COMPOUND INTEREST TABLE, Showing the amount of $1 at compound interest, at various rates per cent. for any number of years, from 1 year to 50 years, inclusive. 1. The amount of $1 for more than 50 years is equal to the product of the amount of $1 for any two or more numbers of years in the Table whose sum is equal to the given time. Thus, the amount of $1 at compound interest for 84 yr. at 2%, is equal to the product of the amount of $1 at 2% for 50 yr. and the amount of $1 at 2% for 34 yr.; that is, $2.69158803 × 1.96067603, or $5.27733213+. 34.4740 853 52.6767 419 80.1795 321j COMMERCIAL PAPER. 609. Commercial Paper includes all documents used as representatives of money, which may be transferred by delivery merely, or by indorsement and delivery; such as negotiable notes, drafts, checks, and other written or printed evidences of indebtedness. 610. A Note (Promissory Note) is a written promise to pay a certain sum of money on demand, or at a specified time, for value received, signed by the party making the promise. 611. A Draft is an order in writing signed by one party, directed to another, requesting the payment of a certain sum of money unconditionally to a designated third party, or to his order, or to bearer, either at sight or at a specified time. A draft drawn on a party in another state or country is called an Exchange or Bill of Exchange. 612. A Check is a draft or written order drawn on a bank or banker for a certain sum of money specified therein, supposed to be on deposit, and payable immediately to a certain person named therein, or to his order, or to bearer, on presentation and demand. 613. The Parties to a NOTE are the drawer, commonly called the Maker, who signs the note thus making himself responsible for its payment, and the Payee, the party to whom, or to whose order, it is made payable. The parties to a DRAFT are the Drawer, who draws the draft or check; the Drawee, to whom the order is addressed, who afterwards becomes the Acceptor (or maker), and the Payee. The Indorser is the person who writes his name on the back of the paper for the purpose of transferring it, or as security for its payment; the Indorsee is the person to whom it is indorsed; and the Holder is the person who holds or owns it. The last two parties are generally the same person. 1. The original parties to commercial paper are those who bring it into existence, or those named in the instrument when first drawn. The maker and payee are the original parties to a note; the drawer, drawee, and payee, are the original parties to a draft or check. 2. The subsequent parties to a commercial paper are those to whom the paper is transferred or negotiated,-who indorse the paper. 3. There may be only two parties to a draft or check, as when the drawer makes the paper payable to himself. The payee, indorser, and holder may be the same person. 614. The Face of a note is the sum promised. It is written in words in the body of the note, and is usually placed in figures in the upper left hand corner of the paper and at the end of the line in which the payee's name appears. If the note reads "with interest," it draws interest from date; otherwise only after maturity until paid. It may also draw interest from a particular time after date, if so specified in the note. When no rate is mentioned the legal rate of interest is understood. The words "value received" should be inserted in a note to acknowledge a valuable consideration, which acknowledgment would be sufficient, in case of litigation, to cast upon the defendant the burden of proof that there was no valuable consideration received. 615. A Negotiable Instrument is one in which the legal right to the money value of the contract can be transferred from one party to another by delivery merely or by indorsement and delivery. A promissory note is negotiable when it is made payable to the "bearer," or to the "order" of the payee. 66 1. A note payable "to bearer" is negotiable without indorsement. A note payable to order" becomes negotiable by the payee writing his name upon the back. This is called indorsing the note. 2. A non-negotiable note is one that is payable to that person only who is named in the note. It is not strictly a commercial instrument. 3. The words, "without defalcation" are required in Pennsylvania to make a note negotiable; in New Jersey, "without defalcation or discount," and in Missouri, the words “ negotiable and payable without defalcation or discount." 4. When no place of payment is specified, a promissory note is payable at the maker's place of business or, if none is known, at his residence. A note or draft must be presented at the place where it is made payable, and during business hours. The holder need not call more than once if the maker is not ready with legal tender to pay the note. 5. A negotiable instrument must have the following requisites: 1. It must contain certain direction or order or promise to pay in writing. 2. It must be payable in money alone, and not in goods or chattels. 3. The sum of money must be stated with certainty or at least capable of being easily ascertained. 4. There must be no condition or contingency attached to the payment. 5. It must state the time when due, or at least give the facts by which this can readily be determined. 6. A valuable consideration must support the contract. 7. The maker or acceptor must be capable of becom ing legally accountable for its payment at maturity. These essentials are generally set forth in the following orderly parts: Place where made, date, time to run, name of payee, negotiable words, amount, consideration, place of payment, name of maker or drawer, name of drawee. 616. An Indorsement is a writing on the back of a note or other commercial paper. An indorsement may be made for three purposes: to secure the payment, to transfer the ownership, or to make a memorandum of partial payment. 617. The Indorsement of commercial paper to transfer ownership may be an indorsement in blank; an indorsement in full; a conditional indorsement; a qualified indorsement; or a restrictive indorsement. 1. An indorsement in blank, or general indorsement, is simply the signature of the indorser, who is usually the payee, or other lawful holder, without naming any indorsee. This makes the paper payable to the bearer. 2. An indorsement in full, or special indorsement, is one in which the indorser states over his signature to whose order it shall be paid. Thus, in Note 2, Art. 623, R. B. Dunmire by simply writing his name across the back indorses it in blank. Should he wish it paid to the order of a particular person, as G. E. Fisher, he would indorse it in full; thus, "Pay G. E. Fisher or order. R. B. Dunmire." Before it could again be transferred it would require the indorsement of G. E. Fisher, who could indorse it in blank or in full. 3. For greater security notes, checks, drafts, etc., to be sent by mail should be indorsed in full. 4. A conditional indorsement is one subject to a specified condition which must be complied with to hold the indorser liable; as, "Pay to G. E. Fisher or order, if not otherwise directed before maturity. R. B. Dunmire.” 5. A qualified indorsement is one in which the indorser relieves himself from all liability for payment by writing over his signature "without recourse or words of similar import; as, "Pay G. E. Fisher or order without recourse. R. B. Dunmire." The purpose of a qualified indorsemeut is to enable the indorser to sell or transfer his title to a negotiable paper, and, at the same time, free himself of liability for payment in case of protest for non-payment by the maker or acceptor. 6. A restrictive indorsement is one which restricts the payment to the particular party specified; as, "Pay to G. E. Fisher only. R. B. Dunmire." With this indorsement, G. E. Fisher could not transfer the paper. 618. The Place for Indorsement is across the back of the paper, near the upper end, or left edge as held when reading it. Place the paper before you, face up, as if to read. Now turn the face down without changing ends, and the left edge will be the top on which to place the first indorsement. This not only makes the writing of the indorsement right side up on turning from reading the face of the paper, but also affords all the blank space possible for further indorsement when needed. FORMS OF INDORSEMENT. 619. The Forms of Indorsement, placed on the back and at the top of commercial paper, are shown in the following: 1. The last form of indorsement is for deposit in the bank specified to be there placed to the credit of the indorser's account. If a bank will not receive the paper with this form of indorsement (as is the case in New York), the words "for deposit" must be omitted, or it may be indorsed in blank. 2 If the drawee promises to pay a draft or bill of exchange at its maturity, he writes across the face above his name, Accepted," with the date, when the paper is written a given number of days after sight, and his signature. The drawee then becomes the acceptor, and the draft or bill an acceptance. The paper then has the character of a promissory note. 620. Days of Grace are the three days allowed by law in some States for the payment of a note after the time specified in it has expired. Days of grace have been abolished by statute in the following States: Arizona, California, Colorado, Connecticut, Delaware, Dist. of Columbia, Florida, Idaho, Illinois, Iowa, Maryland, Maine (except Sight Drafts), Mass. (except Sight Drafts), Montana, New Hampshire (except Sight Drafts), New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island (except Sight Drafts), Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin. |