51. Indications as to mode of reimbursement.-The statement as to a particular fund in a bill, however, will not vitiate it, if inserted merely as an indication to the drawee how to reimburse himself, or to show to what account it should be charged. Thus, where the bill said, "and charge the same against whatever amount may be due me for my share of fish," it was held a mere indication of the means of reimbursement, and the payment not limited to the proceeds of the fish.1 So, where A. B. directed the defendant in writing to pay the plaintiff or order £9 10s, “as my quarterly half-pay, to be due from 24th of June to 27th of September next, by advance," the court held it a good bill, saying, "The mention of the half-pay is only by way of direction how he shall reimburse himself, but the money is still to be advanced on the credit of the person." So it was held where the expression used was, "pay A. L., or order, it will be in full of a certain judgment." And so where there is a memorandum in the instrument that it is "secured according to the condition of a certain mortgage" or that it was "given in consideration of a certain patent right; or "as part pay for a piano-forte," or for any other consideration," or "and the same will be credited in your joint note to me."" The statement that collateral security has been deposited for the performance of the promise contained in the bill or note is a recital only, which

'Redman v. Adams, 51 Me., 433; Corbett v. Clark, 45 Wise, 407; Edwards on Bills, 144; see §§ 41, 797.

* Macleod v. Snee, 2 Stra., 762; 2 Ld. Raym., 1481.

Ellett v. Britton, 6 Tex., 229.

Littlefield v. Hodge, 6 Mich., 326; Howry v. Eppinger, 34 Mich., 29. In this case the note contained the memorandum "secured by mortgage." Held not to affect it. See Roberts v. Jacks, 31 Ark., 597; Duncan v. Louisville, 13 Bush (Ky.), 385; Kelley v. Whitney, 45 Wisc., 110.

* Hereth v. Meyer, 33 Ind., 511. See post, § 797.

Preston v. Whitney, 23 Mich., 260; Wright v. Irwin, 33 Mich., 32; Mott v, Havana N. B., 22 Hun., N. Y., 354; Newton Wagon Co. v. Dyers, 10 Neb., 284 Collins v. Bradbury, 64 Me., 37; see §§ 41, 797.

'Adams v. Boyd, 33 Ark., 33.

does not affect its negotiability; and though the recital contain the terms of the deposit, that does not alter the case, for it renders neither the amount, the time of pay ment, the payee, nor the engagement to pay uncertain.*

§ 52. The rule seems to be that if the memorandum or collateral agreement impairs the essential characteristics of certainty necessary to negotiable paper, it destroys its negotiability, but otherwise not. A promise to pay S. or order $1,000, or upon surrender of "this note," to issue stock for the same, does not violate this rule, and is a good note, the option to receive the stock being entirely with the payee.' And the like view applies to a note payable in money, or in goods on demand, the election to take the goods or no resting with the payee. So it was held in Wisconsin that a note, otherwise negotiable, was not therein affected by the fact that it contained a memorandum that, if the maker failed to pay it at maturity, the whole amount of the premium on a policy of insurance, for which it was given, should be considered earned, and the policy void. And so in Nebraska where a note was given for an agricultural implement, the condition in the note that title to the implement should not pass until the note with interest was paid, was held not to affect its negotiability."

The negotiability of a promissory note payable to order is not restrained by the circumstance of its being given for the purchase of real property in Louisiana, and the notary

'Wise v. Charlton, 4 A. & E., 786; Fancourt v. Thorne, 9 Q. B., 312; Hassoullier v. Harkenck, 7 T. R., 733.

2 Towne v. Rice, 122 Mass., 67; Arnold v. Rock River, etc., R.R., 5 Duer, 207 Heard v. Dubuque County Bank, 8 Neb., 16. In Mott v. Havana Nat. Bank, 22 Hun. (N. Y.), 354, the note was expressed on its face to be "in part payment for a portable engine, which engine shall be and remain the property of the owner of this note until the amount hereby secured is paid." Held negotiable. In Perry v. Bigelow, 128 Mass., 129, the note contained a memorandum authorizing the collateral to be sold. Held negotiable. See §§ 108, 110, 797.

Hodges v. Shuler, 22 N. Y., 114.

Hosstater v. Wilson, 36 Barbour.

Kirk v. Dodge County Mutual Ins. Co., 39 Wisc., 138.

• Heard v. Dubuque County Bank, 8 Neb., 16.

.

before whom the contract of sale was executed writing upon it the words, "ne varietur," according to the laws and usages of that State, and others governed by the civil law.'

SECTION IV.

CERTAINTY AS TO THE AMOUNT TO BE PAID.

§ 53. In the fourth place, the amount to be paid must be certain. Therefore, the instrument is not negotiable if it engages to pay a certain sum "and all other sums which may be due," as the aggregate amount is not capable of definite ascertainment. So, if it be for a certain sum "and whatever sum you may collect of me for C."; or if it be for "the proceeds of a shipment of goods, value about £2,000, consigned by me to you";" or "the demands of the sick club in part of interest ";" or "a certain sum, the same to go as a set-off"; or if it be expressed, "deducting all advances and expenses"; or if it be for "$800 and such additional premium as may be due on policy No. 218,171."9 But, id certum est quod certum reddi potest, and if the amount can be ascertained from the face of the paper, the form of expression is immaterial. 10 Therefore a promise to pay bearer a certain sum per acre for so many acres as a certain tract contained, was held to be a note as soon as the number of acres was indorsed upon it.11

8

§ 54. Bills and notes payable with exchange.—If there be added to the amount "with current exchange on an

1 Fleckner v. Bank of U. S., 8 Wheat., 338.

' Gaar v. Louisville B. Co., 11 Bush (Ky.), 180; Parsons v. Jackson, 99 U.S. (9 Otto), 440.

4

Legro v. Staples, 16 Me., 252; Lime Rock F. & M. Ins. Co. v. Hewitt, 60 Me., 407.

19 Parsons v. Jackson, 99 U. S. (9 Otto), 440; see Vol. II., § 1496a.

" Smith v. Clopton, 4 Tex., 109.

other place," the commercial character of the paper is not impaired, as that is capable of definite ascertainment.1 Exchange is an incident to bills for the transmission of money from place to place. Its nature and effect are well understood in the commercial world, and merchants having occasion to use their funds at their place of business, sometimes make the currency at that point the standard of payments made to them by their customers at a different point. Exchange preserves the equivalence of amounts in value, and does not introduce such an element of uncertainty as destroys the negotiability of the bill or note which embodies it in its terms. But there are cases which hold that an agreement to pay exchange destroys the negotiable character of the paper, and renders it a special promise requiring proof of consideration. Where there is such an addition to a bill or note, payable where it is drawn, it is clear that it might be rejected as surplusage, there being in such case no exchange.*

54a. It has been urged that an instrument payable "with exchange" on another place, can not be regarded as a bill or note: (1), Because the fluctuations in the rate of exchange make it impossible to ascertain the amount payable when the bill is issued; and (2), Because, if this

1 Smith v. Kendall, 9 Mich., 241; Leggett v. Jones, 10 Wisc., 34; Grutacup v. Woulloise, 2 McLean, 581; Price v. Teal, 4 McLean, 201; Johnson v. Frisbie, 15 Mich., 286; Smith v. Kendall, 9 Mich., 242; see also Bullock v. Taylor, 39 Mich., 137; First N. B. v. Dubuque S. R.R., 52 Iowa, 378 (semble); Morgan v. Edwards, S. C., of Kansas, Dec. 1881, (reported in Central L. J., Jan'y 13, 1882, vol. 14, p. 33); Bradley v. Lill, 4 Bissell, 473. See Pollard v. Herries, 3 B. & P., 335, where a paper "payable in Paris, or, at the choice of the bearer, at the Union Bank in Dover, or at H.'s usual residence in London, according to the course of exchange upon Paris," was declared on and treated as a promissory

note.

Smith v. Kendall, 9 Mich., 242.

3 Low v.

Bliss, 24 Ill., 168; Read v. McNulty, 12 Rich. (Law), 445. In Russell v. Russell, 1 McArthur, 263 [1874], it was held that a note made and payable in Michigan, "with current exchange on New York," was not negotiable, the court regarding the sum as uncertain, so that an indorsee could not sue in his own name. Philadelphia Bank v. Newkirk, 2 Miles, 442.

⚫ Clauser v. Stone, 29 Ill., 116; Hill v. Todd, 29 Ill., 103; Biles on Bills (Sharswood's ed.), 73.

were not so, evidence dehors the instrument would be necessary to ascertain the amount due at maturity.1 The words of the rulings as to the requisites of negotiable instruments would lead to these conclusions, and the doctrine of the text has been declared "a slight modification of the general rule." 2 But reply may be made that instruments. payable with exchange have been generally treated as commercial instruments by the business world and the courts; 3 that a fair construction of the statute of Anne, upon which many of the modern statutes are modelled, and which has been deemed by some of the courts only declaratory of the common law, does not necessarily impeach as a note an instrument so payable; and that the spirit of the rule requiring precision in the amount of negotiable instruments applies rather to principal amount than to the ancillary and incidental additions of interest or exchange.*

4

'Leggett v. Jones, 10 Wisc., 35.

In Morgan v. Edwards, S. C. of Wisconsin, Dec., 1881, reported in Central L. J., Jan. 13, 1882, Vol. 14, p. 35, the court said, per Lyon, J., though the precise question was not before it: "A note is payable in lawful money of the United States, which is at par in every portion of the country. If a note is made payable in Milwaukee with exchange on New York, it requires precisely the same sum of money to pay it as would be required had it been made payable in New York. The exchange is the cost of drawing a bill and transmitting the money to New York to meet it. In Leggett v. Jones, the note was payable at the Dodge County Bank with exchange on New York. Had the note been made payable in New York, no one would claim that there was any uncertainty in the amount, although the maker would necessarily have been subjected to the expense, uncertain in amount, of providing funds there to meet it. It is precisely that expense which constitutes and governs the cost of exchange. Hence, the same sum of money which would have been required to pay the note in New York, would have paid it at the Dodge County Bank, including the exchange, according to its terms. In speaking of the cost of exchange, we refer only to transactions in money. Nominally, the cost of exchange may include the discount on the ordinary currency of the place where the bill is drawn, at the place of payment, and such discount may greatly fluctuate. But a note payable with exchange is not affected by those facts, for it can not be payable in anything but money (unless by virtue of some special statutory provision) and still be a note. There can be no discount on money to affect the cost of inland exchange. Hence, it may well be said, that the uncertainty in the amount due on a note which stipulates for the payment of exchange between two points, is rather apparent than real and substantial." "Current rate of exchange to be added," is entirely indefinite. See Palmer v. Fahnestock, 9 Up. Can. C. P., 172; Saxton v. Stevenson, 23 Up. Can. C. P., 503; Cazet v. Kirk, 4 All. N. B., 543; Nash v, Gibbon, 4 All. N. B., 479.