Maryland Fertilizing & Manufacturing Co. v. Newman

Alvey, J., delivered the opinion of the Court. The plaintiff in this case sues as indorsee of what is. alleged to be a negotiable promissory note made by the ⁵⁸⁵ defendant, and the question is whether the instrument sued on is, in legal contemplation, a negotiable instrument or not. The q uostion was raised in the Court below by a demurrer to the declaration; and the declaration avers that the defendant, on the 29th of Sept. 1880, by his promissory note, payable two months after date, promised to pay David C. Avery, or order, $93 ; payable at the Easton ^National Bank of Maryland ; and if not paid when due, promised and agreed to pay all costs and charges for collecting the same, with interest; and that the said Avery indorsed the said note to the plaintiff, and the same was duly presented when due for payment, and was dishonored, etc. The Court below ruled the demurrer good, and entered judgment for the defendant, from which the plaintiff appealed. A promissory note may, in brief,be defined tobo a written promise, not under seal, to pay a certain sum of money unconditionally.

At common law such note was not transferable, and by the decision of the Courts it was not allowed to acquire, by custom among merchants, the quality of negotiability. Buller vs. Cripps, 6 Mod., 29; Clerk vs. Martin, 2 Ld. Raym., 757. But by the Stat. 3 & 4 Anne, ch. 9, it was provided “that, all notes in writing that shall be made and signed by any person, &c., whereby such person, &c., shall promise to pay to any other person, his, her, or their order, or unto bearer, any sum, of money mentioned in such note, shall be taken and construed to be, by virtue thereof, duo and payable to any such person, &c., to whom the same is made payable;. and also every such note payable to any person, &c., his, her, or their order, shall be assignable or indorsable over, in the same manner as inland bills of exchange are or may be, according to the custom of merchants.” The statute further provides that actions may be maintained on such notes by the payees, or the indorsees thereof^ “in like manner as in cases of inland bills of exchange.” By the statute, therefore, such promissory notes ⁵⁸⁶ are made commercial instruments, and when they are made payable to order or to bearer, they are indorsable and transferable as commercial paper, and are placed upon the same footing of inland bills of exchange.

Bowie vs. Duvall, 1 G. & J., 175 . It is true, no particular form' of words is essential to •constitute a valid promissory note or bill of exchange. But there are certain essential elements that every valid promissory note must contain, and the principal among these is a promise to pay a certain sum of money unconditionally. If the note be wanting in this respect, while it may be a valid specific agreement, and assignable under the provisions of the Code, it cannot be treated as a valid negotiable promissory note to be passed by indorsement.

It is •of great importance to the use and office of such commercial negotiable instruments as bills and notes, that they should be kept free of all conditions, and singular and unusual stipulations, such as we find on the face of the note in question, whereby their negotiability might be ■seriously clogged or impeded. It would appear to be the requirement of the statute, as well as of the long established custom of merchants, that the note, to be negotiable, should be certain and unconditional, and not be trammelled by conditions or contingencies of any kind. In the note declared on in this case, the stipulation for the payment of all costs and charges incurred in the collection of the note, introduces an element of uncertainty quite inconsistent with the degree of certainty required as to the sum to he paid. The costs and charges of collection could never, with accuracy, be known until the collection had been made complete ; and hence, by coupling the certain sum mentioned in the note with that which is uncertain, and treating the note as an entire contract, it is for an unascertained sum, and therefore uncertain on its face as to the amount promised to be paid.