A promissory note is a promise or engagement in writing to pay a specified sum at a time therein limited, or on demand, or at sight, to a person therein named, or his order or assigns, or to the bearer. The person making the note is called the drawer or maker.

A note is void when founded upon fraud. Thus, a note obtained from a person when intoxicated, or obtained for any reason which is illegal, cannot be collected.* A note given upon Sunday is also void in some States.

Notes bear interest only when it is so expressed; after they become due, however, they draw the legal rate of the State.† Notes payable on demand or at sight, draw no interest until after presentation or demand of the same has

* If, however, the note is transferred to an innocent holder, the claim of fraud or no value received will not avail. The party holding the note can collect it if the maker is able to pay it.

† If it is intended to have the note draw more than the legal rate of interest, after maturity, the words should so specify in the body of the note as follows: " with interest at the rate of per cent until paid.

Promissory Notes 369

for per or by the. Thus, Butter sells at 20@30c

Promissory Notes 370

lb, and Flour at $8@12

Promissory Notes 371


% for per cent and # for number.

May 1. - Wheat sells at $1.20@1.25, "seller June." Seller June means that the person who sells the wheat has the privilege of delivering it at any time during the month of June.

Selling short, is contracting to deliver a certain amount of grain or stock, at a fixed price, within a certain length of time, when the seller has not the stock on hand. It is for the interest of the person selling " short," to depress the been made, unless they provide for interest from date on their face; they then draw the legal rate of interest of the State.

If "with interest" is included in the note, it draws the legal rate of the State where it is given, from the time it is made.

If the note is to draw a special rate of interest higher than the legal, but not higher than the law allows, the rate must be specified.

If the note is made payable to a person or order, to a person or bearer, to a person or his assigns, or to the cashier of an incorporated company or order, such notes are negotiable.

When transferring the note, the indorser frees himself from responsibility, so far as the payment is concerned, by writing on the back, above his name, "Without recourse to me in any event."*

When a note is made payable at a definite period after date, three days beyond the time expressed on the face of the note (called days of grace) are allowed to the person who is to pay the same, within which to make such payment. Notes payable on demand are not entitled to days of grace.*

If a note is payable at a bank, and is held there on the day upon which it falls due, until the usual hour for closing, ready for receiving payment thereon, no further demand upon the maker is necessary, in order to charge the indorser. The demand must, in all cases, be made upon the last of the days of grace; a demand before that time passing for nothing as against the indorser.

*Banks usually charge interest on Days of Grace.

The days of grace, which must be computed according to the laws of the State where the note is payable, are to be reckoned exclusive of the day when the note would otherwise become due, and without deduction for Sundays or holidays; in which latter case, by special enactments in most of the States, notes are deemed to become due upon the secular day next preceding such days. Thus, a note, due upon the twenty-fifth day of December, is payable on the twenty-fourth, as the day when due is Christmas day; if the twenty-fourth chance to be Sunday, it is due upon the twenty-third.

In order to charge an indorser, the note, if payable at a particular place, must be presented for payment at the place upon the very day it becomes due; if no place of payment be named, it must be presented, either to the maker personally, or at his place of business, during business hours, or at his dwelling house, within reasonable hours; if payable by a firm, a presentment may be made to either of the partners, or at the firm's place of business; if given by several persons jointly, not partners, the demand must be made upon all. If the note has been lost, mislaid, or destroyed, the holder must still make a regular and formal demand, offering the party, at the same time, a sufficient indemnity in the event of his paying the same

The simple indorsment of the name of the person selling the note, which serves as a transfer, upon the back of the same, is not in some States a guarantee for the payment of the note at maturity. When it is designed particularly to be a guarantee, it should be so stated on the back of the note, as follows:


"For value received, I (or we) hereby guarantee the payment of the within note at maturity, or at any time thereafter, with interest at----per cent, until paid ; and agree to pay all costs or expenses paid or incurred in collecting the same."


To avoid the danger of the signer of the guarantee claiming at a future time that said guarantee was written above his name without his knowledge, it is best to have his signature written twice, once above the guarantee, to serve as a transfer, and once below to serve as the guarantee, as shown above.

Negotiable Note

With interest at legal rate per cent, from date.

$500. Chicago, ILL., Jan. 1,18 - .

Three months after date, for value received, I promise to pay Charles Mix, or order, Five Hundred dollars, with interest.


Negotiable Note

With interest at ten per cent, after maturity, until paid.

$100. Des Moines, Ia., April 2, 18 - .

For value received, ninety days after date, I promise to pay Orlando Warner, or order, One Hundred dollars, with interest at ten per cent, after maturity, until paid.


Form for Pennsylvania.

Negotiable Note 372

Note not Negotiable.

Negotiable Note 373

Note for Two or More Persons.

Negotiable Note 374

Note on Demand.


Northampton, Mass., March 1, 18-. On demand, I promise to pay Clinton Briggs, or order, One Hundred dollars, value received, with interest.


Married Woman's Note in New York.

$50. Rochester, N. Y., April 10, 18-.

For value received, I promise to pay A. B. Smith, or order, Fifty dollars, one year from date, with interest. And I hereby charge my individual property and estate with the payment of this note.