Ernst v. Steckman

• Citation: 74 Pa. 13
• Parties: Ernst and Godshalk <I>versus</I> Steckman.
• Decision Date: 02 July 1873
• Court: Pennsylvania Supreme Court

Page 13

74 Pa. 13

Ernst and Godshalk versus Steckman.

Supreme Court of Pennsylvania.

May 5, 1873.

July 2, 1873.

May 5th 1873.

Before READ, C. J., AGNEW, SHARSWOOD and MERCUR, JJ.

Error to the Court of Common Pleas of Lancaster county: No. 45, to May Term 1873.

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G. Nauman and H. M. North (with whom were R. W. Shenk and N. Ellmaker), for plaintiff in error.—The contingency as to the source of payment mentioned in the note destroyed its negotiability: Overton v. Tyler, 3 Barr 346. So the contingency as to the time of payment: Alexander v. Thomas, 16 Ad. & E. 333.

S. R. Reynolds, for defendant in error.—The promise to pay in twelve months is positive and unconditional, and is unaffected by the contingency on which it was to be paid sooner: Stevens v. Blunt, 7 Mass. 240; Carter v. Buck, 7 Metc. 588; Jordan v. Tate, 19 Ohio 586; Carlon v. Kenealy, 12 M. & W. 139; Hodges v. Shuler, 22 N. Y. 114; Zimmerman v. Anderson, 17 P. F. Smith 421; Osborn v. Hourly, 19 Ohio 130; Sperry v. Horr, 32 Iowa 134.

The opinion of the court was delivered, July 2d 1873, by MERCUR, J.

This case hinges upon whether the instrument is a negotiable promissory note. It contains language sufficient to make it one. That language is a promise to pay twelve months after date, to the payee named, or bearer, a specific sum of money, for value received. It is contended, however, that it contains too much; that the addition of "or before, if made out of the sale of W. S. Coffman's Improved Broadcast Seeding Machine," changes its character and destroys its negotiability. The addition of some words beyond what are necessary to constitute a negotiable promissory note, does not destroy its character as such. Thus it was held in Zimmerman v. Anderson, 17 P. F. Smith 421, that the addition of "waiving the right of appeal, and all valuation, appraisement, stay and exemption laws," did not destroy its negotiability.

It is urged that the character of this instrument is changed by the fact that in the contingency of the sum being sooner realized from the sale of the machinery, it might become payable within the year.

The general rule, to be extracted from the authorities, undoubtedly requires that, to constitute a valid promissory note, it must be for the payment of money at some fixed period of time, or upon some event which must inevitably happen; that it is not such a note if it purports to make the note depend upon a contingency or uncertainty. Nor is it sufficient that the contingency does in fact happen afterwards, upon which the payment is to become absolute. Its character as a promissory note cannot depend upon future events, but solely upon its character when created: Story on Prom. Notes, § 22. Yet it is an equally well-settled rule of commercial law that it may be made payable at sight, or at a fixed period after sight, or at a fixed period after notice, or on request, or on demand, without destroying its negotiable character. The reason for this, said Lord Tenterden, in Clayton v. Gosling, 5 B. & C. 360, is that it "was made payable at a time which we must suppose would arrive."

In Jordan v. Tate, 19 Ohio 586, it was ruled that the negotiable character of a promissory note is not affected by the fact that it is made payable by its terms on or before a future day therein named. Though the maker has the right to pay such note at any time after its date, yet, for all purposes of negotiation, it is to be regarded as a note payable solely on the day therein named.

No case has been cited in which this court has distinctly ruled upon such a form of note, yet we think this decision is in accord with the general sentiment of the legal mind of our state.

In Carter v. Buck, 7 Metc. 588, in addition to language sufficient to give it negotiability, the note proceeded, "it being for property purchased of him in value at this date, as being payable as soon as can be realized of the above amount for the said property, I have this day purchased of said Pero (the payee), which is to be paid in the course of the season now coming." The instrument was...