Hosstatter v. Wilson

[308] By the Court, Ingraham, P. J. The notes declared on in this action were promises to pay the amounts therein mentioned as dollars or in goods on demand. The complaint merely gives copies of the notes, with an averment that no holder of the notes had ever elected to take payment in goods. The defendant demurred to the complaint, on the ground that there was no cause of action stated therein. The demurrer was overruled. The decision of the questions arising on the demurrer depends upon the question whether the instrument is a promissory note. If it is, then the complaint is sufficient. The essential requisite of a promissory note is, that it must be payable in money absolutely and without any contingency. Such payment must be precise and certain. (Chit. on Bills, 152, 9th ed. Story on Prom. Notes, § 22.) So a written promise to pay the bearer a certain sum of money in goods is not a valid promissory note. (Story, § 17. 7 John. 321. 1 Cowen, 691.) If there appears upon the face of the note any contingency which would make it payable in any thing other than money, then it does not possess the negotiable qualities of promissory notes, and becomes a mere contract. It is an alternative agreement to pay a sum of money or do some other act. In the present case the debtor promises to pay,in money. He has no "election to do any thing else. If the holder chooses, he may surrender the note and receive goods; but that rests entirely with himself, and no choice is left to the debtor. Upon the argument, my impressions were adverse to the sufficiency of this complaint; but a late case in the court of appeals has, I think, established a contrary doctrine. In Hodges v. Shuler, (22 N. Y. Rep. 114,) it was held that a note of a corporation, for a specific sum, with a fixed time for payment, and containing the condition that the holder might within a given time surrender the note, and receive stock in lieu thereof, was a promissory note. This was no other than a note for money, or, in case the holder elected [309] within the time specified, to be paid in stock. Wright, J. says: “ The instrument is a promissory note. It is for the unconditional payment of money, at a specified time, to the payee’s order. It was not optional with the makers to pay in money or stock, and thus fulfill their promise in either of two specified ways: in such case the promise would have been in the alternative.” And again, “ although an election was given to the promisees upon a surrender of the instrument to exchange it for stock, this did not alter its character, or make the promise in the alternative, in the sense in which that word is used respecting promises to pay.” [New York General Term, February 3, 1862. Ingraham, Clerke and leonard, Justices.] Whatever views I might otherwise entertain, of this question, I think the decision last cited covers this case and controls us in the disposition of this question. It was said that the averment that no demand had been made for the goods, sustained the grounds taken by the defendant. Upon that point I have no difficulty. The answer to it is, that the averment is unnecessary. The matter was only available as a defense if the demand had been made and complied with. Even if the demand for goods has been made, the debtor would not have been relieved from his obligation to pay in cash, except by delivering the goods demanded. In case of omitting to do so, the obligation to pay remained. If he had paid, the note would have been surrendered. The judgment of the special term should be affirmed, with costs.