This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The contract must be either a promise to pay or an order commanding another to pay.1 The former is a promissory note or bond: the latter a bill of exchange or check. So a promise by A to B to accept an order from C, with C's name indorsed thereon, is not a bill of exchange, the order not having been drawn.2 Accordingly a mere acknowledgment of a debt,3 such as an I. O. U.,4 is not negotiable. The difficulty and cause of disagreement among the courts is to determine when such an instrument amounts to a promise to pay. If a receipt contains an express promise to repay it may be a promissory note, as a receipt containing the words, "Which we promise to replace ... on de
6 Titus v. Kyle, 10 0. S. 444.
7Reiff v. Mulholland, 65 0. S. 178; 62 N. E. 124. (In this case reformation had been sought in equity and refused. On trial at law oral evidence was admitted and judgment rendered for defendants. The Supreme Court reversed this judgment and entered judgment for plaintiff on the conceded facts.)
8 Kean v. Davis. 21 N. J. L. 683.
1Torpey v. Tebo, 184 Mass. 307; 73
68 N. E. 223; Hitchcock v. Cloutier, 7 Vt. 22.
2 Allen v. Leavens, 26 Or. 164; 4f. Am. St. Rep. 613; 26 L. R. A. 620; 37 Pac. 488.
3 Currier v. Lockwood, 40 Conn 349; 16 Am. Rep. 40; Gay v. B bake, 151 Mass. 115; 21 Am. St. Rep. 434; 7 L. R. A. 392; 28 N. E 835; Brenzter v. Wightman, 7 W.. & S. (Pa.) 264.
4 Gay v. Roake, 151 N.E. 115; mand."5 If a receipt provides for repayment, it is a promissory note, though it contains no express promise to pay.0 Thus the words "payable,"7 or "to be paid,"8 make the instrument in which they are contained a note instead of a mere receipt. So a statement of time at which the debt is due,9 as "due ... on demand," 10 may import a promise. Some authorities, however, go farther and treat all due-bills as promissory notes, on the theory that they contain an implied promise to pay.11 An acknowledgment of a debt evidenced by a lost note and a renewal of such note is in effect a promise to pay such debt, and may itself be negotiable.12