Adams v. Seaman

McFarland, J. This action was brought by plaintiff upon what he alleges to be a negotiable promissory note made.by defendant Seaman to the order of one O. S. Hub-bell, and indorsed and assigned by Hubbell to plaintiff before maturity. Seaman, in his answer, pleads as set-off certain debts due him from Hubbell before the assignment. Plaintiff demurred to this part of the answer, and his demurrer was overruled. After trial, the court allowed certain of these set-offs, and gave judgment for plaintiff only for the balance due on the note, after deducting the set-offs. Plaintiff appeals from the" judgment. The only question presented is, Was the instrument sued on a negotiable note?

The instrument would be negotiable, and in the hands of an indorsee before maturity not subject to any equities of the maker against the original payee, if it did not contain the following clause: “ Should suit be commenced or an attorney employed to enforce the payment of this note, I agree to pay the additional sum of five per cent on principal and interest accrued as attorney’s fees in such suit.” The court below held that this clause rendered the note non-negotiable-; and we think that the court was right in so holding.

When one man promises to pay money to another in the future, if he puts that promise in the form of a negotiable paper, he gives to the promise characteristics which do not belong at all to ordinary indebtedness. If A merely promises—either orally or by common writing [638]—to pay B one thousand dollars at the expiration of ten months, and during that time B becomes indebted to A on other transactions in the sum of five hundred dollars, the latter sum can be set off against the former; and it can be so set off against an assignee of B if it accrued before notice of assignment. But if the promise be made in the shape of a negotiable promissory note, then, if B indorse the note before the expiration of the ten months to a third party, the latter can compel A to pay him the whole amount of the note, no matter how many set-offs he may have against B. In order, however, for this to be so, the note must clearly comply with the requisites of negotiable paper. And one of the main requisites— in addition to negotiable words, such as payable “to order” or “bearer”—is absolute certainty as to the amount of money to be paid, a certainty which must appear on the face of the instrument. No part of the amount must depend on any contingency which may or may not happen, or upon the proof of any fact other than the genuineness of the instrument itself.