THE SUM OF MONEY MUST BE PAYABLE WITHOUT CONDITIONS. A fourth requisite of commercial paper is that the sum of money promised must be payable absolutely and without conditions. The payment must be prom ised at a time certain or upon a condition that must happen, and not depend upon a contingent event. Thus where the paper was payable, provided a ship should arrive (Coolidge v. Ruggles, 15 Mass., 387), provided a railroad should be built to a certain point within a stated time (Blackman v. Lehman, 63 Ala., 547), or provided the maker was able (Lalinas v. Wright, It Tex., 572), the instrument was held non negotiable because of the condition being contingent or uncertain. Any uncertainty or indefiniteness in the time of payment will destroy the negotiability of the paper, but if the condition upon which the note or bill is to be paid must happen in the ordi nary course of events, however remote, the instru "A. B. dies," or on the first day of January, 2000, is a valid negotiable instrument, as the event stated must happen.
So if the instrument is to be negotiable the amount must not be made payable out of a particular fund, hut must be drawn absolutely for the payment of the stated amount by the maker or acceptor without reference to a special fund. Thus if the paper is written, payable out of a pension, out of stated funds when received, "provided A shall not pay it," "out of the net proceeds of certain ore," "on account of brick work done on a certain building," and the like, it is uniformly held to be non-nego tiable.
A drawer of the instrument may, however, indi cate the source from which the drawee or acceptor may repay himself, without making the payment conditioned upon such fund, or relieving the acceptor of his absolute liability, and the bill will be negotiable. And in the same way a memoran dum showing the nature of the debt which the instrument is to pay may be inserted without affect ing its negotiability. Thus, a memorandum that if the instrument was not paid the insurance policy should be void (Kirk v. Dodge Co., Mut. Ins. Co., 39 Wis., 138); that title should not pass until note was paid (Heard v. Dubuque Bank, 8 Neb., 16), and directing the drawee to "charge the same amount against whatever amount may be due me for my share of fish" (Redman v. Adams, 51 Me., 433) was held not to affect the negotiability of the paper.
When no time is mentioned for payment in the instrument it is construed to be payable imme diately, as if written payable on demand, and the fact that the note is written with interest payable annually will not change this construction. (Jones v Brown, II Ohio St., 601.) And parol testimony cannot be introduced to show that the parties intended a different time. Notes payable when convenient," and the like expressions, are deemed payable in a reasonable time, where they are regarded as negotiable at all. (Lewis v. Tipton, to Ohio St., 88.) And those payable on demand, are considered due immediately without demand. This rule is different though if the instrument is payable a certain number of days after demand, demand is then necessary to fix the time when the instrument is to come due. (Insurance Co. v. Jones, 35 Ohio St., 351.) BE FORE OR ON A GIVEN DATE. In a few decisions a note or bill made payable "on or before" a stated date has been held non-negotiable, but the great majority of decisions declare them to be negotiable. In Mattison v. Marks (31 Mich., 421), Judge Cooley decided such a note to be negotiable, and stated that the legal rights of the holder were clear and certain, the note being due at a time fixed and not before, the maker having a mere option to pay in advance of the legal liability if he saw fit.
Where the note is written, payable "on return of this receipt or note," it is held negotiable, as this provision is not a contingency, but a mere restric tion implied if not expressed in every promissory note, subject to an exception in case the instrument is lost by accident or mistake. (Frank v. Wessels, 64 N. Y. , 158.) But "payable on the return of my guaranty of a certain note" added to a note was held to impose a condition not implied by law, and to make the note non-negotiable. (Blood v. Nor thrup, 1 Kan., 29).
The provision in notes payable in part payments or installments, to the effect that if any one of the installments is not paid as agreed, all installments, or the whole sum shall become due and payable, does not destroy the negotiability of the note, and such notes are quite common. The provision that the interest shall be paid at stated intervals, and if not paid the entire sum shall become due, is also common, and does not affect the negotiability of the paper.
Notes made payable at a certain date or time, and not written "on or before" the time, are not due until the time has arrived, and the , holder may refuse to receive payment sooner. Building asso ciations are required by statute in sonic States to release notes before due upon stated terms. (Rev. Stat. Ohio, Sec. 3836-3).