Sec.

ARTICLE III.

PROMISSORY NOTES AND CHECKS.

970. Promissory note defined. 971. Check defined.

972. Check must be presented within reasonable time.

976. Banks liability for non-payment of check 973. Certification equivalent to acceptance. 977. Banks liability on forged or raised check. 974. Acceptance or certification discharges 978. Id. Notice by mail. drawer and indorsers. 979. Banks liability for collections.

Sec. 970. Promissory note defined.-A negotiable promissory note within the meaning of this chapter is an unconditional promise in writing made by one person to another signed by the maker engaged to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or bearer. Where a

note is drawn to the maker's own order it is not complete until indorsed by him. (R. S. 1909, § 10154.)

Historical. This section appears to supersede the previous provision relating to the negotiability of promissory notes contained in R. S. 1899, Sec. 457, and also to supersede the provisions of Sec. 10175, R. S. 1909.

Promissory notes.-This section and applied. Bank v. Ettenson, 172 A. 404, 158 S. W. 448, held, the mere delivery for value of a promissory note drawn to the maker's own order, imparts no cital force to the instrument, but leaves it a nullity in the hands of the holder.

General construction.-Memorandum of indebtedness.

31 Mo. 28.

Brady v. Chandler,

Note payable to maker's order a nullity until negotiated by maker's indorsement. Lowrie v. Zunkel, 49 A. 153.

Instrument construed as note rather than testamentary disposition of property. Maze v. Baird, 89 A. 348.

Notes negotiable in form prima facie import a valuable consideration. v. Sloan, 158 Mo. 411, 57 S. W. 1052.

Cox

Note imports consideration, and burden of proving lack of same is upon maker or payer. Glascock v. Glascock, 217 Mo. 362, 380, 117 S. W. 67; Lowrey v. Danforth, 95 A. 441, 69 S. W. 39.

Under former statute, held that in suit on note petition must allege that same purported to be for value received. Jacobs v. Gibson, 77 A. 244; Crawford v. Johnson, 87 A. 478.

A note payable "with exchange" not negotiable. 368.

Chandler v. Calvert, 87 A.

Possession of promissory note, payable to order and duly indorsed by payee, is prima facie evidence of title in holder. Lowrey v. Danforth, 95 A. 441, 69 S. W. 39; Dawson v. Wombles, 123 A, 340, 100 S. W. 547.

In suit by indorsee, where it was denied that plaintiff was bona fide purchaser for value, the admission of the indorsement of payee in evidence without proof of its authenticity, over defendant's objection, was error. Hugumin & Co. v. Hinds, 97 A. 346, 71 S. W. 479. And an admission of the execution of the note does not constitute waiver of proof of endorsement. Hugumin & Co. v. Hinds, 97 A. 346, 71 S. W. 479.

The words "for value received" are not alone sufficient to constitute a negotiable instrument. Pinnell v. Meaks, 99 A. 20, 23, 72 S. W. 461.

A due bill, while not negotiable, is a promissory note, and imports a consideration. Locher v. Kuechenmiester, 120 A. 701, 98 S. W. 92.

*A note executed by an illiterate man making his mark, in certain circumstances, might require proof that it was read and explained to him. Dawson v. Wombles, 123 A. 340, 345, 100 S. W. 547.

A note delivered after maturity is not an overdue note, but one payable on demand. Johnson v. Bank, 173 Mo. 171, 73 S. W. 191.

An extension of time by a valid agreement discharges the surety. Bank, 173 Mo. 171, 73 S. W. 191.

Johnson v.

Sec. 971. Check defined.-A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this chapter applicable to a bill of exchange payable on demand apply to a check. (R. S. 1909, § 10155.)

Section cited and applied. Savings Bank v. Amer. Trust Co., 199 A. 491, 203 S. W. 674.

"Kiting checks" discussed and defined.-Under this section a bank check is a negotiable instrument and inland bill of exchange and imports a consideration. Fisher v. Bagnell, 194 A. 581, 186 S. W. 1097. In an action on a check it is sufficient to state that it was given in payment of an account stated and it is not necessary to allege how the indebtedness occurred. Nelson v. Diffenderffer, 178 A. 48, 163 S. W. 271.

Sec. 972. Check must be presented within reasonable time. A check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay. (R. S. 1909, § 10156.)

Reasonable time.-Section cited and applied. City of Brunswick v. Bank, 194 A. 360, 190 S. W. 60. Held, where a city presented certified check for payment after three weeks had expired, bank should be allowed to interplead city and drawer of check.

Sec. 973. Certification equivalent to acceptance.—Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance. (R. S. 1909, § 10157.)

Where plaintiff, a city of the fourth class, sued on certified check, under this and other sections, held, that it was not necessary for plaintiff to state facts in his petition showing that the check was received within its restricted powers of contract. City of Weston v. Bank, 192 S. W. 126.

Sec. 974. Acceptance or certification discharges drawer and indorsers.-Where the holder of a check procures it to be accepted or certified, the drawer and all indorsers are discharged from liability thereon. (R. S. 1909, § 10158.)

See notes to preceding sections.

Sec. 975. Check not an assignment of funds and bank not liable until after acceptance or certification.-A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder unless and until it accepts or certifies the check. (R. S. 1909, 10159.)

875.

Section cited and applied. Belgate v. Exchange Bank, 199 A. 583, 205 S. W. Held, a bank certifying a check at the request of the drawer, does not agree that it would pay the check at all events, but only that the amouot thereof would be forthcoming when presented by one lawfully entitled thereto. Prior to the enactment of the negotiable law it was well settled that a check did not operate as an assignment pro tanto to the funds of the drawer in bank and this rule was not changed by statute. Fisher v. Bagnell, 194 A. 581, 186 S. W. 1097.

Sec. 976.

Bank's liability for nonpayment of check.-No bank or trust company shall be liable to a depositor because of the nonpayment through mistake or error and without malice, of a check which should have been paid unless, the depositor shall allege and prove actual damages by reason of such nonpayment and in such event the liability shall not exceed the amount of damages so proved. (Laws 1919, p. 605.)

Sec. 977. Bank's liability on forged or raised check. No bank or trust company which has paid and charged to the account of a positor any money on a forged or raised check issued in the name of said depositor shall be liable to said depositor for the amount paid thereon unless either (1) within one year after notice to said depositor that the vouchers representing payments charged to the account of said depositor for the period during which such payment was made are ready for delivery, or (2) in ca-e no such notice has been given, within one year after the return to said depositor of the voucher representing such payment, said depositor shall notify the bank thatthe check so paid is forged or raised. (Laws 1919, p. 605.)

Sec. 978. Id. Id. Notice by mail.-The notice referred to in the preceding section may be given by mail to said depositor at his last known address with postage prepaid. (Laws 1919, p. 605,)

Sec. 979. Bank's liability for collections. Any bank, banker or trust company, hereinafter called bank, organized under the laws of, or doing business in this state, receiving for collection or deposit, any check, note or other negotiable instrument drawn. upon or payable at any other bank, located in another city or town, whether within or without this state, may forward such instrument for collection directly to the bank on which it is drawn. or at which it is payable and the failure of such payor bank because of its insolvency or other default, to account for the proceeds thereof, shall not, render the forwarding bank liable therefor, provided, however, such forwarding bank shall have used due diligence in other respects in connection with the collection of such instrument. (Laws 1919, p. 605.)

Sec. 980. Definition of terms. In this chapter, unless the context otherwise requires:

"Acceptance" means an acceptance completed by delivery or notification.

"Action" includes counterclaim 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 possession of 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.

ery.

"Indorsement" means an indorsement completed by deliv

"Instrument" means negotiable instrument.

"Issue" means the first delivery of the instrument, complete in form, to a person who takes it as holder.

not.

"Person" includes a body of persons, whether incorporated or

"Value" means valuable consideration.

"Written" includes printed, and "writing" includes print. (R. S. 1909, § 10160.)

Holder. Where the payees of a note indorsed it to a bank for collection, and that bank indorsed it to another and later payees appoint plaintiff trustee to make collection, immaterial how question of right to sue was submitted to the jury, there being the presumption that the payees are the holders. Carter v. Butler, 264 Mo. 306, 174 S. W. 399. Where court found that holder's possession of note was tortious, held, holder not entitled to instruction that his possession of note was prima facie evidence that it had been paid. Brannock v. Jaynes, 197 A. 150, 193 S. W. 51.

"Holder" defined.-Bank v. Rosenbaum, 191 A. 559, 177 S. W. 693. Indorsement.-The indorsement of the name of a corporation by means of a rubber stamp held sufficient "written indorsement." Trust Co. v. Range Co., 196 A. 206, 190 S. W. 1045.

Bearer. "Bearer" construed and held third persons dealing in good faith with the person in possession of a negotiable instrument cannot be held to account by the real owner when bearer was clothed with all the indicia of true ownership by owner. Miller v. Bank, 193 A. 498, 186 S. W. 547.

Sec. 981. Persons primarily and secondarily liable.-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. (R. S. 1909, § 10161.)

Section cited and applied. Long v. Mason, 273 Mo. 266, 200 S. W. 1062; held, accommodation makers are entitled, in an action by the payee upon a negotiable promissory note, to show that, as between them and the maker, they were sureties. By selling certain mortgaged premises the mortgagor does not release himself from his personal or primary liability on a note evidencing a mortgage debt. Haley v. Branham, 192 A. 125, 180 S. W. 423. This section construed in connection with Sec. 906, supra, Bank v. Hanlon, 183 A. 243, 166 S. W. 830; held, a reservation of right of recourse against party secondarily liable cannot be implied from acts or conduct, but must be expressly made. In an action on a promissory note against sureties, where plaintiff bank had assured sureties that it had in its possession sufficient funds of principal debtor to satisfy all the claims and extended note without consent of sureties, plaintiff was estopped from asserting defendant's liability. Bank v. Lee, 193 A. 537, 182 S. W. 1016. Defendants executed their note, secured by mortgage, and later sold mortgaged land without notifying purchaser of encumbrance and plaintiff bought the note and took an assignment thereof, held, that the release of the mortgage did not release defendants on the note. Haley v. Branham, 192 A. 125, 180 S. W. 423.

Sec. 982. Reasonable time defined. In determining what is 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 instrument, and the facts of the particular case. (R. S. 1909, § 10162.)

Where a note is indorsed after maturity it becomes a note payable on demand and demand must be made within a reasonable time. The delay of a year would be unreasonable. Bank v. Schmidt, 168 A. 153, 152 S. W. 101.

Sec. 983. Paper falling due on holiday or Sunday. Where the day, or the last day, for doing any act herein required or permitted to be done falls on Sunday or on. a holikay, the act may be done on the next succeeding secular or business day. (R. S. 1909, § 10163.)

Section cited and applied. State v. R. R. Co., 239 Mo. 196, 1.c. 319, 143 S. W. 785: Heid, the law does not ordinarily consider Sunday as dies non; it is never so, considered unless excepted by an express statute, because of the same rule pertaining to proceedings in court, in computing time under the statute, Sunday will be counted, unless expressly excepted.

Sec. 984. This act not retroactive.-The provisions of this chapter do not apply to negotiable instruments made and delivered prior to the passage hereof. (R. S. 1909, § 10164.)

Section cited and applied. Bank v. Schmidt, 168 A. 153, 152 S. W. 101.

Sec. 985. Law merchant to govern, when.-In any case not provided for in this chapter the rules of the law merchant shall govern. (R. S. 1909, § 10165.)

Historical. This section is the last of the sections inlcuded in the original negotiable instrument act of 1905. Cited and applied Long v. Shafer, 185 A. 641, 171 S. W. 690.

Sec. 986.

Damage on bills protested for nonacceptance or nonpayment. When any bill of exchange, expressed to be for