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(N. S.) 390, 116 Pac. 239, Ann. Cas. 1912D, 1; White v. Hatcher, 135 Tenn. 609, 612, 188 S. W. 61.

"It is apparent from what has already been said that some jurisdiction go further than others in their approval of acceleration clauses; and consequently a rule containing language as broad as the rule in some jurisdictions would be too broad for others, and a formula which is only broad enough for the latter would not be broad enough for the former. In this jurisdiction, the holding in Reynolds v. Vint, 73 Or. 528, 144 Pac. 526, and in Western Farquhar Mach. Co. v. Burnett, 82 Or. 174, 161 Pac. 384, condemns acceleration clauses which are entirely under the control of the holder, and completely dependent upon his whim or caprice, independent of any act of the maker; but, since neither of those decisions condemns all acceleration clauses, we have no hesitancy in declaring that we prefer to keep company with the majority of the other jurisdictions by giving approval to certain kinds of acceleration clauses. What we deem to be the better rule is best expressed by language found in Ernst v. Steckman, 74 Pac. 13, 15 Am. Rep. 542, where a note, payable 'twelve months after date (or before, if made out of the sale of W. S. Coffman's Improved Broadcast Seeding Machine),' was held to be negotiable. In concluding the opinion the court there said: "The principle to be deduced from the authorities is this: To constitute a negotiable promissory note, the time or the event for its ultimate payment must be fixed and certain; yet it may be made subject to contingencies, upon the happening of which, prior to the time of its absolute payment, it shall become due. The contingency depends upon some act done or omitted to be done by the maker, or upon the occurrence of some event indicated in the note; and not upon any act of the payee or holder, whereby the note may become due at an earlier day.'

"The principle which was expressed in Ernst v. Steckman was subsequently reiterated and applied by the Supreme Court of the United States in the leading and oft-cited case of Chicago R. Equipment Co. v. Merchants'

Nat. Bank, 136 U. S. 268, 34 L. ed. 349, 10 Sup. Ct. Rep. 999. Further exemplification of this principle may be found in the following precedents where the facts in some instances were exactly like and in all instances were analogous to the facts presented here: Kiskadden v. Allen, 7 Colo. 206, 3 Pac. 221; Elliott v. Beech, 3 Manitoba L. R. 213; 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, 17 Neb. 163, 22 N. W. 356; Joergenson v. Joergenson, 28 Wash. 477, 92 Am. St. Rep. 888, 68 Pac. 913. The ruling in Reynolds v. Vint, 73 Or. 528, 144 Pac. 526, is not inconsistent with the adoption of the principle stated in Ernst v. Steckman, 74 Pa. 13, 15 Am. Rep. 542; White v. Hatcher, 135 Tenn. 609, 612, 188 S. W. 61; First Nat. Bank v. Russell, 124 Tenn. 618, 139 S. W. 734, Ann. Cas. 1913A, 203; Bright v. Offield, 81 Wash. 442, 143 Pac. 161; Joergenson v. Joergenson, 21 Wash. 477, 481, 92 Am. St. Rep. 888, 68 Pac. 913; Holliday State Bank v. Hoffman, 85 Kan. 71, 35 L. R. A. (N. S.) 390, 395, 116 Pac. 239, Ann. Cas. 1912D, 1; Clark v. Skeen, 61 Kan. 526, 49 L. R. A. 190, 78 Am. St. Rep. 337, 60 Pac. 327. The note signed by Bradshaw conforms with the requirements of 5837, L. O. L., and is a negotiable promissory note. Utah State Nat. Bank v. Smith, 180 Cal. 1, 179 Pac. 160; Bright v. Offield, 81 Wash. 442, 143 Pac. 159.

"The respondent has argued that the debt represented by the note automatically became due when the conveyance was made to Frederick T. Lewis on January 18, 1913; but the answer is that the thoroughly established and indeed almost universal, if not the universal, rule is that the acceleration clause is not self-executing, but it merely confers an option upon the holder to treat the debt as due. Belloc v. Davis, 38 Cal. 243, 251; White v. Hatcher, 135 Tenn. 609, 616, 188 S. W. 61; Clark v. Skeen, 61 Kan. 526, 49 L. R. A. 190, 78 Am. St. Rep. 337, 60 Pac. 327; First Nat. Bank v. Parker, 28 Wash. 234, 237, 92 Am. St. Rep. 828, 68 Pac. 756; Keene Five Cent Sav. Bank v. Reid, 59 C. C. A. 225, 123 Fed. 221; Gillette v.

Hodge, 95 C. C. A. 205, 170 Fed. 314; Chicago R. Equipment Co. v. Merchants' Nat. Bank, 136 U. S. 268, 284, 34 L. ed. 349, 354, 10 Sup. Ct. Rep. 999."

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Question 430: (1) If the words "due if ranch is sold or mortgaged" are eliminated from the above case, is it negotiable? (2) If the only provision as to maturity is "due if ranch is sold or mortgaged" is the note negotiable?

(3) Is it the purpose of the words "due if ranch is sold or mortgaged" to extend the time of payment or to accelerate it?

(4) According to the weight of authority and to this case do the accelerating words "due if ranch is sold or mortgaged" when otherwise there is a definite time of payment destroy negotiability?

(5) What, according to this case is the weight of authority as to provisions that authorize the maker to call for additional security if he deems himself insecure and in default of the production of such security declare the note due?

(6) Where a provision as to acceleration is contained in a note, does it automatically execute itself, or give the holder an option?

(Note: Accelerating clauses such as the one in question do not destroy negotiability according to the above case and the weight of authority. A divergence of view prevails in reference to the right to declare the note due if additional collateral is called for and not produced. It seems unfortunate that the sponsors of the Uniform Act did not see fit to include in the Act some definite provision on this point.)

E. Must be Payable to Order or to Bearer.

§ 415. (Nego. Instru., Sec. 24.) In general.

Case 431. Negotiable Instruments Act, Sec. 1. "An instrument to be negotiable

payable to order or to bearer."

must be

Question 431: What are "words of negotiability"? Are they essential to negotiability?

Case 432. Wettlaufer v. Baxter, 125 S. W. Rep. (Ky.) 741

Facts and Point Involved: Stated in opinion.

CARROLL, J.: "In the state of New York, on July 3, 1905, the Buffalo Carriage Top Company executed to Newton J. Baxter, the following note:

666

'January 15, 1906, after date we promise to pay to Newton J. Baxter, $250 at 58 Carroll Street, Buffalo, N. Y.' On the back of the note Newton J. Baxter wrote his name and before its maturity, it was discounted by appellant, Wettlaufer, and delivered to him by Baxter. When the note fell due it was presented to the Buffalo Carriage Top Company for payment and payment refused. Thereupon the note was protested by a notary and notice of its dishonor mailed to Baxter.

Baxter declining to pay the note, suit was brought on it against him.

"The contention of counsel for Baxter is that the note was not a negotiable instrument.

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In an article in 7 Cyc, page 606, by a well known writer on commercial paper it is said: "The usual form of negotiable paper is a provision for payment to "order" or "bearer." These and similar words are in general necessary to its negotiability,

*. Bills payable to bearer were formerly held to be non-negotiable, as being without words of transfer; but they are now recognized as negotiable and transferable by delivery. Making an instrument payable 'to the order of' a certain person is the same as to such person 'or order,' and in like manner to a person named 'or bearer' is the same in effect as 'to bearer.' Without words of negotiability, purchasers take the bill or note subject to all defenses which were available between the original parties, and if it was originally non-negotiable, as against the original parties, it will not be rendered negotiable by subsequent transfer in negotiable form.'

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This note in our opinion, which was payable to Baxter alone, and did not contain the words 'to order' or 'bearer' was not a negotiable instrument.

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Question 432: What was the objection raised to the negotiability of this instrument? Upon what facts did the suit arise? How did the Court dispose of the objection?

§ 416. (Nego. Instru., Sec. 25.) When instrument payable to order.

Case 433. Negotiable Instruments Act, Sec. 8. "It may be drawn payable to the order of:

"1. A payee who is not maker, drawer, or drawee; "2. The drawer or maker; or

"3. The drawee; or

"4. Two or more payees, jointly; or

"5. One or some of several drawees; or

"6. The holder of an office for the time being.

"When the instrument is payable to order the payee must be named or indicated therein with reasonable certainty."

Question 433: In what various ways may an instrument be payable to order?

Case 434. Zander v. N. Y. Security & Trust Co., 78 N. Y. Supp. 900.

Facts: In this case there was a suit brought upon an instrument promising to pay to one Caroline Zander, "or to her assigns." Further facts appear in the opinion.

Point Involved: Whether an instrument payable to one or his assigns may be regarded as payable to order.

"It is alleged by the complaint, and admitted by the demurrer that on or about July 11, 1901, the plaintiff deposited with the defendant the sum of $500, and received therefor the following certificate or receipt:

"The New York Security and Trust Company, New York, July 11, 1901, has received from Caroline Zander the sum of five hundred dollars, of current funds, upon which the said company agrees to allow interest at the annual rate of three per cent. from this date, and on five days' notice will repay, in current funds, the like amount with interest, to the said Caroline Zander or her assigns, on return of this certificate, which is assignable only on the books of the company.'

"Then followed provisions as to the reduction of discontinuance of interest, not material here.

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