Opinion
July 7, 1910.
Charles H. Stoddard, for the appellant.
Francis M. Applegate, for the respondent.
The single question presented by this appeal is whether a note without interest, payable on demand after date at a particular place, draws interest before demand or before the commencement of the action, which would be equivalent to a demand. The note on which the action is founded is as follows:
"$150 00/100 NEW YORK, March 14, 1898.
"On demand after date I promise to pay to the order of George Van Vliet One Hundred Fifty 00/100 Dollars, at my store 852 B'way. Value received.
"FRED'K KANTER."
There is no evidence that payment of the note was demanded until the 2d day of July, 1908, prior to the commencement of the action. The plaintiff was allowed to recover interest at the legal rate from the date of the note, and that view of the law has been affirmed by the Appellate Term. ( 65 Misc. Rep. 48.) The Negotiable Instruments Law regulates the computation of interest where there is an agreement to pay interest, but not in a case like the one at bar. (Neg. Inst. Law [Gen. Laws, chap. 50; Laws of 1897, chap. 612; Consol. Laws, chap. 38; Laws of 1909, chap. 43], § 36, subd. 2.)
It is well settled that a note payable on demand and a note payable on demand after date are, for the purpose of the running of the Statute of Limitations, deemed due and payable respectively on the day of the date of the note and on the day following without any demand. ( Hardon v. Dixon, 77 App. Div. 241; McMullen v. Rafferty, 89 N.Y. 456; Crim v. Starkweather, 88 id. 339; Neg. Inst. Law, § 146.) That rule, however, is not decisive of the question now presented for decision. Here is a note evidencing a contract in which the parties saw fit to make no provision for interest, and it, therefore, draws no interest until a demand is duly made which puts the maker in default. ( Sanford v. Crocheron, 8 Civ. Proc. Rep. 146. See, also, Ledyard v. Bull, 119 N.Y. 62; Lawrence v. Church, 128 id. 324, 332; Herrick v. Woolverton, 41 id. 581, 596; Crim v. Starkweather, supra, and Bishop v. Sniffen, 1 Daly, 155, where the note drew interest and the rule may be different.) There are exceptions to this rule where the obligation is a bond or the nature of the obligation and the attendant circumstances show that the payment of interest was contemplated by the parties. ( Chester v. Jumel, 125 N.Y. 237; Purdy v. Philips, 11 id. 406.) The note did not mature on the day of its date, for it was not payable on that day. It was payable on demand after date. A legal demand could not have been made on the day of the date of the note to put the maker in default, for by the express terms of the note the obligation to pay did not accrue until the next day. Interest, therefore, could not run in any event until the day after the date of the note; but it would not commence then without a demand, for in such case interest is recoverable only by way of damages after the maker is in default on failure to pay on demand. ( Hanley v. Crowe, 3 N Y Supp. 154; Rensselaer Glass Factory v. Reid, 5 Cow. 587, 611; 16 Am. Eng. Ency. of Law [2d ed.] 1020, 1021, n. 3; 22 Cyc. 1547.) The general rule in other jurisdictions applicable to such a note is that it does not draw interest until a demand or until the commencement of the action which is deemed a demand. (Ran. Com. Paper [2d ed.], § 1710; 2 Pars. Notes Bills, 393; Adams v. Adams, 55 N.J. Eq. 42; Burnham v. Allen, 1 Gray, 496; Am. Eng. Ency. of Law, supra; Cyc. supra.)
It may be observed, although of course it is not a controlling consideration, that, by virtue of section 130 of the Negotiable Instruments Law (Gen. Laws, chap. 50 [Laws of 1897, chap. 612], as amd. by Laws of 1898, chap. 336; revised into Consol. Laws, chap. 38; Laws of 1909, chap. 43), presentment is not necessary to hold the maker, but that if a note be payable at a particular place, as this was, evidence that the maker had funds there with which he was ready, able and willing to meet it at maturity, is equivalent to a tender of payment, and if that fact be set up by answer and the money be paid into court, the interest in the meantime cannot be recovered on the note. (See, to the same effect, Hills v. Place, 48 N.Y. 520; Budweiser Brewing Co. v. Capparelli, 16 Misc. Rep. 502.)
It is important that the law with respect to negotiable instruments should be uniform throughout the country, and if possible throughout the business world. Any doubt, therefore, that has arisen on this question based on dicta in opinions written long ago (See Gaylord v. Van Loan, 15 Wend. 308; Purdy v. Philips, supra) should be removed by a definite ruling that such a note does not draw interest until demand or the equivalent thereof.
It follows, therefore, that the determination of the Appellate Term should be reversed, with costs in this court and in the Appellate Term, and the judgment of the Municipal Court modified by deducting interest from the date of the note to the date of the demand, and as thus modified affirmed.
INGRAHAM, P.J., CLARKE, SCOTT and MILLER, JJ., concurred.
Determination reversed, with costs, and judgment of Municipal Court modified as indicated in opinion, and as modified affirmed. Settle order on notice.