A negotiable instrument may be payable on demand.
Instruments to be negotiable must be payable on demand or at a fixed or determinable future time.
What is demand paper? The negotiable instrument act provides that paper is payable on demand:
"1. Where it is expressed to be payable on demand, or at sight, or on presentation.
"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."41
36. Pratt v. Higginson, 119 N. E. (Mass.) 661; Nego. Instru. Act, SEC. 5 (4)
37. Keith v. Jones, 9 Johns. 120.
38. Nego. Instru. Act, SEC. 6 (5).
40. Hodge v. Williamson, 85 Tex. 553; Brown v. Perera, 176 N. Y. S. 215 at 220.
Example 20. A note reading "On demand I promise to pay to the order of," etc. complies with the requirements of the negotiable instruments law as to time of payment.
If not payable on demand the instrument must be payable at a fixed or determinable future time.
(1) In general.
It is essential to negotiability that an instrument be payable at a time that is absolutely certain to arrive as shown by the language of the instrument itself, and not as might be shown by any extrinsic circumstances. If the language in the instrument makes it doubtful whether the time of payment will ever arrive, no matter how probable that arrival may be, the instrument is not negotiable.42
(2) What constitutes fixed or determinable future time, (a) Text of negotiable instruments act.
"An instrument is payable at a determinable future time, within the meaning of this act, which is expressed to be payable,
1. At a fixed period after date or sight; or
2. On or before a fixed or determinable future time specified therein; or
41. Ncgo. Instru. Act, Sec 7.
42. Coolidge v. Ruggtes, 15 Mass. 387.
3. On or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time of happening be uncertain. An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect."43
(b) Payment dependent upon event not certain to arrive.
If the instrument is expressed to be payable upon the happening of any event not absolutely certain to take place, the note is not negotiable.
Example 21. The plaintiff sued on an instrument to which he claimed title, as indorsee, which was to become due and payable when Henry D. Kelly became 21 years of age. The plaintiff proved that said Kelly did become 21 years of age before the suit was started. It became material in the case to establish whether this instrument was or was not a negotiable instrument. The court in deciding that it was not negotiable said, in part, "* * * Was the instrument in question a [negotiable] promissory note? To constitute a promissory note, the money must be certainly payable, not dependent on any contingency, either as to the event or the fund out of which payment is to be made or the parties by or to whom payment is to be made. If the terms of an instrument leave it uncertain whether the money will ever become payable, it cannot be considered as a promissory note. Thus a promise in writing to pay a sum of money when a particular person shall be married is not a promissory note, because it is not certain he will ever be
43. Nego. Instru. Act, SEC. 4.
married. So of a promise to pay when a particular ship shall return from sea, for it is not certain she will ever return. But if the event on which the money is to become payable must inevitably take place it is a matter of no importance how long the payment may be suspended. * * *
"The fact that the payee lived till he was 21 years of age makes no difference. It was not a promissory note when made and it could not become such by matter ex post facto."44
(c) Payment on or before time or upon event certain to happen.
An instrument (otherwise correctly drawn) is negotiable if payable at any future date, or on or before any future date. Instruments so payable are the usual cases.
If an event is certain to happen, as payment to be made upon one's death, or a specified time after one's death, the note is negotiable.45
If it is provided in a note that the maker may extend the time of payment as he sees fit, this has been held to destroy negotiability ;45a but it has also been held that a provision that the makers and indorsers consent to extension without notice does not destroy negotiability.45b Clearly a provision that indorsers so consent would be merely for the purpose of preventing any extension to release them, and would not effect negotiability.
44. Kelly v. Hemmingway, 13 111. 604.
45. Colehan v. Cooke, Willes, 393, Stra. 217. 45a. Glidden v. Henry, 104 Ind. 278.
45b. First Nat. Bk. v. Buttery, 17 N. D. 326, 16 L. R. A. N. S. 878; Stitzel v. Miller, 250 111. 72.