subject, in the hands of McCowat as assignee, to all the defenses which the makers had against the original payee. The defendant McCowat appeals. The attorneys for both appellant and respondents agree that the only issue in the case is the negotiability of the note, it having been established that it was procured by fraud on the part of D. Ryrie, the original payee, from whom it had been purchased by appellant. * * * * The Negotiable Instruments Act (Rem. Code, § 3392) declares that an instrument "must contain an unconditional promise or order to pay a sum certain in money" in order to be negotiable. The note in question, in addition to being for a sum named, also contains a promise to pay any taxes assessed upon the note or upon the mortgage securing it. We held, in Bright v. Offield, 81 Wash. 442, 143 Pac. 159, that such a provision in the note renders it nonnegotiable. In that case there was involved a provision in the note for payment of taxes, which constituted an implied rather than a direct promise by the maker to pay them. The court there said: "Since the amount of these taxes, rates, and assessments is uncertain, the amount of recovery would be uncertain. This provision, therefore, renders the note not merely an unconditional promise to pay a sum certain, but also, in necessary effect, a conditional promise to pay an uncertain sum." The fact, as urged by appellant, that there was no law in force in this state for the taxation of notes and mortgages, would not detract from the effect of the rule. There always remains a possibility during the life of such contracts that they may be subjected to the liability of taxation, and a promise in the note to pay any taxes thereon would leave the amount to be paid indeterminate and open to conjecture upon the contingency of future legislation. * * * The finding and conclusion of the court as to the nonnegotiable character of the note in controversy is in accord with the case cited, and, as the case is controlling, the judgment will stand affirmed. HOLLIDAY STATE BANK v. HOFFMAN. (Supreme Court of Kansas, 1911. 85 Kan. 71, 116 Pac. 239, See ante, p. 662, for a report of the case. FINLEY v. SMITH, Banking Com'r, (Court of Appeals of Kentucky, 1915. 165 Ky. 445, 177 S. W. 262, L. R. A. 1915F, 777.) See ante, p. 664, for a report of the case. SECTION 7.-THE SUM TO BE PAID MUST BE CERTAIN The Negotiable Instruments Law provides: Section 1, subsec. 2. An instrument to be negotiable must contain an unconditional promise or order to pay a sum certain in money. Section 2. The sum payable is a sum certain within the meaning of this act, although it is to be paid: (1) With interest; or (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; or (4) With exchange whether at a fixed rate or at the current rate; or (5) With costs of collection or an attorney's fee, in case payment was not made at maturity. McCORNICK v. SWEM et al. (Supreme Court of Utah, 1909. 36 Utah, 6, 102 Pac. 626, 20 Ann. Cas. 1368.) Action by W. S. McCornick, doing business as McCornick & Co. against J. M. Swem and another. From a judgment for plaintiff, defendants appeal. FRICK, J. Respondent, in his complaint, in substance, alleged: That on the 1st day of September, 1904, appellants, at Salt Lake City, Utah, executed and delivered their certain promissory note for the sum of $1,167, payable in four months from said date, to the order of the Northern Light Mining & Milling Company, a corporation, at McCornick & Co.'s Bank, in Salt Lake City, with interest at 10 per cent. per annum. The note also contained the following provision: "In case this note is collected by an attorney, either with or without suit, we hereby agree to pay - dollars attorney fee." It was further alleged: "That, immediately upon the execution and delivery of said note, the same was, before maturity, for a valuable consideration, and in good faith, purchased by this plaintiff (respondent) from the payee thereof, which payee duly indorsed and delivered the same, and plaintiff is now and ever since has been the owner and holder of the same." That no part of the principal or interest of said note has been paid except the sum of $791.22. That $100 is a reasonable attorney's fee. * Appellants' counsel further insists that the note in question was nonnegotiable upon its face because, if it provided for an attorney's fee at all, it was for an indefinite and uncertain sum, and hence destroyed the certainty required in negotiable instruments. Before the adoption of the so-called "negotiable instruments law," the authorities upon this question were in hopeless conflict with, perhaps, the greater number of cases in favor of holding promissory notes containing attorney's fee clauses as negotiable. Since the adoption of that law by a large number of states, including Utah, the holdings have become more uniform, and it is now generally held that a provision in a promissory note that the maker thereof will pay a specific amount named, or a certain per cent. of the amount due, or a reasonable amount, as an attorney's fee, does not affect either the certainty or the negotiability of the instru ment. The further contention is made that the provision in the note, in the form in which it was executed, was, in legal effect, an agreement not to pay an attorney's fee; but, if this is not its effect, then in view that the note did not specify any amount, nor in terms provide for a reasonable sum as an attorney's fee, that this was the same as if no provision to pay an attorney's fee had been incorporated into the note. Counsel have not cited any cases either for or against this proposi tion. As an original proposition, and in view that in cases like the one at bar an attorney's fee is recoverable only by virtue of some agreement, there seems considerable force to the contention made by counsel. We have devoted considerable time in making a somewhat thorough research of both text-books and reports, but have been unable to find either text-writer or case which sustains counsel's contention. Upon the other hand, we have found cases in which it is held that, where the amount is left blank in an attorney's fee clause, it is tantamount to a promise to pay a reasonable sum as an attorney's fee. We feel constrained to follow the cases in which it is so held. * * * In case the amount is not expressly agreed upon, it is the duty of the court to limit the fees to a fair and reasonable sum, in view of all the circumstances. It has frequently been held that, even when the amount has been agreed upon, it is nevertheless subject to control by the courts; and therefore, if it appears to the court that the amount agreed upon is unfair, unjust, or unreasonable, the court should permit a recovery only for what is reasonable under all the circumstances the same as where no amount has been agreed upon. It seems to us, however, and quite a number of the courts so hold, that prima facie the amount agreed upon should be assumed as the proper fee to be allowed, and unless it is clearly obvious to the court, or is made to appear, that the amount stipulated for is unjust, oppressive, or unreasonable, in view of all the circumstances of the case, the stipulated amount should be allowed. The judgment is affirmed. * * * UNION NAT. BANK v. MAYFIELD et al. (Supreme Court of Oklahoma, 1917. 169 Pac. 626.) RUMMONS, C. * * * The sole question involved in this appeal is the negotiability of the promissory note sued upon by plaintiff. The only provision in the note necessary to be considered in determining this question is as follows: "With interest at the rate of 9 per cent. per annum, payable annually from date until due: Provided, however, if the note is paid on or before maturity, interest shall be only 7 per cent." Plaintiff relies for a reversal of this cause upon the case of Security Trust & Savings Bank v. Gleichmann, 50 Okl. 441, 150 Pac. 908, L. R. A. 1915F, 1203. The opinion in that case was written by Commissioner Devereux, following Savings Bank v. Landis, 37 Okl. 530, 132 Pac. 1101, and overruling Randolph v. Hudson, 12 Okl. 516, 74 Pac. 946, and Bracken v. Fidelity Trust Co., 42 Okl. 118, 141 Pac. 6. L. R. A. 1915B, 1216. In the case cited it is held that "a note dated May 1, 1905, which provides, 'with interest from date if not paid when due.' is a negotiable instrument." In Randolph v. Hudson, supra, it is held that a note reading "30 days after date I promise to pay to the order of J. H. Thomas $275.00, with interest at the rate of 12 per cent. from date if not paid at maturity,' was not negotiable." In Citizens' Savings Bank v. Landis, supra, it was held that a note reading "December 1, 1907, after date, for value received, we jointly and severally promise to pay McLaughlin Brothers or order $1,200.00 at the Walters National Bank, of Walters, Oklahoma, with interest at 6 per cent. per annum, before maturity, and thereafter at 10 per cent. per annum until paid, interest payable annually," was a negotiable instrument. In Bracken v. Fidelity Trust Co., supra, it was held that a note, containing the following provisions: "With interest at 6 per cent. per annum before maturity and thereafter with interest at 10 per cent. per annum until paid. Interest payable with note" was nonnegotiable. Since the handing down of the opinion in the case of Security Trust & Savings Bank v. Gleichmann, this court has held in an opinion written by Commissioner Bleakmore, following Farmers' Loan & Trust Co. v. McCoy, 32 Okl. 277, 122 Pac. 125, 40 L. R. A. (N. S.) 177, that a note payable in installments, containing a stipulation that if paid within 15 days from date a discount of 6 per cent. would be allowed was uncertain as to the amount necessary to satisfy it at the time of its execution, and therefore was not negotiable. First National Bank of Iowa City v. Watson, 56 Okl. 495, 155 Pac. 1152. This case is the only one of the cases cited interpreting a promissory note executed since the adoption of the Uniform Negotiable Instruments Act. It is, however, in direct conflict with the case of Security Trust & Savings Bank v. Gleichmann, supra, and in harmony with the opinion of Randolph v. Hudson, supra. In the body of the opinion it is said: "The sum payable—that is, the amount for which, by the terms of the instrument, the maker became liable, and which he might tender and pay in full satisfaction of his obligation-was, at the date thereof, to a certain extent dependent upon his will; he had the right to pay a greater or less sum than the principal; he could, if he saw fit, within the prescribed period, discharge his debt at 94 per cent. or thereafter pay 100 per cent. on the dollar. Under such condition, the sum payable was, at the time of the execution of the instrument, clearly indefinite and uncertain. Unless the rule of the law of merchant which obtained in this jurisdiction with respect to the certainty required in the sum payable in a negotiable instrument has been changed by the statute, supra, such rule still governs, and the note in question is nonnegotiable. In our opinion, it is obvious that the statutory provisions above quoted do not purport to prescribe a rule in this regard different from that recognized by the courts of this state before their enactment, in a case where a promissory note provided for the discount of a principal sum otherwise payable, if at the option of the maker, payment is made before maturity." In the instant case the same criticism of the note sued on occurs as in the case last quoted. The sum to be paid upon the instrument was at the option of the maker. If he chose to pay it on or before maturity, the interest upon the principal was to be computed at the rate of 7 per cent. If he neglected to pay until after maturity, the interest was to be computed at 9 per cent. So that it would be impossible for any one to compute with certainty the amount due upon this note at any date in the future. We think the writer of the opinion in the case of Security Trust & Savings Bank v. Gleichmann, supra, fell into error in applying the rule laid down in Savings Bank v. Landis, supra, to the note in controversy in his case. In the case of Savings Bank v. Landis, supra, there was no uncertainty as to the amount due according to the terms of the note. It was provided that the note should bear interest at 6 per cent. before maturity, and thereafter at the rate of 10 per cent. From the face of the note there could be computed with certainty the amount that would be due thereon at any time in the future; so there was no uncertainty as to the sum payable. In the Security Trust & Savings Bank Case, however, if the note was paid at maturity it bore no interest. A failure to pay at maturity made it bear interest from its date six months prior to maturity. The sum payable, therefore, became indefinite and uncertain, and depended upon the option of the maker. One of the requisites of negotiability under the Uniform Negotiable Instruments Act is that the instrument must contain an unconditioned promise or order to pay a sum certain in money. We think that the note in the instant case fails to comply with the provision of the act as to the interest to be paid, nor does it fall within any of the exceptions contained in sections 4052, 4055, 4056, Revised Laws 1910, supra [Negotiable Instruments Law, §§ 2, 5, and 6]. We feel convinced that the rule laid down in First National Bank of Iowa City v. Watson, supra, is a correct interpretation of our Negotiable Instruments Act, and we therefore follow the rule announced in that case. The case of Security Trust & Savings Bank v. Gleichmann, supra, so far as the rule announced in the sixth syllabus in that case, and so far as the same overrules the case of Randolph v. Hudson, supra, is overruled. The judgment of the court below should be affirmed. SECTION 8.-THE INSTRUMENT MUST BE PAYABLE Previous sections have shown that an instrument to be negotiable (1) must contain a written promise or order; (2) that the promise or order must be unconditional; (3) that the unconditional promise or order must be payable at a fixed or determinable future time; (4) that the promise or order must be to pay in money; (5) that the sum to be paid must be certain. There is the further requirement that the instrument must be payable to order or to bearer. Section 1, subsec. 4. An instrument to be negotiable must be payable to order or to bearer. Negotiable instruments are usually drawn payable to a designated person or order, or simply to bearer. As a matter of safety these words should always be used. But the act does not require that these specific words alone must be used, for Section 10 provides: The instrument need not follow the language of this act, but any terms are sufficient which clearly indicate an intention to conform to the requirements hereof. Instruments payable to order or to bearer are alike only in that either of these words satisfy the requirements that the instrument to be negotiable must contain words of negotiability. In other respects different legal effects are produced. In general, it may be said that an instrument payable to order must be indorsed before it may be negotiated, while an instrument payable to bearer is negotiable by delivery without indorsement. These differences will be further discussed in Chapter II. |