Story Case

In accordance with a contract, existing between Thomas Cooley in London, and James Barr living in Chicago, Cooley forwarded his note for $1,000 to the First National Bank of Chicago with instructions to deliver it to Barr. This was done on January 15, 1915. When the bank received the note, it advised that a war revenue stamp be affixed, in accordance with the revenue act of the United States. Barr contended that this need not be done, since the note was executed in London. Is this corret?

Ruling Court Case. Chapman Vs. Cattrell, Volume 13 Weehley Reporter, Page 843

Cattrell was a British subject residing in Florence. While in Florence, he made and signed a promissory note in favor of the Union Bank of London, of which Chapman was an officer. He sent the note by post to his brother in London, who delivered it to the bank. Whether this action was properly brought depended upon when the note became complete. Chapman contended that it was not complete until delivery of it had been made to the bank. Cattrell contended that it was made and completed when he signed it in Florence.

Decision: A bill or note becomes complete only when delivery has been made. Until then, such an instrument is not an obligation against the maker or drawer. Baron Martin said in part: "Now, upon these facts, I think it quite clear that, in point of law, it continued in his possession just as much as if it were in his pocket, until it was delivered, and that till then, no contract arose." Judgment was given for Chapman.

Ruling Law. Story Case Answer

A negotiable instrument is not complete until it has been delivered by the person making or drawing the same. Until it has been delivered, it is obvious that the maker may destroy the instrument if he chooses to do so. Thus, where a man draws a note upon a condition, the note is not complete until delivery has been perfected by the happening of the condition.

In the Story Case, the note was not executed until it was delivered by the First National Bank, the agent of Cooley. Therefore, the bank's advice was correct. Had the note been mailed in London direct to Barr, his contention, as to the place of execution, would have been correct.