lutely and at all events' as a (negotiable) promissory note always is."

Question 410: Why was the above note not negotiable?

C.

to Pay a Sum Certain in Money.

§ 411. (Nego. Instru., Sec. 20.) Sum Certain.

Case 411. Smith v. Nightingale, 2 Starkie, 375. Facts: Suit was brought upon the following instrument describing it as a negotiable promissory note.

"October 12, 1807.

"I promise to pay James Eastling, my head carter, the sum of 641. with lawful interest for the same, three months after date, and also all other sums which may be due to him."

(Signed by defendant.)

It was objected that this note was not negotiable.

LORD ELLENBOROUGH was of the opinion that the instrument was too indefinite to be considered as a promissory note; "it contained a promise to pay interest for a sum not specified, and not otherwise ascertained than by a reference to defendant's books; and since the whole constituted one entire promise, it could not be divided into parts.'

Question 411: (1) State the matter in the above instrument which rendered it non-negotiable..

(2) A made out a promissory note to B, or order, promising to pay "500 and taxes. Is the note negotiable? (Smith v.

Myers, 207 Ill. 126.)

Case 412. Thorpe v. Mindeman, 123 Wis. 149; 68 L. R. A. 147.

Facts: Suit to foreclose a note and mortgage. The note contained the following provision: "The payment of this note is secured by a mortgage of even date herewith on real estate. If default shall be made in the pay

ment of interest, or in case of failure to comply with any of the conditions or agreements of the mortgage collateral hereto, then the whole amount of the principal shall, at the option of the mortgagee or his representatives or assigns (notice of such option being hereby expressly waived) become due and payable without any notice whatever." The mortgage referred to contained the usual provisions that the mortgagor (the maker of the note) should pay all taxes, and should keep the property insured, or in default thereof the mortgagee might pay such insurance and add the same to the amount of the note, etc. This note was transferred to the present holder by an indorsement on the back of the note, as follows:

"For value received, I hereby sell, transfer and assign the within note, and the interest coupons thereto attached, to Josephine Thorpe, without recourse."

Defense: That the note was without consideration, and that it is non-negotiable and that the plaintiff, therefore took it, subject to that defense.

Point Involved: Whether a provision in a note that it is secured by a real estate mortgage which contains provisions rendering amount of sum payable uncertain, makes the note payable for a sum uncertain, on the ground that both instruments are one transaction and must be construed together.

WINSLOW, J.:

The general rule that agreements contemporaneously executed and pertaining to the same subject matter are to be construed together is so familiar and so frequently acted upon that it needs only to be stated. The question how far, if at all, this rule imports into a promissory note the collateral agreements contained in an accompanying mortgage, is the question to be considered in this case. * This is a de

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cidedly revolutionary proposition. If it be true both the business world and the courts have been sadly in error for many years. If all the agreements contained in every mortgage are, as matter of law, imported into the note, these propositions would not be true, for

the general rule (except as changed by statute) is that negotiable instruments cannot be bound up and fettered with collateral agreements for the doing of other things besides the payment of money, and retain their negotiable character. Upon the principle contended for, the most simple real estate mortgage would deprive the note which it secured of its negotiable character, because it would import into the note one or more collateral agreements which are not for the payment of money. Fortunately, it is not necessary to give so violent a shock to the well understood principles of law governing the negotiability of notes and mortgages. The appellant's contention really results from a confusion of ideas. They lay down the well-understood proposition that contemporaneous instruments relating to the same subjectmatter are to be construed together, and conclude that it follows that a note and mortgage, though separately executed, are one instrument, and that the note is that instrument. The rule that instruments are to be construed together does not lead to this result. Construing together simply means that, if there be any provisions in one instrument limiting, explaining, or otherwise affecting the provisions of another, they will be given effect as between the parties themselves and all persons charged with notice, so that the intent of the parties may be carried out, and the whole agreement actually made may be effectuated. This does not mean that the provisions of one instrument are imported bodily into another, contrary to the intent of the parties. They may be intended to be separate instruments, and to provide for entirely different things, as in the very case before us. The note is given as evidence of the debt and to fix the terms and time of payment. It is usually complete in itself,-a single, absolute obligation. The purpose of the mortgage is simply to pledge certain property as security for the payment of the note. The agreements which it contains ordinarily have no bearing on the absolute engagements of the note, but simply relate to the preservation of the security given by its terms; such as the payment

of taxes, the insurance of houses, and the like. While the two instruments will be construed together wherever the question as to the nature of the actual transaction becomes material, this does not mean that the mortgage incorporated into the note, nor that the collateral agreements to pay the taxes, or to insure the property, or that the mortgagee might insure in case of default by the mortgagor and have an additional lien therefor, become parts of the note. These agreements pertain to another subject, namely, the preservation intact of the mortgaged property. The promise to pay is one distinct agreement, and, if couched in proper terms, is negotiable. The pledge of real estate to secure that promise is another distinct agreement, which ordinarily is not intended to affect in the least the promise to pay, but only to give a remedy for failure to carry out the promise to pay. The holder of the note may discard the mortgage entirely, and sue and recover on his note; and the fact that a mortgage had been given with the note, containing all manner of agreements relating simply to the preservation of the security, would cut no figure. A pleading alleging such facts would be stricken out as frivolous or irrelevant."

Question 412: Why is a reference in a note to a mortgage or trust deed, given to secure the note, and which contains provisions that may increase the extent of the security by indefinite amounts, without effect to destroy the negotiability of the note?

Case 413. Uniform Negotiable Instruments Act, Sec. 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 in 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 shall not be made at maturity."

Question 413: (1) Suppose a note is for payment of $500 "with interest" stating no rate, does this provision make the note non-negotiable?

(2) A note to pay $1,000, by two installments, that is on the first of May, 1924, and first of November, 1924, the whole $1,000 to become due if default made in payment of first installment. Is the note negotiable?

(3) "The only point raised is whether the instruments sued on are negotiable promissory notes. They are promises to pay specified sums of money in St. Paul, 'with current exchange on New York City,' and the only question is whether this provision as to exchange renders the amount payable uncertain? (Hastings v. Thompson, 54 Minn. 184.) How would you answer this question?

(4) A note for five hundred dollars, with payment of “reasonable attorney's fees if note not paid at maturity." Contended that this clause destroys negotiability. Is this position well taken?

§ 412.

(Nego. Instru., Sec. 21.) Payment in money.

Case 414. Roberts v. Smith, 58 Vermont, 492. Facts: Suit on a note: "November 17, 1849. Two years from date for value received I promise to pay J. S. King or bearer one ounce of gold.

"(sd) E. P. Smith." Defense: That the note is not negotiable, and cannot be sued on as such.

Point Involved: Whether an instrument not payable in money is negotiable.

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VEASEY, J.: such an instrument is not negotiable because not payable in money. It is but a promise to pay, that is, deliver, a certain amount of merchandise definite in amount. Because gold enters into the composition of money, we cannot assume that 'an ounce of gold' is money, or that it has a fixed and unvarying value. Although it has the form of a promissory note, it is not such, and cannot be treated

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