note is not paid at maturity, that it is at the option of the holder hereof to extend, as he deems proper, the payment of the above note, and that said extension shall not in any manner release one or either of us from the payment hereof." Defendant contends that the note sued on as a negotiable instrument is not negotiable on account of this provision, and that therefore the indorsee could not bring suit thereon in his own name according to the rules of negotiable paper.

Point Involved: Whether the instrument sued on is rendered non-negotiable by the provision stated.

MR. JUSTICE CARTER: 66#

"The contention that said quoted words gave the holder the authority to extend the note as he pleased; that it could not be known what extensions he might grant, and that therefore the time when the note become due and payable was uncertain and indeterminate, rendering the note non-negotiable, cannot be sustained. The note expressly provides that such option to extend can be exercised only upon the failure of the payors to make payment at its maturity. The time of payment is certain. The note is dated February 22, 1908, and payable one year thereafter.

*

Question 428: What were the provisions of this note? What reasons did the Court give for holding it negotiable?

(Note: It is certainly questionable whether a holder could extend time of payment without the consent of the maker. The obvious purpose of this provision is as explained in the prior note.)

Case 429. First National Bank of New Windsor v. Bynum, 84 N. C. 24.

"But there is another serious objection to the claim set up for the negotiability of this instrument. It stipulates that the payee shall have power to declare the note due at any time they may deem the note insecure, even

before the maturity of the same. This divests it of the quality of certainty in the time of payment.

The time of payment may be hastened at the option of the payees and is therefore uncertain.

Question 429: A note providing that the holder shall have the option to declare its maturity at any time he deems himself insecure is it negotiable?

Case 430. Nickell v. Bradshaw, 94 Ore. 580, 183 Pac. 12.

Facts; A note given by R. H. Bradshaw to order of Effie May Terrell, and by her indorsed to Belle Nickell was payable five years from date but also contained the provision "due if ranch is sold or mortgaged."

Point Involved: Whether the quoted language destroys negotiability.

HARRIS, J. delivered the opinion of the Court:

"The provisions of the Negotiable Instrument Law (L. O. L. 6017, 5834, and 5837) are only declaratory of the law merchant as it existed in most jurisdictions; and hence judicial opinions expressed before the enactment of the statute are not without weight in the solution of the problem confronting us. Rossville State Bank v. Heslet, 84 Kan. 315, 33 L. R. A. (N. S.) 738, 113 Pac. 1052, 3 R. C. L. 907, 8 C. J. 135; Eaton & G. Com. Paper, 213. If the words, 'due if ranch is sold or mortgaged,' are omitted from the instrument, it concededly becomes a negotiable promissory note within the meaning of 6017, L. O. L., because it contains a promise to pay 'five years from date,' which is, speaking as of the date of the note, a fixed future time. If, on the other hand, the words, 'five years from date,' are erased, the paper is admittedly transformed into a non-negotiable instrument, because it then becomes payable 'if ranch is sold or mortgaged,' which, if standing alone and viewed by itself, was, at the time of the execution of the instrument, a 'contingency' within the meaning of 5837, L. O. L. We are not permitted, however, to cancel any word found

in the instrument, and hence the whole of the paper must be considered in determining whether the instrument is or is not negotiable. Finley v. Smith, 165 Ky. 445, L. R. A. 1915F, 777, 780, 177 S. W. 262. It will be observed that the writing does not in express terms say that the debt becomes due if the ranch is sold or morgaged before 'five years from date,' and yet such is the obvious intent and meaning of the whole writing. The debt becomes due at all events 'five years from date,' and the debt cannot extend beyond that fixed, certain, and definite period, because the moment the five-year period ends that debt is due, and any other interpretation of the writing would completely nullify the words 'five years from date,' but, if the ranch is sold or mortgaged prior to the expiration of that fixed future time, then the promisor agrees to pay the debt at the time of such sale or mortgage. Dobbins v. Oberman, 17 Neb. 163, 22 N. W. 356.

"The words, 'due if ranch is sold or mortgaged,' do not extend the date of payment, but upon the contrary they serve only to accelerate the maturity of the debt. Stated broadly, the overwhelming weight of authority is to the effect that, where a note is made payable on a definite day and also contains promise to pay at an earlier time, the instrument is not rendered non-negotiable by the acceleration cause. Kiskadden v. Allen, 7 Colo. 206, 3 Pac. 221; Walker v. Woollen, 54 Ind. 164, 23 Am. Rep. 639; Charlton v. Reed, 61 Iowa, 166, 47 Am. Rep. 808, 16 N. W. 64; Dobbins v. Oberman, supra; Ernst v. Steckman, 74 Pa. 13, 15 Am. Rep. 542; Joergenson v. Joergenson, 28 Wash. 477, 92 Am. St. Rep. 888, 68 Pac. 913; Chicago R. Equipment Co. v. Merchants' Nat. Bank, 136 U. S. 268, 34 L. ed. 349, 10 Sup. Ct. Rep. 999; Smith v. Nelson Land & Cattle Co., 128 C. C. A. 512, 212 Fed. 56; White v. Hatcher, 135 Tenn. 609, 188 S. W. 61; Bright v. Offield, 81 Wash. 442, 143 Pac. 159; Utah State Nat. Bank v. Smith, 180 Cal. 1, 179 Pac. 160; First Nat. Bank v. Barrett, 52 Mont. 359, 157 Pac. 951; Siegel, C. & Co. v. Chicago Trust & Sav. Bank, 131 Ill. 569, 7 L. R. A. 537, 19 Am. St. Rep. 51, 23 N. E. 417, 3 R. C. L. 908; Selover,

Neg. Inst. 2d ed. 70; Eaton & G. Com. Paper, 220. See also Page v. Ford, 65 Or. 450, 469, 45 L. R. A. (N. S.) 247, 131 Pac. 1013, Ann. Cas. 1915A, 1048. The books contain a variety of cases involving acceleration clauses. More common illustrations are found in instruments which provide that a default in the payment of interest or in the payment of an instalment shall mature the debt. Other familiar examples are furnished by adjudications where a series of notes have been given for a single debt, with a provision in each note that default in the payment of any shall mature all the unpaid notes. While nearly all the courts have decided that a default in the payment of interest or in the payment of an instalment, or a failure to pay one of a series of notes, is such an acceleration clause as does not destroy the negotiability of an instrument, yet there are recorded instances where courts have held that acceleration clauses of the kind mentioned impair the negotiability of instruments otherwise negotiable.

"As already stated, the general principle has been firmly established, in despite of occasional dissenting voices, that an acceleration clause does not necessarily destroy the negotiability of an instrument. The chief difficulty, however, is encountered whenever an attempt is made to formulate a rule by which to determine the validity of all acceleration provisions; and it is probably impossible to formulate, even in the most general language, any rule which will include all acceleration provisions that have been held sufficient, and at the same time serve as a safe and certain guide in all jurisdictions. This difficulty is neither greater nor less now than it was previous to the adoption of the Negotiable Instruments Law. For example, there is a class of cases dealing with instruments having provisions to the effect that, if at any time the holder of the note deems himself insecure, he may declare the debt due; or to the effect that the holder may, if he deems himself insecure, call upon the maker for additional security when the value of the security given at the time of the execution of the writing becomes im

paired, and if the maker fails to respond with additional security the holder may declare the debt due. The adjudications assignable to this class are divided in their views; but the majority of the cases decided under the provisions of the Negotiable Instruments Law, as well as the majority of those decided in jurisdictions where the Negotiable Instrument Law had not yet been adopted, have ruled that this kind of a condition in an acceleration clause renders the instrument non-negotiable. Reynolds v. Vint, 73 Or. 528, 144 Pac. 526; Western Farquhar Mach. Co. v. Burnett, 82 Or. 174, 178, 161 Pac. 384; Holliday State Bank v. Hoffman, 85 Kan. 71, 35 L. R. A. (N. S.) 390, 116 Pac. 239, Ann. Cas. 1912D, 1; Puget Sound State Bank v. Washington Paving Co., 94 Wash. 504, 162 Pac. 870; First Nat. Bank v. Bynum, 84 N. C. 24, 37 Am. Rep. 604; Carroll County Sav. Bank v. Strother, 28 S. C. 504, 6 S. E. 313; Kimpton v. Studebaker Bros. Co., 34 Idaho, 552, 125 Am. St. Rep. 185, 94 Pac. 1039, 14 Ann. Cas. 1126; Brght v. Offield, 81 Wash. 442, 143 Pac. 159; First Nat. Bank v. Russel, 124 Tenn. 618, 139 S. W. 734, Ann. Cas. 1913A, 203. Contra: Empire Nat. Bank v. High Grade Oil Ref. Co., 260 Pa. 255, 103 Atl. 602; Finley v. Smith, 165 Ky. 445, L. R. A. 1915F, 777, 177 S. W. 262; Kennedy v. Broderick, L. R. A. 1915B, 472, 132 C. C. A. 381, 216 Fed. 137. The cases holding that an instrument is not negotiable if it contains a clause giving the holder the right to declare the debt due if he deems himself insecure are based primarily upon the objection that the date of maturity is placed wholly under the control of the holder, is completely dependent upon his whim or caprice, and is independent of any act done or omitted by the maker; and, if there is the further stipulation that the maker will furnish added security when called upon, then there is, of course, an affirmative promise of the maker to do an act in addition to his promise to pay money. Puget Sound State Bank v. Washington Paving Co., 94 Wash. 504, 162 Pac. 874; Holliday State Bank v. Hoffman, 85 Kan. 71, 35 L. R. A.