171. Form of receipt.

$3200

Buffalo Jany 13.
Received of Henry M. Anderson Bra

Three Hundred Turnty
In full of account to date!

100

19

Dollars

D.H.Williams

172. Definition of receipt. A receipt is a written acknowledgment of the payment of money or delivery of chattels. It is executed by the person to whom the delivery or payment is made. The receipt must be delivered to the debtor, for a memorandum or payment made by the creditor in his own books is not a receipt.

173. Standing of receipts. The mere acknowledgment of payment made is not treated in law as binding or conclusive. So far as a simple acknowledgment of payment or delivery is concerned it is prima facie evidence only, and is generally open to explanation.

This is an exception to the general rule that parol evidence cannot be admitted to contradict or vary a written instrument. Thus, a party may always show in explanation of a receipt that it was obtained by fraud, or given by mistake, or that as a matter of fact no money was actually paid. It may be shown that a receipt given "in full of account" should read "on account."

QUESTIONS

1. Define a bill of exchange. Define promissory note. Define check. 2. Name the parties to a draft and define each party.

3. Give the form of a promissory note.

4. Give the parties to a promissory note and define each party.

5. Give the form of a check.

6. How does a note and a check differ as to parties?

7. How does a check compare to a draft as to parties?

8. Who are immediate parties?

9. Who are remote parties?

10. Define holder and tell what the term includes.

11. Give the form of a receipt.

12. Define receipt.

13. By whom is a receipt executed?

14. Why must a receipt be delivered to the debtor?

15. Is a receipt conclusive evidence of payment? ·

CHAPTER XV

REQUISITES OF NEGOTIABILITY

174. Essential requisites. Negotiable instruments are contracts of a special character, and there are certain essential things which they must contain, and the absence of any one of them will destroy its negotiable character. These essential characteristics are as follows:

1. The contract must be in writing.

2. Must be payable absolutely and without contingencies. 3. The draft must contain a certain direction, and the note a certain promise to pay.

4. Negotiable words.

5. Certainty as to amount.

6. Certainty as to time.

7. For the payment of money only.

8. Delivery.

175. The contract must be in writing. Rule: All negotiable contracts must be in writing and signed.

An oral promise is valid at common law but could not be considered negotiable under the Law Merchant. The writing may be on any ordinary writing material and either with ink or pencil.

176. Must be payable absolutely and without contingencies. Rule: An instrument made payable on the happening of an uncertain event or contingency is not negotiable, and the happening of the event does not cure the defect.

But if the contingency is one which is sure to happen, that is the time made certain, though no one can tell when, it does not destroy its negotiability. "Pay C, or order $100.00 ten days after the death of D," is negotiable, because the death of D is sure to take place, although the precise time is not known. "Pay C, or order when I marry D," is not negotiable, because

it is not certain that the event will ever happen. If the amount is made payable out of a certain fund the instrument is nonnegotiable. This is because the uncertainty of the particular fund makes the promise conditional.

177. The draft must contain a certain direction and the note a certain promise to pay. A draft is not asking a favor. The direction to the drawee must be imperative. "Please let the bearer have $100.00, and you will much oblige me," was held to be invalid. A promissory note may be in any form of words from which a promise may be implied. There must, however, be something more than mere acknowledgment of indebtedness. The following are not notes, but mere evidences of indebted

ness:

1. Due C $100.00, value received.

2. I. O. U. $100.00.

3. I owe you $100.00, to be paid September 1, 1895. 4. Due C, or order, on demand, $100.00.

178. Negotiable words. Rule: Negotiable words are "order" or "bearer." They are not essentially requisite to validity of draft or note, but are necessary to make them negotiable.

If the draft or note be payable to A, or order, it is payable to him or to the person to whom he orders it to be paid. He may transfer his rights, and even better right than he possessed, to a third party by endorsement and delivery. If made payable to A, or bearer, he may transfer the right and title to the paper by mere delivery in the same manner as he would transfer the right or title to a book or other personal property the possession of which is prima facie evidence of ownership. When the word "order" is used the name of the payee must also appear, but if the word "bearer" is used the payee's name may or may not appear. The expression "pay to the order of A" is the same as "pay A, or order," but the expression "pay to the bearer A" is not negotiable, unless made so by statute.

179. Certainty as to amount. Rule: The sum payable must be certain and definite, or capable of being made certain. The sum is certain, although it is to be paid:

1. With interest; or,

2. By stated installments; or,

3. By stated installments, with a provision that upon default in payment of any installments or of interest the whole shali become due; or,

4. With exchange, whether at a fixed rate or at the current

rate; or,

5. With costs of collection or an attorney's fee in case payment shall not be made at maturity. As to clauses which contain a stipulation that the maker shall pay costs and attorney's fees, there has been much conflict in the decisions. The rule adopted is the one sustained by the weight of authority. The courts which have sustained this rule have taken the view that so long as the amount payable is certain up to maturity and dishonor, it is not essential after that time, when it has become non-negotiable for other reasons, that the certainty as to the amount should continue.

The following are not negotiable, because they are at variance with the rule:

1. Pay C, or order, $100.00 and all other sums which may be due him.

2. Pay C, or order, the proceeds of shipment of goods, value $2,000.00, consigned by me to you.

The following are negotiable:

1. A promise to pay $40.00 per acre for the X lot of land becomes valid when the number of acres is endorsed thereon. 2. A promise to pay $100.00, with interest, on or before, January 1, 1899.

180. Certainty as to time. Rule: An instrument in order to be negotiable must be payable at a determinable future time. This may be:

1. On demand.

2. At a fixed period after date or sight.