Section 1. Short title.-This act shall be known as the negotiable instruments law (a). (a) The law is confined to negotiable instruments. No attempt is made to deal with instruments which are non-negotiable; and they are not governed by the statute. In determining whether the rules of the statute will apply to any particular instrument, it is first necessary to ascertain whether such instrument is negotiable, according to the terms of the statute. In many instances the rules will be the same for instruments of either kind; but that is not because instruments which are non-negotiable are governed by the statute, but because the statute is a codification of common law rules which before its adoption applied equally to both classes of instruments. In other words, a negotiable instrument is governed by the statute and a non-negotiable instrument by the rules of the common law, though frequently these rules will be the same. For example, if a note drawn payable at a bank contains terms which render it non-negotiable, the provision of section 87, that "where the instrument is made payable at a bank it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon," would not apply; but the case would be governed by the rule of the common law, which is the same as the statutory rule in some of the States, but different in others. This distinction must be carefully borne in mind, or much confusion will result. § 2. Definitions and meaning of terms.—In this act, unless the context otherwise requires: 66 Acceptance" means an acceptance completed by delivery or notification. "Action" includes counter-claim and set-off. Bank" includes any person or association of persons carrying on the business of banking, whether incorporated or not. "Bearer" means the person in possessio.1 of a bill or note which is payable to bearer. "Bill" means bill of exchange, and "note" means negotiable promissory note. "Delivery" means transfer of possession, actual or constructive, from one person to another. "Holder" means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof. "Indorsement" means an indorsement completed by delivery. "Instrument" means negotiable instrument. 66 Issue" means the first delivery of the instrument, complete in form, to a person who takes it as a holder. "Person" includes a body of persons, whether incorporated or not. "Value" means valuable consideration. § 3. Person primarily liable on instrument.—The person "primarily" liable on an instrument is the person who by the terms of the instrument is absolutely required to pay the same. All other parties are "secondarily" liable (a). (a) This section is to be construed in connection with section 37, which provides that " no person is liable on the instrument whose signature does not appear thereon;" and also with section 211, which provides that "the drawee is not liable on the bill unless and until he accepts the same;" and with section 325, which provides that "the bank is not liable to the holder unless and until it accepts or certifies the check." These are not, by the terms of the instrument, absolutely required to pay the same until such acceptance or certification. § 4. Reasonable time, what constitutes.-In determining what is a "reasonable time" or an "unreasonable time," regard is to be had to the nature of the instrument, the usage of trade or business (if any) with respect to such instruments, and the facts of the particular case (a). (a) Where the facts are doubtful or disputed, the question of reasonable time is a mixed question of law and fact. But when the facts are clear and undisputed, the question is one of law for the court. Prescott Bank v. Coverly, 7 Gray, 217; Gilmore v. Wilbur, 12 Pick. 124; Holbrook v. Burt, 22 Pick. 555; Northwestern Coal Co. v. Bowman, 69 Iowa, 153; Aymar v. Beers, 7 Cow. 705; Tomlinson Carriage Co. v. Kinsella, 31 Conn. 273. § 5. Time, how computed; when last day falls on holiday. Where the day, or the last day, for doing any act herein required or permitted to be done falls on Sunday or on a holiday, the act may be done on the next succeeding secular or business day (a). (a) As to the mode of computing time, see the New York Statutory Construction Law (§§ 26, 27). § 6. Application of chapter.—The provisions of this act do not apply to negotiable instruments made and delivered prior to the passage hereof (a). (a) The time when the statute was to take effect is provided for by section 341. In New York this was October 1st, 1897. But while the law did not go into effect until then, its application is not limited to instruments made after that date. An instrument made and delivered after the passage of the act was equally within its operation after October 1st. For example, if a note payable four months after date was dated and delivered on July 15th, 1897, it must, at maturity, have been presented for payment in the manner prescribed by the statute; and if dishonored, the statutory rules as to giving notice of dishonor must have been complied with. But in the case of a note dated and delivered April 15th, 1897, and payable six months after date, none of the provisions of the statute apply. -- § 7. Law merchant; when governs. In any case not provided for in this act the rules of the law merchant shall govern (a). (a) It is to be observed that the rules governing in such cases are not those which existed by virtue of a statute. All prior statutes upon the subject of bills and notes are repealed; and where a case arises which is not provided for in the Negotiable Instruments Law, it is not to be determined by resort to any of the former statutes, but by reference to the rules of the law merchant. ARTICLE II.* FORM AND INTERPRETATION. Section 20. Form of negotiable instrument. 21. Certainty as to sum; what constitutes. 23. Determinable future time; what constitutes. 24. Additional provisions not affecting negotia bility. 25. Omissions; seal; particular money. 26. When payable on demand. 27. When payable to order. 34. Incomplete instrument not delivered. 35. Delivery; when effectual; when presumed. name. 38. Signature by agent; authority; how shown. 39. Liability of person signing as agent, et cetera. 40. Signature by procuration; effect of. 41. Effect of indorsement by infant or corporation. 42. Forged signature; effect of. * The numbers of the sections of this article in other States than New York are as follows: Colorado, Connecticut, District of Columbia, Florida, Massachusetts, North Carolina, North Dakota, Pennsylvania, Oregon, Tennessee, Utah, Virginia, and Washington, 1-23; Maryland, 20-42; Rhode Island, 9-31; Wisconsin, 1675-1 to 1675-23. § 20. Form of negotiable instrument.-An instrument to be negotiable must conform to the following require ments: I. It must be in writing (a) and signed by the maker or drawer. 2. Must contain an unconditional promise (b) or order to pay a sum certain in money (c); 3. Must be payable on demand (d), or at a fixed or determinable future time (e); 4. Must be payable to order (f) or to bearer (g); and 5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty (h). (a) The writing may be in pencil. Brown v. Butchers' Bank, 6 Hill, 443. (b) See section 22. (c) This is the rule of the law merchant, and the rule which prevails in most of the States. In some States-as, for example, in Iowa and Georgia-certain instruments are declared by statute to be negotiable, though they provide that payment is to be made in goods or merchandise. See also section 25, subdivision 5. In New York warehouse receipts issued by certain corporations are declared to be negotiable. See Hanover Nat. Bank v. American Dock and Trust Co., 148 N. Y. 612; Corn Exchange Bank v. Same, 149 N. Y. 174. The act does not repeal these statutes. (d) See section 26. (e) See section 23. (f) See Section 27. The North Carolina Act reads: "Must be payable to the order of a specified person or bearer." The words specified person" are surplusage, since by section 27 this is declared to be the effect of the term "order." 66 (g) Yingling v. Kohlhass, 18 Md. 148; Curtis v. Hazen, 56 Conn. 146. If the instrument is payable to a particular person, and not to his order or to bearer, it is not negotiable. Backus v. Danforth, 10 Conn. 297. As to bonds payable to bearer and coupons, see Carr. v. Leferre, 27 Pa. St. 413; County of Beaver v. Armstrong, 44 Pa. St. 63; National Exchange Bank v. Hartford etc. R. R. Co. 8 R. I. 375. As to Treasury notes, see Frazer v. D'Quilliers, 2 Pa. St. 200. See section 28. |