This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 375.— Referring to the case of Dominion Bank v. Wiggins, reported at page 80 of Vol. 1 of the Journal, and to the comment on the case at page 2 in which you express the opinion that a lien note could possibly be so framed as to make it negotiable and yet do all that is effected by the lien note now commonly in use,—would the following form of note meet the case:
Six months after date I promise to pay............or
order at the..... Bank, Winnipeg, ......dollars, value
This note is given for a .... reaper, on which I hereby give a lien to the holder of this note from time to time as security for the payment of this note.
Answer.—We think that the above is a negotiable promissory note, giving the holder thereof all the rights and remedies usually possessed by the holder of a negotiable instrument. Although it is stated that the money to be paid is the consideration for the sale of the property, there is nothing importing that anything further is to be done by the vendor of the property in the way of making title or otherwise. On the contrary, the marker gives a lien to the holder of the note which would imply, if anything, that the sale to the maker was complete. We do not say that the lien given would afford a safe security, as it would be void as against creditors under the Chattel Mortgage Act. We merely say that mention of the lien 011 note would not prevent its being a negotiable instrument.