Story Case

Simon Langdell purchased a horse from Emory Jarman who warranted the animal to be sound and free of all blemishes. Langdell gave Jarman a promissory note for $100 due in sixty days, in payment, but omitted to insert the date in the instrument. Jarman inserted the date of sale and indorsed the note for value to one John Pomeroy. The horse did not prove to be as Jarman had warranted, and Langdell attempted to use this fact as defense when suit was brought by Pomeroy on the note. Langdell contended that an undated note was not negotiable, merely assignable, and hence, all defenses effective against the original taker were equally effective against Pomeroy. Is this correct?

Ruling Court Case. Mitchell Vs. Culver, Volume 7 New York Reports, Page 336

This action was brought by Mitchell upon a promissory note. The instrument was made by Howe, payable to Howe in sixty days, for $200. It purported to be dated upon November 5,1825. As a matter of fact, however, it was made on November 27, and no date was inserted. It was indorsed by Howe and Culver for Rowe's accommodation. The maker, Rowe, then delivered it to Mitchell in payment of a debt by Rowe to Mitchell. At the suggestion of Rowe, Mitchell dated the instrument as of November 5. Culver contended that the note was not negotiable because it was not dated.

Decision: It is not necessary to the negotiability of an instrument that it should be dated. It is desirable, however, in order that the time of payment can be fixed. A note or bill issued, with the date blank, confers authority upon any subsequent holder to date the instrument.

Mr. Justice Sutherland said: "When an accommodation indorser of a note returns it to the maker, with the date in blank, the note carries on the face of it an implied authority to the maker to fill up the blank. As between the indorser and third persons, the maker, under such circumstances, must be deemed to be the agent of the indorser, and acting under his authority and with his approbation. Although it is not essential to the legal validity of a note that it should be dated, yet we all know that it is necessary to its free and uninterrupted negotiability. A note without a date will not be discounted at our banks, nor pass in the money markets without previous inquiry. All the parties, therefore, to a note intended for circulation, must be presumed to consent that the person to whom such a note is intrusted for the purpose of raising money may fill up the blanks." Judgment was given for Mitchell.

Ruling Law. Story Case Answer

It is not necessary that a negotiable instrument be dated in order to be valid. The Negotiable Instruments Law provides: "The validity and negotiable character of an instrument are not affected by the fact that it is not dated." If the instrument is not dated, it will be presumed to be dated in accordance with the time it was issued. On the other hand, it is always desirable that a negotiable instrument should be dated. The existence of a date renders the note more certain, and, therefore, is conducive to its free circulation. Instruments issued, payable at so many days after date, must have a date in order to fix the time of payment. If an instrument of this kind is issued, it is generally held that the holder has implied authority to insert a date, and thus fix the time of payment. Langdell's defense in the Story Case is not effective.