to be payable on demand or at sight, or on presentation; or

2. In which no time for payment is expressed. "Where an instrument is issued, accepted or indorsed when overdue, it is, as regards the person so issuing, accepting or indorsing it, payable on demand."

Question 420: When is a negotiable instrument payable on demand?

(Note: The editor has observed that it is a very common fallacy for the student to say that a note in which no time of payment is expressed is non-negotiable; and also to say that an undated instrument is non-negotiable. It should be emphasized that such instruments are not for these reasons non-negotiable, although perhaps in some cases not drawn with care.)

Case 421. Hall v. Toby, 110 Pa. St. 318.
Facts: Suit on the following note:

"551.50.

Warren, Aug. 18, 1879.

"For value received, I promise to pay to Wm. Toby, or order, five hundred and fifty-one 50/100 dollars with interest.

(endorsed by Toby)

Orris Hall."