A promissory note is defined as "an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person or to bearer." It is usually drawn in the following form:
London, June 30th, 1906. £500.
One month after date I/we promise (or we jointly and severally promise) to pay to the order of John Jameson the sum of five hundred pounds for value received.
Payable at the Lombard Bank, 250, Lombard Street, E.C.
The "maker" of a promissory note stands in the same position towards the endorsers or holder as the accepter of a bill of exchange. The law relating to bills of exchange, applies also to promissory notes, except for the provisions relating to:
(a) Presentment for acceptance.
(c) Acceptance supra protest.
(d) Bills in a set.
When a foreign note is dishonoured, protest thereof is unnecessary.
The following are the chief provisions of the Stamp Act, 1891 (54 and 55 Vict. c. 39), relating to bills of exchange and promissory notes other than those issued by a banker payable to bearer on demand, the stamps on which are enumerated in vol. ii, Section XXIX. It should be noted that for the purposes of the Stamp Act, the Isle of Man and the Channel Islands, as well as the other British possessions and Colonies, are deemed to be foreign countries.
Sect. 32. "For the purposes of this Act the expression bill of exchange' includes draft, order, cheque, and letter of credit, and any document or writing (except a bank-note), entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money; and the expression 'bill of exchange payable on demand' includes:
(a) "An order for the payment of any sum of money by a bill of exchange or promissory note, or for the delivery of any bill of exchange or promissory note in satisfaction of any sum of money, or for the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen; and
(b) "An order for the payment of any sum of money weekly, monthly, or at any other stated periods, and also an order for the payment by any person at any time after the date thereof of any sum of money, and sent or delivered by the person making the same to the person by whom the payment is to be made, and not to the person to whom the payment is to be made, or to any person on his behalf."
Sect. 33. (1) "For the purposes of this Act the expression 'promissory note' includes any document or writing (except a bank-note) containing a promise to pay any sum of money."
(2) "A note promising the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen, is to be deemed a promissory note for that sum of money."
Sect. 34. (1) "The fixed duty of one penny on a bill of exchange payable on demand or at sight or on presentation may be denoted by an adhesive stamp, which, when the bill is drawn in the United Kingdom, is to be cancelled by the person by whom the bill is signed before he delivers it out of his hands, custody, or power."
(2) "The ad valorem duties upon bills of exchange and promissory notes drawn or made out of the United Kingdom are to be denoted by adhesive stamps."
Sect. 35. (1) "Every person into whose hands any bill of exchange or promissory note drawn or made out of the United Kingdom comes in the United Kingdom before it is stamped shall, before he presents for payment, or endorses, transfers, or in any manner negotiates, or pays the bill or note, affix thereto a proper adhesive stamp or proper adhesive stamps of sufficient amount, and cancel every stamp so affixed thereto.
(2) "Provided as follows:
(a) "If at the time when any such bill or note comes into the hands of any bond fide holder thereof there is affixed thereunto an adhesive stamp effectually cancelled, the stamp shall, so far as relates to the holder, be deemed to be duly cancelled, although it may not appear to have been affixed or cancelled by the proper person.
(b) "If at the time when any such bill or note comes into the hands of any bond fide holder, there is affixed thereto an adhesive stamp not duly cancelled, it shall be competent for the holder to cancel the stamp as if he were the person by whom it was affixed, and upon his so doing the bill or note shall be deemed duly stamped, and as valid and available as if the stamp had been cancelled by the person by whom it was affixed.
(3) "But neither of the foregoing provisoes is to relieve any person from any fine or penalty incurred by him for not cancelling an adhesive stamp.
Sect. 36. "A bill of exchange or promissory note which purports to be drawn or made out of the United Kingdom is, for the purposes of determining the mode in which the stamp duty is to be denoted, to be deemed to have been so drawn or made, although it may in fact have been drawn or made within the United Kingdom.
Sect. 37. (1) "Where a bill of exchange or promissory note has been written on material bearing an impressed stamp of sufficient amount but of improper denomination, it may be stamped with the proper stamp on payment of the duty, and a penalty of forty shillings if the bill or note be not then payable according to its tenor, and of ten pounds if the same be so payable.
(2) "Except as aforesaid, no bill of exchange or promissory note shall be stamped with an impressed stamp after the execution thereof.
Sect. 38. (1) "Every person who issues, endorses, transfers, negotiates, presents for payment, or pays any bill of exchange or promissory note liable to duty, and not being duly stamped shall incur a fine of ten pounds, and the person who takes or receives from any other person any such bill or note, either in payment or as a security, or by purchase or otherwise, shall not be entitled to recover thereon, or to make the same available for any purpose whatever.
(2) "Provided that if any bill of exchange payable on demand or at sight or on presentation, is presented for payment unstamped, the person to whom it is presented may affix thereto an adhesive stamp, and cancel the same, as if he had been the drawer of the bill, and may, thereupon, pay the sum in the bill mentioned, and charge the duty in account against the person by whom the bill was drawn, or deduct the duty from the said sum, and the bill is, so far as respects the duty, to be deemed valid and available.
(3) "But the foregoing proviso is not to relieve any person from any fine or penalty incurred by him in relation to such bill.
Sect. 39. "When a bill of exchange is drawn in a set according to the custom of merchants, and one of the set is duly stamped, the other or others of the set shall, unless issued or in some manner negotiated apart from the duly stamped bill, be exempt from duty; and upon proof of the loss or destruction of a duly stamped bill forming one of a set, any other bill of the set which has not been issued or in any manner negotiated apart from the lost or destroyed bill may, although unstamped, be admitted in evidence to prove the contents of the lost or destroyed bill."