Different Forms Of Notes

( Originally Published 1918 )

Form of Non-negotiable Note

$100.00 Boston, Mass., March 24, 19-. Thirty days after date I promise to pay John Jones One Hundred Dollars, value received.


Negotiable Without Indorsement

$100.00 Madison, Wis., Jan. 2, 19-.

Sixty days after date I promise to pay John M. Smith or bearer, One Hundred Dollars, value received.


Negotiable by Indorsement

$100.00 Poultney, Va., Mar. 31, 19-.

Ninety days after date I promise to pay to George Nelson or order, One Hundred Dollars, value received.


Payable at Bank

$100.00 Chicago, Ill., May 2, 19-.

One year after date, for value received, I promise to pay Oliver Brown or order, at the First National Bank, One Hundred Dollars, with interest at six per cent per annum.


On Demand

$50.00 Denver, Colo., Jan. 2, 19-.

On demand, for value received, I promise to pay to the order of John Riley, Fifty Dollars, with interest.


Acccommodation Note

$100.00 Toledo, O., March 10, 19—.

Sixty days after date I promise to pay to the order of Aimer Wilson, One Hundred Dollars, at the First National Bank, without defalcation. OWEN YATES.


Where an instrument containing the words "I promise to pay" is signed by two or more persons, they become jointly and severally liable for its obligations. That is, all of them together, or any one of them, may be liable in full.

Anyone signing a note as an accommodation is liable to any holder for its full value. This liability remains even if the holder knows that there was no consideration.

A note given by a corporation must be signed with the name of the corporation and by the duly authorized officers of the corporation.

Definition.-An indorsement is a writing on the back of a note or other written instrument.

Where a signature is so placed as to raise a doubt as to how the individual intended to sign, he is to be considered an indorser.

What Is Sufficient.—Though it is usual and better to write the indorsement in ink on the back of a note, it is legally sufficient if written with either pen or pencil upon any part of the instrument, or upon a paper attached thereto. The signature of the indorser, without additional words, is a sufficient indorsement.

Kinds of Indorsements.—An indorsement may be either special or in blank, and it may also be either restrictive, qualified, or conditional.

An Indorsement in Blank specifies no indorsee, and an instrument so indorsed is payable to bearer, and may be negotiated by delivery. (See Form 1.)

A Special Indorsement (sometimes called a full indorsement) specifies the person to whom or to whose order the instrument is to be payable; and the indorsement of such indorsee is necessary to the further negotiation of the instrument. (See Form 2.)

A Qualified Indorsement constitutes the indorser a mere assignor of the title to the instrument. It may be made by adding to the indorser's signature the words "without recourse," or any words of similar import. Such indorsement does not impair the negotiable character of the instrument. (See Form 3.)

An Indorser May Avoid Liability by writing "without recourse" on the back of the note with his signature.

Liability of Indorsers.—All the persons who have indorsed a note are liable for the amount clue; but only one satisfaction can be recovered. If one indorser is obliged to pay the debt, he can generally look to the other person or endorsers for their proportion.

Corporation Notes.—When an officer of a corporation signs a note of the corporation, he does not become personally liable for the obligation evidenced by the note. But if he puts his signature on the back of the note, he becomes an indorser, and is personally liable as such.

To Make the Indorser of a Note Responsible, the note must be presented and payment demanded of the maker on the day it becomes due.

A Conditional Indorsement is one that involves some condition. A party required to pay the instrument may disregard the condition, and make payment to the indorsee or his transferee, whether the condition has been fulfilled or not.

But any person to whom an instrument so indorsed is negotiated will hold the same, or the proceeds thereof, subject to the rights of the per-son indorsing conditionally. (See Form 4.)

A Restrictive Indorsement expressly confines the payment to some particular person or purpose. (See Form 5.)

Partial Payments.—When money is received on a note, the amount and date of receiving should be plainly written on the back of the paper. (See Form 6.)

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