The New International Encyclopædia/Promissory note

PROMISSORY NOTE (from Lat. promissor, promiser, from promittere, to promise, send forward, from pro, before, for ＋ mittere, to send. Skt. mïv, to push). A written instrument containing an express and unconditional promise by the maker to pay a certain sum in money, on demand, or at a fixed or determinable future time. If it is payable to order or to bearer, it is a negotiable instrument (q.v.) . The following is an ordinary form of a negotiable promissory note, payable at a bank :
“$1000.00.New York, April 1, 1903.

Three months after date I promise to pay to the order of Richard Roe One Thousand Dollars, at the Corn Exchange Bank.

Value received, with interest.John Doe.”

Had the words “at the Corn Exchange Bank” been omitted, the note would have been payable at the maker's place of business or residence.

It will be observed that the parties to a promissory note are two—the maker and the payee. If the payee is named, as in the form given above, and the note is payable to his order, his indorsement of it is necessary to its negotiation. He may sell and transfer it without an indorsement; but his transferee in that case will take it subject to any defenses available to the maker against him. The maker promises absolutely to pay the paper. Hence the holder is not bound to present it at the time and place named in the instrument, as a condition of suing the maker.

The early history of promissory notes is quite obscure. Their earliest appearance in the reported decisions of English courts is during the close of the seventeenth and the opening of the eighteenth century. For a time the judges seemed disposed to follow mercantile usage and to treat them as negotiable instruments. With the accession of Lord Holt to the chief justiceship of the King's Bench, a change of judicial attitude became noticeable. He refused to recognize their negotiable character; and in 1704 Parliament, siding with the merchants, enacted a statute (3 and 4 Anne, c. ix.) which declared that promissory notes “shall have the same effect as inland bills of exchange.” In some of the United States this statute has been looked upon as simply declaratory of the common law, while in others Lord Holt's view has been accepted. Everywhere, however, certain forms of promissory notes are now deemed negotiable instruments.

In some States certain forms of notes are declared negotiable by statute which are not negotiable in the common-law sense. For further discussion, and for the liability of indorsers, requirements as to presentation, etc., see such titles as Bill of Exchange; Due Bill; Negotiable Instruments; Indorsement; Protest; Demand, etc. Consult: Bigelow, The law of Bills, Notes, and Cheques (2d ed., Boston, 1900), and the authorities referred to under Negotiable Instruments.