accordingly be nonnegotiable. In place of the expression "upon condition that," if there be substituted the phrase "subject to," the same result would be reached. If, instead of the words "subject to," there be used the words "as per" there would be some disagreement as to whether these words should be given the same effect as the words "upon condition that" or "subject to." Most courts would hold that the words "as per" are not the legal equivalent of the words "upon condition that" or "subject to." This type of conflict of authority is not, however, a serious matter, nor can it be entirely removed; for the question as to what words are to be treated as synonymous with other words is one upon which there is likely to continue a justifiable difference of opinion. The conflict of authority which is chiefly featured in the preceding cases is of a more serious nature because it is the result of a difference of opinion as to which of two possible fundamental theories is applicable to the situation. Some courts proceed upon the theory that the only way in which a promise or order in an instrument may be rendered conditional is by the insertion, in such promise or order, of words which expressly qualify the promise. Other courts proceed upon the theory that such promise or order may be rendered conditional by implication, that is, by resort to the doctrine of conditions implied in law. The typical situation arises when the instrument contains a recital of the contract, mortgage, pledge or other transaction or of language which refers to some extrinsic agreement, which gave rise to the execution and delivery of the instrument. It is to be remembered that the words, "I promise to pay P. or order," etc., or the words, "Pay P. or order," etc., appearing on an instrument, constitute a promise or an order which is wholly separate and distinct from any other promise appearing on the same or other instrument, although the promisee may be the same in each. For convenience, the former may be called the commercial specialty promise or order. The other will usually be simple contractual promises or promises contained in a mortgage, pledge, or other agreement, or will consist of some language referring to such extrinsic instru ments. The courts that proceed upon the theory that the commercial specialty promise or order may be rendered conditional by a condition implied in law arrive at this result apparently in the following manner, to illustrate: M. executes and delivers his promissory note to P. The commercial specialty promise reads: "I promise to pay P. or order, $100," there being no language connected with this promise which in any sense expressly qualifies the duty therein evidenced. The same instrument, let us suppose, contains a recital of an executory contract between the maker and the payee, and also contains an assertion that the note grew out of this contract transaction. Looking at the simple contract alone, if it be found that under the law of simple contracts, there exists therein any condition, either express or implied in law, precedent or subsequent to the duty of M. to perform his simple contract obligation, it is possible to urge that this condition will also operate to qualify the commercial specialty promise. This result can be reached only by holding that the commercial specialty promise may be rendered conditional by the application of the doctrine of conditions implied in law. And this is true even in a case where the recital of the simple contract shows that there is an express condition precedent or subsequent to the duty of M. to perform his simple contract obligation. In such a situation the maker, M., has simply made two promises to pay that which, from a business point of view, is a single debt. The fact that he has expressly conditioned one of these promises-the simple contract promise-does not thereby evidence an intention to condition the commercial specialty promise. In fact, the contrary inference is the more reasonable. It is believed that the better theory is that a condition implied in law should not render the commercial specialty promise or order conditional; that the only way to condition such a promise or order is by the definite incorporation, in the commercial specialty promise, of appropriate language which is sufficient to create an express condition precedent or subsequent to the duty of the maker or drawee to pay. Such a rule will be commercially more desirable, because a purchaser may then be able to decide more readily whether the instrument offered to him is, or is not, negotiable. If commercial instruments are to be rendered conditional by every kind of conditions implied in law, the free' circulation of commercial paper is clogged beyond a point which is desirable or necessary. Moreover, the interpretation here indicated tends to bring this portion of the law into greater harmony with the rule that a purchaser for value before maturity of a negotiable instrument will take free from personal defenses and equities of ownership unless he takes in bad faith. The same considerations of commercial expediency underlie both rules. One who purchases an instrument which is conditioned only by implication of law is not in the situation analogous to that of a purchaser in bad faith. A purchaser of an instrument conditioned only by implication is in substantially the same position, as far as operative facts are concerned, as a purchaser of an unquestioned negotiable instrument with constructive notice of outstanding equities and defenses. The purchaser with constructive notice is not deemed to be a purchaser in bad faith. On parity of reasoning, one who purchases an instrument which contains a promise or order conditioned only by implication arising from real conditions in a different contract, mortgage, or other transaction, should take the instrument as it appears to be as an unconditional promise or order. SECTION 5.-TIME OF PAYMENT MUST BE CERTAIN Commercial paper would not be suitable for circulation if the holder is unable to ascertain at what time the right to demand payment is to arise. The law, therefore, requires certainty in the time of payment. But what degree of certainty will satisfy this requirement? This question is one of considerable difficulty. Before the adoption of the Negotiable Instruments Law, the test of certainty was not clearly worked out; nor has the present statute done very much toward solving some of these questions. There are four possible ways of fixing maturity: (1) By designating a future day; e. g., June 1, 1935. (2) By giving an option to the holder to demand payment at any time. (3) By giving an option to the obligor-maker, acceptor, etc.-to pay when he sees fit. (4) By declaring that the instrument shall mature upon the happening of some event over which neither of the parties has any control. Combinations of these various methods of fixing a time of maturity may be made. An instrument may bear a fixed maturity, subject to an earlier payment (a) at the option of the maker; (b) at the option of the holder; (c) upon the performance of a specified act by the maker or upon the occurrence of some extrinsic event. The sections of the Negotiable Instruments Law involved are as follows: Section 1, subsec. 3. An instrument to be negotiable must be payable on demand or at a fixed or determinable future time. Section 7. An instrument is payable on demand: (1) When it is expressed to be payable on demand, or at sight, or on presentation; or (2) in which no time of payment is expressed; (3) where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person so issuing, accepting, or indorsing it, payable on demand. Section 4. An instrument is payable at a determinable future time within the meaning of the act, which is expressed to be payable: (1) At a fixed period after date or sight; or (2) on or before a fixed or determinable future time specified therein; or (3) on or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time of happening be uncertain. An instrument payable upon a contingency is not negotiable and the happening of the event does not cure the defect. By implication, the following section is involved: Section 2. The sum payable is a sum certain within the meaning of this act, although it is to be paid * (2) by stated installments; or (3) by stated installments, with a provision that upon default in payment of any installment or of interest the whole shall become due. Before passing to a consideration of the cases, it may be well to note here that we are now discussing a series of situations anal ogous to, but essentially different from, the problems taken up under the head of conditional promises. A promise to pay upon condition is different from an unconditional promise to pay at some indeterminate future time. It is important to note this because the requirement of certainty in the time of payment adds another element. Proof that the promise is unconditional is not sufficient. The proof must go further and show that this unconditional promise is payable at some fixed or determinable future time. Section 7 of the Negotiable Instruments Law, above quoted, shows that there are two general situations where an instrument is payable on demand; i. e., where the instrument is made expressly payable on demand, and where by implication the instrument is payable on demand. Where the words "payable on demand," "payable at sight," or "payable on presentation" are used the instrument is expressly made payable on demand. It is perhaps more common to find the words "on demand" in promissory notes, and the words "at sight" in bills of exchange. No doubt other words could be used which would have the same legal effect as those which are here referred to. An instrument will be deemed payable on demand wherever there is no language used thereon which deals with the matter of the time of payment. A fair interpretation of such an instrument is that it was intended to confer upon the holder the right to demand payment at any time. So the law provides that where no time of payment is expressed the instrument is payable on demand. A check furnishes a common illustration. It appears from an examination of sections 4 and 2, that there are two general situations which satisfy the requirement that the instrument be payable at a fixed or determinable future time: (1) Where the instrument has but one date of maturity and that date is fixed, either (a) by designating it in the usual way by the date of month and year, or (b) by fixing it with reference to some event which is bound to happen, though the time of happening is uncertain; or (2) when the instrument bears two possible dates of maturity, the one, usually the later one, being fixed in accordance with rule (1) (a) or (b) the other or earlier date of maturity being fixed by the performance of some act by the holder, or by maker, or, by the occurrence of some specified event which is not wholly within the control of either party. To restate the situation, we have two general questions: (1) When is an unconditional promise or order payable on demand? (2) When is an unconditional promise or order payable at a determinable future time? No independent consideration of question 1 need be given, for this question is sufficiently adverted to in the cases following which deal primarily with situations involving the second question. The principal difficulty arises when the question presented is: What constitutes a determinable future time? This question is involved in the two situations noted above: B.&B.BUS.LAW-42 (a) Where there is but one maturity and this maturity is fixed by reference to a specified date or to an event which is bound to happen; (b) where there are two dates of maturity, the one fixed by the designation of a specified date or an event bound to happen but subject to acceleration into an earlier maturity upon the exercise of an option by the holder to demand payment, or of an option in the obligor to pay before the fixed date, or upon the occurrence of some event which is not wholly within the control of either the holder or the obligor named in the instrument. In short: (1) When is an event bound to happen, within the meaning of the rule requiring certainty in the time of payment? (2) When will the performance of an act referred to in an acceleration clause be deemed to be at option of the holder or of the obligor, as distinguished from the occurrence of some contingent event which is not within the control of either the holder or the obligor? It may be remarked that the last sentence of section 4, subsection 3, which reads: "An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect"-in reality adds nothing to the foregoing affirmative requirements with respect to certainty in the time of payment. MCCLENATHAN v. DAVIS. (Supreme Court of Illinois, 1909. 243 III. 87, 90 N. E. 265, Action by C. V. McClenathan against Emmons Davis and another. A judgment for plaintiff was affirmed by the Appellate Court for the Third District, and defendant Davis appeals. FARMER, C. J. This is an action of assumpsit, brought by appellee, as indorsee, against appellant, Emmons Davis, as maker, and Elizabeth Gamble, as indorser and guarantor, of the following written in strument: "For value received I promise to pay Elizabeth Gamble, or order, the sum of fifteen hundred dollars in twelve months after I shall become the legal owner of one hundred and fifteen acres of land conveyed to me by my father, H. V. Davis, reserving to him, H. V. Davis, a life estate in said land, by which at his death I am to become possessed of and the owner in fee of said one hundred and fifteen acres, situated in the southeast corner of section 30, in township 18 north, range 11 east of the third P. M., Champaign county, Illinois. "March 6, 1894. "Witness: Thomas J. Smith. * "Emmons Davis. "Elizabeth Gamble." * Appellant's contention is that the instrument sued on is not a promissory note, because it is not payable at a specified time which must certainly arrive, but is payable upon a contingency, which may or may not happen. The contingency upon which it is argued the payment depends is the actual ownership and possession of the land by appellant, and it is said this may never happen, because it may |