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The definition makes no change in the law as to what is a promissory note, except that in Nova Scotia and New Brunswick notes payable otherwise than in money, which, under provincial Acts, were, in certain respects, placed on the same footing as promissory notes payable in money, and were generally called promissory notes, will no longer be so considered. A note payable to a specified person and not to his order, or to bearer, was considered a promissory note before the Act but was not negotiable. It is now negotiable: sections 8 and 88.
“Unconditional promise.”—The maker of a note is deemed to correspond with the acceptor of a bill: section 88. A bill is an unconditional order, but the acceptance may be conditional : section 19. There is consequently this difference, that while the undertaking of the acceptor may be only conditional, that of the maker of a note is unconditional, and corresponds with the position of an unconditional acceptor.
“In writing.”—As to what is a writing, see p. 36.
“One person to another."—While there are three parties to a bill of exchange, the drawer, the drawee, and the payee, there are only two necessary parties to a promissory note, the maker and the payee.
“Signed."-As to what is a signature under the Act, see pp. 39 to 41. Where a person signs, as agent or in a representative character, it is often a matter of dispute whether he is personally liable. See pp. 160 to 166.
“On Demand” etc.— A note is payable on demand which is expressed to be so payable, or in which no time for pay. ment is expressed : sections 10 and 88. A note is payable at a fixed or determinable future time which is expressed to be payable at a fixed period after date, or on or at a fixed period after the occurrence of a specified event which
is certain to happen, though the time of happening is $ 82. uncertain: sections 11 and 88. See notes and illustrations under the former of these sections.
“A sum certain in money."-See pp. 41 to 45; also section 9 and the notes and illustrations thereunder.
“Specified person.”—The person to whom or to whose order a note is made payable is called the payee. If the note is not payable to bearer, he should be named or otherwise indicated with reasonable certainty: section 7. See
“Bearer.”—Most of the companies incorporated under Imperial, Dominion or Provincial Charters are prohibited from issuing a note payable to bearer. See pp. 131 to 136; also 54 Vict. c. 35 (Que). All persons except chartered banks are prohibited under a penalty of $400 from issuing notes payable to bearer, intended to circulate as money: Bank Act, 53 Vict. c. 31, s. 60.
No particular form of words is required to constitute a valid note, provided the instrument meet the requirements of the definition: Hall v. Bradbury, 1 Rev. de Leg. 180 (1845); Hooper v. Williams, 2 Ex. at p. 20 (1848). But a promissory note, as between the original parties at least, is something which they intend to be a promissory note: Sibree v. Tripp, 15 M. & W. at p. 29 (1846). If an instrument is ambiguous and it is uncertain whether it was meant to be a bill or note, the holder may treat it as either at his option: Edis v. Bury, 6 B. & C. 433 (1827); Fielder v. Marshall, 9 C. B. N. S. 606 (1861). The construction most favorable to the validity of the instrument will be adopted : Mare v. Charles, 5 E. & B. at p. 981 (1856).
If an instrument is in the form of a bill, and the drawer and the drawee are the same person, or the drawee is a fictitious person or one not having capacity to contract, it may be treated as a note by the holder: section 5, 6-8, 2.
See illustrations ante pp. 42, 47, 48, 60 61, 77 and 84.
The following instruments have been held not to be valid promissory notes :
1. “Three months after date, pay to the order of T. £228, for value received." Held not to be a note, for want of a promise, and not a bill, because addressed to no drawee : Forward v. Thompson, 12 U. C. Q. B. 103 (1855).
2. An instrument in the form of a note but under the seal of the maker : Wilson v. Gates, 16 U. C. Q. B. 278 (1858).
3. An instrument in the form of a note payable to bearer, but with a condition ; Campbell v. McKinnon, 18 U. C. Q. B. 612 (1859).
4. “Four months after date I promise to pay to W. H. or order $1,264, value received. This note to be held as collateral security. S. J. M.”: Hall v. Merrick, 40 U. C. Q. B. 566 (1877); Sutherland v. Patterson, 4 0. R. 565 (1884).
5. A letter acknowledging receipt of money was a loan, subject to be returned when demanded, with interest": Whishaw v. Gilmour, 6 L. C. J. 319 (1862).
6. A receipt in the following form :-“Received from Mrs. A. a loan of $800, to be returned when required”: DeSola v. Ascher, 17 R. L. 315 (1889).
The following have been held to be valid notes :
7. A church subscription list held to be the several note of each subscriber for the sum opposite his name: Thomas v. Grace, 15 U. C. C. P. 462 (1865).
8. A promise to pay in cash or goods at the option of the holder : McDonnell v. Holgate, 2 Rev. de Leg. 29 (1821); Hosstatter v. Wilson, 31 Barb. (N.Y.) 307 (1862); Dinsmore v. Duncan, 57 N. Y. at p. 573 (1874).
9. An obligation before a notary to pay a certain sum of money without condition : Aurele v. Durocher, 5 R. L. 165 (1878).
10. Municipal Debentures under C. S. L. C. c. 25, payable $ 82. to bearer : Eastern Townships' Bank v. Compton, 7 R. L. 446 (1871); Eastern Townships Bank v. Compton, 7 R. L. 436 (1871); Macfarlane v. Ste. Cesaire, M. L. R. 2 Q. B. 160 (1886).
11. “This is to certify that I, N. K., hereby agree and bind myself to pay to M., or order, $2,000, for all the space from date to close of navigation he has on the A. & B. line of steamers; $1,000 I now pay cash, and $1,000 I bind and pledge myself to pay to M., or order, on or about Nov. 15th, 1883. It is understood that this amount of $2,000 is paid for premium over and above the rate of freight to be paid for said steamers to agents and shipowners"-Held to be a negotiable note: Kennedy v. Exchange Bank, 30 L. C. J. 266 (1886).
12. An instrument in the form of a note written at the foot of a letter which set out the consideration, etc. The fact of the payee having cut off the letter before suing on the note was not a mutilation or alteration of the note :
Palliser v. Lindsay, M. L. R. 6 Q. B. 311 (1890).
13. “I have received the books, which with cash overpaid, amounts to £80, which I will pay in two years ": Wheatley v. Williams, 1 M. & W. 533 (1836).
14. “I promise to pay S. or order, 3 months after date, £100 as per memorandum of agreement : Jury v. Barker, E. B. & E. 459 (1858).
15. “Received from A. B. £30, payable on demand”: McCubbin v. Stephen, 28 Jurist (Sc.) 618 (1856).
The following are recent decisions in Quebec regarding promissory notes :
16. A promissory note given by a debtor to his creditor for the excess of his claim over a composition accepted by the creditors generally is valid as against the maker, in the absence of a statute prohibiting it: Tees v. McArthur, 35 L. C. J. 33 (1891); Racine v. Champoux, M. L. R. 7 S. C. 478 (1890). Contra, Gervais v. Dubé, ibid 91 (1890). See also ante pp. 195, 196, Nos. 6, 9, and 10.
17. Where the maker of a promissory note payable to his own order transferred it for value, but accidentally omitted to indorse it, he is liable to the transferee, and a judgment ordering him to indorse the note would be superfluous. Indorsers pour aval are also liable on it without protest, as it was indorsed and matured before the Bills of Exchange Act came into force: Coutu v. Rafferty, M. L. R. 7 S. C. 148 (1891). See ante p. 210.
18. Where defendant claimed he was an ordinary indorser of the note sued on, and not an indorser pour aval as claimed by plaintiff, the English rules of evidence apply, and under the authority of Macdonald v. Whitfield, 8 App. Cas. 733, he may prove by parol the circumstances under which the note was indorsed : Northfield v. Lawrance, M. L. R. 7 S. C. 148 (1891).
Bank Notes.-Bank notes are promissory notes payable to bearer on demand. They may be issued only by chartered banks, and no note shall be for less than five dollars, or for any sum that is not a multiple of five dollars: 53 Vict. c. 31, s. 51 (Can.). They circulate as cash, are not deemed to be overdue, and are not discharged by coming into the hands of the bank, but may be re-issued. They are not subject to the statutes of limitation or prescription, at least, until after demand and dishonor.
Dominion Notes. These notes issued under R. S. C. c. 31 are in form promissory notes payable on demand, but they do not strictly come within the definition of this section, as the Dominion of Canada, the maker, is not a “person" under the interpretation Act. They have all the qualities of negotiable notes and bank notes, and are besides a legal tender.
Bon or I. O. U.--There were conflicting decisions in England as to whether an I. O. U. was a negotiable instrument. It is now well settled that if the instrument is a