Court Opinion

ID: 8009887
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:57:00.181387+00
Date Added: 2024-06-11T16:35:47.316827
License: Public Domain

Barclay, J.
The trial court ruled that the note -in controversy was negotiable. This is a vital question in the case and will be first considered.
The objection to its negotiability rests on the úse of the words, “on or before the first day of September, 1885,” in connection with the promise to pay. It is claimed that such language makes the time of payment uncertain and hence destroys its negotiable character.
The law governing such paper is the outgrowth of the usages of commerce. In determining disputed questions in its application it is often useful to recur to the objects and purposes of the law and to observe how-far they may be promoted or defeated by the acceptance of any proposed construction of it. The reason of any law is its life, and a correct conception of its reason is oftentimes essential to a proper understanding of the meaning and tendency of the law itself.
The general statement is frequently met that bills and notes to be negotiable must, among other things, be payable at a time certain. This is assuredly so, and it is not difficult to discern the reason upon which that rule stands.
Commercial paper, in its inception, was a device adopted by merchants and bankers for the ready transfer of credits between distant points. The earliest form of it yet in use was the bill of exchange whose negotiability, according to the custom of merchants, received recognition in the common-law courts, at first reluctantly, but, afterwards, most willingly when its utility in the business world came to be better understood. Promissory notes of certain form were then given by statute in England (3 and 4 Anne, ch. 9), as they now have with us, the same effect and negotiability as inland bills of exchange. R. S. 1889, sec. 733.
*688The leading purpose of such bills was, as their name imports, to facilitate exchanges. They were intended, primarily, as substitutes for money in the transaction of commerce, and, therefore, by the general understanding and usage of those employing them, were closely assimilated to that commodity. Their form, however, permitted the retention of title in the owner in such manner as to avoid some risks of loss incident to the exchange of money itself. These characteristics made such paper extremely useful and popular in commercial dealings, and naturally led the mercantile world to insist on the recognition of its negotiability, which is its most essential attribute. Hence was evolved the legal rule peculiarly favoring innocent purchasers for value before maturity, as well as that requiring certainty in the time of payment, which were already recognized mandates of the customary law of merchants.
■ Having in view the reasons on which these rules are founded, it would seem obvious that a certainty of ultimate payment should not be considered impaired by the intervention of an option, in favor of the maker, to discharge his obligation at an earlier time. The paper still retains a fixed date when the promise to pay must be performed. It is no more uncertain for practical purposes-than a bill drawn, for example, “at.sight,” or “on demand,” neither of which phrases has ever been held to diminish negotiability. Yet, with regard to bills so drawn, the holder exercises the unquestioned option of fixing the time when the direction to pay becomes absolute.
The case does not require us to attempt to formulate any general rule by which the certainty necessary to the negotiability of such paper may be gauged. It is enough for the present to announce the conclusion we have reached, that the note in controversy in this litigation is negotiable. The learned trial judge and court of appeals ruled to the same effect.
*689The remark made in Chouteau v. Allen, 70 Mo. 339, intimating a contrary view, should not be regarded decisive of the question, as the exact case here presented was not then considered.
II. The decision of the foregoing point leaves little further to be said.
Under the pleadings the execution of the note and its transfer to plaintiff were admitted. When the latter produced the note it amounted to evidence tending to prove that it had been acquired before maturity and for value.
When plaintiff rested, defendant, by his own evidence, established that plaintiff had purchased the note without notice of any failure of consideration, before maturity. Thereafter defendant’s offer to prove the failure of consideration was properly rejected. It was irrelevant to the issues made by the pleadings in view of the facts already before the court as disclosed by the proofs of both parties. In that state of the case the court correctly directed the jury to return a verdict for plaintiff on the undisputed facts.
The judgment of the court of appeals and of the circuit court are hence affirmed,
all the judges agreeing.