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ing be uncertain. An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect."? In the case of Cedar Rapids Nat. Bank v. Weber, 164 N. W. (Ia.) 233 (1917), it was held that a provision in a note, otherwise negotiable, by which all the parties, including sureties, indorsers, and guarantors” consented" to extensions of time on this note," rendered the note non-negotiable, as being uncertain as to the time of payment within the meaning of the above sections. The court held that the effect of the provision was binding upon all parties to the note, especially the maker, payee and holder.
It being a rare coincidence to have two notes with identically the same provisions for extensions of time, there has arisen a conflict of authority, more apparent than real, respecting the effect of such provisions upon negotiability.
If the instrument gives the party primarily liable the right to indefinitely extend the time of payment the note is rendered nonnegotiable for uncertainty as to the time of payment. However, it seems to be the general rule that a provision for a definite or limited extension at the option of the party primarily liable does not affect the negotiability of a note.4
But where the provision of the note makes it optional with the holder and not the maker to extend the time of payment, there is a conflict of authority as to the effect of such a provision upon the negotiability of the note. The case of First National Bank v. Butterys ably presents the view that the negotiability of a note is not destroyed by a provision granting the holder the option of indefinitely extending the time of payment, and this view finds considerable support in other jurisdictions. Smith v. Van Blarcom? is one of the leading cases supporting the contrary doctrine to the effect that where the holder has an option to indefinitely extend the time of payment, the note is rendered non-negotiable for uncertainty. Where the holder is given only an option to make a definite or limited extension the note is generally held negotiable. 8
In some jurisdictions, the effect of a provision for an extension of time is made to turn upon whether such an extension may be or is to be made before maturity, or whether it is to be made at or after maturity.9 If before maturity, then the note is said to be non
2Code Supp. of Iowa, 1913, sec. 3060a4; Brannan's Neg. Inst. Law, Tit. I Art. I, sec. 4.
Citizens Nat. Bank v. Piollet, 126 Pa. St. 194 (1889); Rosville State Bank v. Heslet, 84 Kan. 315 (1911); Union Stockyards Nat. Bank v. Bolan, 14 Idaho 87 (1908); Woodbury v. Roberts, 59 Ia. 348 (1882); Daniel on Negotiable Instruments, sec. 47.
"Supra, note 3; Anniston L. & T. Co. v. Stickney, 108 Ala. 146 (1895). 617 N. D. 326 (1908).
*City Nat. Bank v. Goodloe-McClelland Comm. Co., 93 Mo. App. 123 (1902); Nat. Bank of Commerce v. Kenney, 98 Tex. 293 (1904); Longmont Nat. Bank v. Loukonen, 53 Colo. 489 (1912); Note, 125 Am. St. Rep. 201; Note, Ann. Cas. 1914 B, 210.
745. Mich. 371 (1881). See also Woodberry v. Roberts, 59 Iowa 348 (1882); Glidden v. Henry, 104 Ind. 278 (1885); Second Nat. Bank of Richmond v. Wheeler, 75 Mich. 546 (1889); Note, 17 Ann. Cas. 55; Note, 31 L. R. A. 234.
8Capron v. Capron, 44 Vt. 410 (1872); State Bank of Halstad v. Bilstad, 136 N. W. (Ia.) 204 (1912); but see Miller v. Poage, 56 Ia. 96 (1881).
'First Nat. Bank v. Stover, 155 Pac. (N. Ñ.) 905 (1916).
negotiable for uncertainty as to the time of payment.10 If the .extension is to occur after maturity it is held not to affect negotiability, for the note becomes non-negotiable by operation of law at maturity.11
In the principal case, the provision in the note was as follows: "All parties to this note, including sureties, indorsers, and guarantors, hereby severally waive presentment for payment, notice of nonpayment and protest, and consent to extensions of time on this note." In reference to this provision the court said: “We gather from the great weight of authority that, where the provision of the note amounts to an agreement by the parties to the note for an extension to an indefinite time, the negotiability of the note is thereby destroyed. The language of the note in suit contains a provision by which the maker, payee, sureties, indorsers and guarantors consent to an extension of time of payment. This language is binding upon the payee, the holder, and the maker. If the maker demands an extension of time, by the terms of the instrument the payee has consented thereto." Much has been written dealing with like provisions, but nowhere has there been taken a clear distinction between provisions for an extension, that is, where the parties agree that an extension may be made, and provisions to extend, where the extension itself is made by the language of the provision.
The provision in the note of the principal case would clearly not of itself effect an extension, but was an agreement that an extension might be made. The question then arises whether in such a circumstance it shall make the time of payment so uncertain as to cause the note to be non-negotiable. The court held that the language in the principal case made it mandatory or binding upon any party, including the holder, to grant the other an extension if demanded. Is it the necessary result of the language of the provision to say that the payee or holder was bound to grant an extension if demanded ? If the language is construed literally, this question may perhaps be answered in the affirmative. If that is the conclusion reached, then the note would be non-negotiable within the scope of the rule that if the instrument gives the party primarily liable the right to indefinitely extend the time of payment, the note is rendered non-negotiable for uncertainty as to the time of payment. But in construing this and similar provisions the intent of the parties who framed the instrument must be looked to. The courts are uniform in their holding that such provisions are inserted for the express purpose of preventing those who are secondarily liable from being released by an extension without their consent.13 And, with this purpose in mind, it is not difficult to construe the language used as including only parties who are secondarily liable, who are the sureties, indorsers and guarantors,
10 Rosville State Bank v. Heslet, supra, note 3; Matchett v. Anderson Foundry & Mach. Works, 29 Ind. App. 207 (1902); Union Stockyards Nat. Bank v. Bolan, 14 Idaho 87 (1908); Stitzel v. Miller, 250 I11. 72 (1911); Missouri-Lincoln Trust Co. v. Long, 31 Okla. I (1911); De Groat v. Focht, 37 Okla. 267 (1913).
11Stitzel v. Miller, supra, note 10; Navajo County Bank v. Dolson, 163. Cal. 485 (1912); Bank of Whitehouse v. White, 191 S. W. (Tenn.) 332 (1917); First Nat. Bank v. Stover, supra, note 9; Coffin v. Spencer, 39 Fed. 262 (1889). 12Italics are the writer's. 18First Nat. Bank v. Buttery, supra, note 5.
the general phrase, “All parties to this note," being limited to the enumerated classes of parties which follow.14 If this view is the proper one, the result would be that neither the maker nor holder would have the right to extend the time of payment, and the negotiability of the note would not be affected. Even though the construction be broadened to include the maker (a person presumably primarily liable), yet such an inclusion is merely to avoid any question as to the actual position the maker might hold with reference to the instrument; for as between the parties, the maker may be primarily or secondarily liable. 15 While this construction would give the option to the payee or holder to extend the time of payment, yet as pointed out above, there is respectable authority to the effect that this does not destroy the negotiability of the instrument.
Frederic M. Hoskins, '19.
Carriers: Rights and duties of passenger having a defective ticket.-As to just what are the rights and duties of a passenger presenting an invalid or defective ticket as evidence of his right to ride upon a carrier's vehicle, the courts of this country have been in considerable confusion. In Creech v. Atlantic Coast Line R. Co., 93 S. E. (N. C.) 453 (1917), the plaintiff had purchased a ticket over a certain road to Selma, S. C. He changed to another road over which his ticket was not good, but upon explaining the circumstances, the conductor offered to have it changed by one of the ticket agents along the line. This was done, and the ticket returned to the plaintiff, who later changed to another branch of the same road. When the ticket was presented to the conductor upon this line it was refused and plaintiff was told that he was on the wrong line, it appearing that the agent, in making the change in the ticket, had given the first conductor one for Thelma instead of Selma, S. C. Upon the plaintiff's refusal to again pay his fare, and after explaining the circumstances with the request that the conductor telegraph in order to ascertain the true facts, the plaintiff was ejected from the train. In a suit to recover the damages caused thereby, the court held that the agent making the mistake was acting for the defendant, which was responsible for such damage as was caused by the wrongful ejection.
It is well settled that a common carrier of passengers has power to make and enforce reasonable rules and regulations as to the carriage of its patrons and for the general transaction of its business. Therefore, a common carrier may lawfully require its passengers to procure tickets, where it has furnished convenient facilities for that purpose, and to exhibit and surrender them to designated agents when required to do so. If there is a failure to observe the rules, the carrier may refuse service or impose other penalty, and in the case of failure to
14Borough of Millerstown v. Bell et al., 123 Pa. 151 (1889). 15 Bldg. & Engineering Co. v. Northern Bank of N. Y., 206 N. Y.400 (1912). 1Evans v. Memphis & Charleston R. R. Co., 56 Ala. 246 (1876); Standish v. Narragansett S. S. Co., 111 Mass. 512 (1873); Barker v. Central Park, N. & E. R. R. R. Co., 151 N. Y. 237 (1896).
?Evans v. Memphis & Charleston R. R. Co., supra, note 1; Louisville & Nashville R. R. Co. v. Commonwealth, 102 Ky. 300 (1897).
Downs v. N. Y. & N. H.R.R. Co., 36 Conn. 287 (1869); Van Dusen v. Grand Trunk Ry. Co., 97 Mich. 439 (1893).
procure a ticket, it may impose a higher rate or even refuse to carry without a previous compliance with the rule. 4
But, where the passenger has already entered the vehicle and has endeavored to comply with the rules, and because of error or negligence on the part of someone, he presents a defective ticket as evidence of his right to travel, the cases are in conflict as to what his rights and duties are. Two situations are apt to arise, (1) where the mistake or negligence is that of the carrier or its agents, (2) where the mistake or negligence is that of the passenger. In the first case, the rule supported by the majority of the more recent cases seems to be that the passenger can stand upon his contract with the company as actually made and not as evidenced by the ticket; that he may refuse to pay the fare wrongfully demanded, may assert his rights as a lawful passenger, and, if ejected, may sue the company for such damages as result from the act of its agent in ejecting him. The theory of these cases is that the actual contract made between the carrier's agent and the passenger gives the right to transportation, even though the face of the ticket presented as evidence of that contract may not in any true sense express the terms of the real contract. Inasmuch as the character of the ticket which the passenger receives is entirely within the control of the carrier, these cases say that the passenger has a right to presume that the ticket correctly expresses the contract, and he is not required to see that the agent selling it has given him the proper evidence of his right to transportation. The act of the agent is the act of the principal, and, therefore, the wrongful ejection being caused by the carrier itself, it should be liable for all damages caused in consequence of it.
On the other hand, there are a considerable number of well reasoned cases holding the contrary view, to the effect that the ticket as between the passenger and the conductor is conclusive evidence of the contract made with the agent issuing it, and if the passenger is aboard the carrier's vehicle contrary to its provisions, he must pay his fare or leave the train, and failing to do either, he may be ejected with the use of as much force as is necessary. In these states, if the ejection is wrongful, the only remedy the passenger has is for breach of contract, caused by the act of the first agent, unless there has been the use of excessive force. This rule is justified chiefly upon the grounds of public policy in preventing breaches of the peace, and upon the impossibility of operating railways upon any other principle, having regard for the safety of those who travel, and also for the protection
Reese v. Pennsylvania R. R. Co., 131 Pa. 422 (1890); Pease v. D. L. & W. R. R. Co., IOI N. Ý. 367 (1886).
"Lake Erie & W. Ry. Co. v. Fix, 88 Ind. 381 (1892); Southern Kansas R. R. Co. v. Rice, 38 Kan. 398 (1888); Cherry v. Chicago & A. R. R. Co., 191 Mo. 489 (1905); Ferguson v. Missouri Pac. Ry. Co., 144 Mo. App. 262 (1910); Norman v. East Carolina Ry. Co. 161 N. C. 330 (1913); Teddars v. Southern Ry. Co., 97 S. C. 153 (1913); Cincinnati, N. 0. & T. P. Ry. Co. v. Harris, 115 Tenn. 501 (1905); Gulf, C. & S. F. Ry. Co. v. Rother, 3 Tex. Civ. App. 72 (1893).
Mosher v. St. Louis, I. M. & T. R. R. Co., 23 Fed. 326 (1885); Pennsylvania R. R. Co. v. Connell, 112 Ill. 295 (1884); Bradshaw v. South Boston R. R. Co., 135 Mass. 407.(1883); Western Maryland R. R. Co. v. Stocksdale, 83 Md. 245 (1896); Frederick v. Marquette H. &0.R.R. Co., 37 Mich. 342 (1877); Shelton v. Erie R. R. Co., 73 N. J. L. 558 (1907); McKay v. Ohio River R. R. Co., 34 W. Va. 65 (1890).
of the company from fraud. In some of these cases, the court bases its conclusion upon the additional ground that the passenger was also negligent in not ascertaining beforehand whether or not his ticket properly stated the contract made with the agent. The conductor cannot decide from the mere statements of the passenger, in the absence of the counter evidence of the agent, just what the actual contract of carriage might have been. Such a doctrine, it is claimed, would not only be casting upon the conductor the duty of entering upon a judicial investigation, but would oftentimes compel him to make a decision, which, if erroneous, would result in loss to the company, as in most cases the passenger could not be located after he had left the train.
In the second class, where the passenger is solely at fault, the cases are pretty well settled that the conductor has the right to demand payment of the fare in case the ticket is insufficient upon its face. 8 Such a rule, in view of the fact that the insufficiency is the fault of the passenger, would appear to be a just one, as he should not be heard to complain of a hardship which he has brought upon himself.
The authorities in New York State apparently support the view that the passenger must abide by the rules of the carrier, even though the carrier's servant is at fault, and if he can produce no valid ticket, must pay the fare or submit to ejection. In Townsend v. N. Y. Central & H. R. R. R. Co.' the plaintiff had purchased a ticket but boarded a train which went only half way to his destination. The conductor took up the ticket, and at the end of the run, the plaintiff got off and boarded another train in order to complete his journey. When the conductor demanded his ticket, he was informed that it had been taken up by the other conductor, and upon plaintiff's refusal to pay a new fare, he was ejected. The Court of Appeals held the ejection proper and refused to allow recovery for the resulting damage. In an earlier case, 10 the same court remarked, “A passenger should see to it, if he prefers not to pay in the cars, that he has a proper voucher. If he does not, he cannot complain if the conductor, in obeying the regulations of his company, puts him off the train." About thirty years later, in Monnier v. N. Y. Central & H. R. R. R. Co.,11 the court, dividing four to three, took the same attitude. There the plaintiff, because of the fault of the carrier, had failed to procure a ticket. The conductor demanded an excess fare, which plaintiff refused to pay, and was consequently ejected. The court overruled the decision of the lower court to the effect that the plaintiff could maintain an action for assault and battery, saying “The simple duty of the conductor is to execute and enforce all reasonable rules and that of the passenger is to obey them. If there is some fact or omission
Railway Co., 14 Pa. Super. Ct. 282 (1900); Weaver v. Rome, W. &0. R. R. Co., 3 T. & C. (N. Y.) 270 (1874). See other New York cases cited infra, notes 9 and 10.
8 Downs v. N. Y. & N. H. R. R. Co., supra, note 3; Carpenter v. Washington & G. R. R. Co., 121 U. S. 474 (1887); Maxson v. Pennsylvania R. R. Co., 49 Misc. (N. Y.) 502 (1906); Pittsburgh, C. C. & St. L. Ry. Co. v. Daniels, 90 Ill. App. 154 (1899); Trezona v. Chicago Great Western Ry. Co., 107 Ia. 22 (1898).
856 N. Y. 295 (1874); but see same case in 6 T. & C. (N. Y.) 495 (1875).