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Principle: As already observed, the note as executed is stipulated to mature on a date fixed and certain. The provision for extension does not put it in the power of the holder to extend the note without the concurrence of the maker, and the latter may not force an extension on the holder. When they concur, a new date of maturity is fixed, and one no less certain than the original date. The sureties merely assent in advance thereto and bind themselves to waive the right of defense that might otherwise accrue; or to be bound by the supplemental contract which fixes the later maturity date. There is no agreement embodied in the note operating to bind the holder to extend. There is incorporated no promise to do anything that would, of its force, affect the unconditional promise to pay on the date named in instrument. There is nothing in the note that looks towards an indefinite extension of time of payment.

Precedent: Cases that pass on this question may be found collated in 8 Corp. Juris, 140, and in notes to First Nat. Bank v. Buttery, 17 Ann. Cas. 55 and 16 L. R. A. (N. S.) 878; Longmont Nat. Bank v. Loukonen, Ann. Cas. 1914B, 210; Anniston Loan, etc., Co. v. Stickney, 31 L. R. A. 234; Rossville State Bank v. Heslet, 33 L. R. A. (N. S.) 738; State Bank of Halstad v. Bilstad, 49 L. R. A. (N. S.) 132. The cases which have appeared since the preparation of the last of these notes demonstrate that the above is fast becoming the settled construction of the Negotiable Instruments Act. First Nat. Bank v. Stover, 21 N. M. 453, 155 Pac. 905, L. R. A. 1916D, 1280, Ann. Cas. 1918B, 145; First Nat. Bank v. Baldwin, 100 Neb. 25, 158 N. W. 371; City Nat. Bank v. Kelly, 51 Okl. 445, 151 Pac. 1172; Davis v. McColl, 179 Mo. App. 198, 166 S. W. 1113.

Policy: Such a provision for extension not infrequently operates to the advantage of a surety in permitting the holder, at his option, safely to give grace to the maker, on the latter's application; when otherwise, pressure for payment might come inconveniently upon both maker and surety. It is common practice to embody such a provision in notes; the clause tends to give currency to the note, and the policy of the law should be in furtherance of the negotiability of such widely used instruments when they fairly fall within the spirit of the provisions of the uniform act. White v. Hatcher, 135 Tenn. 609, 188 S. W. 61; . Pemiscot County Bank v. Bank, 132 Tenn, 152, 177 S. W. 74.

a copy:

ROBERTS v. SNOW.

(Supreme Court of Nebraska, 1889. 27 Neb. 425, 43 N. W. 241.) REESE, C. J. This action was instituted in the district court of Holt county upon a written instrument of which the following is "Marshalltown, Iowa, July 16, 1877. "For value received I hereby promise to pay to Peter Housel, or order, four hundred dollars ($400), with ten per cent. interest per annum, payable semi-annually in advance, and on default of prompt payment of the interest for thirty days after it is due, then this note, principal and interest, shall be due and collectible without defalcation or discount, together with an attorney fee of ten per cent. for collection. [Signed] B. L. Snow."

"Attest: C. C. Housel."

Upon the back of the instrument are the following indorsements: "Pay to the order of C. C. Housel. Peter Housel, by C. C. Housel, Executor of the Estate of Peter Housel, Deceased." "Pay to the order of B. F. Roberts. C. C. Housel." *

*

The cause is presented to this court by plaintiff by proceeding in error, presenting a large number of assignments, but it is not deemed necessary to examine all. It appears that the question underlying the whole controversy in this case is as to the character of the instrument on which the suit was founded. It is insisted by plaintiff in error that the writing is a negotiable promissory note, and is entitled to be treated as such, with all the incidents which attach to negotiable paper; while upon the other hand it was contended by defendant in error that it is not a negotiable instrument, and that therefore the action by plaintiff in error could not be maintained, he not being the actual owner thereof by assignment. This contention is based upon the fact that the instrument does not fix a time certain within which the money must be paid.

It is our opinion that the instrument in question falls clearly within the definition of commercial paper, and that it was payable on demand, at any time after its execution, and should have been treated by the district court as a promissory note payable upon demand. In 1 Randolph on Commercial Paper, § 119, it is said: "If no time of payment is expressed, which is usually the case in checks, and frequently so in promissory notes and drafts, the instrument is, by intendment of law, payable on demand, and is as valid and negotiable as though the time of payment were fully expressed"-citing a large number of authorities, among which are Jones v. Brown, 11 Ohio St. 601; Holmes v. West, 17 Cal. 623; Porter v. Porter, 51 Me. 376; Keyes v. Fenstermaker, 24 Cal. 329; Bank v. Price, 52 Iowa, 570, 3 N. W. 639; Libby v. Mikelborg, 28 Minn. 38, 8 N. W. 903.

The rule seems to be that in cases of this kind the legal intend

ment, that the notes are payable upon demand, cannot be changed by parol proof any more than could the expressed terms of a written. instrument be changed. See Thompson v. Ketcham, 8 Johns. (N. Y.) 192, 5 Am. Dec. 332; Koehring v. Muemminghoff, 61 Mo. 403, 21 Am. Rep. 402; Self v. King, 28 Tex. 552.

But it may be contended that it is shown upon the face of the note itself that such was not the intention of the parties at the time of its execution, for it is provided that the interest shall be payable semiannually, and that the note shall become due and collectible on the expiration of 30 days after default of the payment of the interest; but this would make no difference as far as the note was concerned. As held in Jones v. Brown, supra, the fact that the parties provided for the payment of the interest in case the note should not be paid immediately, would not change the legal effect of the contract. Upon this subject, see Loring v. Gurney, 5 Pick. (Mass.) 15; Meador v. Bank, 56 Ga. 605; Holmes v. West, 17 Cal. 623.

Aside from what would seem a rather inflexible rule of law, as applied to instruments of the kind under consideration, a careful examination of the note in question satisfies us that no other construction can be given to its language.

There is nothing upon the face of the instrument itself, nor pleaded by the answer, nor submitted in the evidence in the case, which shows that any relation existed between the parties to the instrument by which it could be presumed or supposed that it was their purpose that the note should never mature. If it cannot be treated as a promissory note payable upon demand, then the only event which could occur by which the note could be made to mature, according to its own language, would be a default of 30 days in the payment of the semi-annual interest; and if such default should never be made, the note would never mature, and therefore could never be collected except by the voluntary payment of the maker. This, evidently, was not the intention of the parties to the instrument. Reversed and remanded. 85

WISCONSIN YEARLY MEETING OF FREEWILL BAPTISTS v. BABLER.

(Supreme Court of Wisconsin, 1902. 115 Wis. 289, 91 N. W. 678.)

This is an action in equity, brought by the respondent, a corporation, to set aside the sale and transfer to the appellant of a certain promissory note and mortgage, which was the property of the respondent, and to recover the possession of the same. The case was tried by the court, and the evidence showed that the respondent was a religious corporation organized under chapter 23 of the Private and 35 Part of the opinion is omitted.

SM. & M.B.& N. (2D ED.)-7

Local Laws of Wisconsin for 1867, and had a board of six trustees, its active officers being a president, secretary, and treasurer; that said corporation never adopted any by-laws as to the management of its affairs, and had no principal office; that from time to time it received donations of money, which the trustees put in the care of the treasurer, to be loaned, and the interest to be used for the support of weak churches and indigent ministers of the denomination; that one J. F. Sears was treasurer of the corporation from the year 1896 up to June 1, 1901, when he died; that on March 15, 1901, Sears loaned to one Prisk, from the funds of the corporation, $4,800, and took a note therefor, payable to the order of "J. F. Sears, Treas., or his successor," payable five years after date, with interest at 51⁄2 per cent.; that such note contained a power of attorney, which authorized a confession of judgment at any time thereafter, whether due or not; and said note was secured by a real estate mortgage in which the mortgagee is described as "J. F. Sears, Treas., or his successor in office of the Wisconsin Yearly Meeting of Freewill Baptists"; that on April 22, 1901, Sears sold and delivered said note and mortgage to appellant for the sum of $4,827.13, the appellant paying therefor $3,900 in checks, and turning over to Sears two notes of $500 each, which had before that time been given by Sears to the appellant for borrowed money, Sears paying back to the appellant $133.53; that the appellant, Babler, could not read English, but that the note was read to him by Sears, and that the mortgage was present, and delivered at the same time, but was not read by Babler; that Sears converted the money which he received from Babler to his own use, and that the corporation has received no part of it; that the sale of the note and mortgage to the appellant was unauthorized, and without the knowledge of the trustees; that Babler neglected to make inquiry as to whether Sears had authority to sell the note in question.

Upon these facts the circuit court found that the defendant was negligent in purchasing the note and mortgage without inquiry; that the note was nonnegotiable; and that the plaintiff was entitled to a judgment setting aside the transfer of the note and mortgage, and adjudging that the same be delivered by the defendant to the plaintiff. From this judgment the defendant appeals.36

WINSLOW, J. (after stating the facts as above). It is entirely clear from the evidence in the case and from the findings of fact that the note and mortgage in question were the property of the plaintiff corporation, and that no express authority had ever been given to Sears to sell them. These being the facts, the defendant, Babler,, could acquire no title to the note by his transaction with Sears unless the note was negotiable paper, or unless Sears had either the apparent ownership or apparent authority to sell it, so that the corporation

36 The arguments of counsel and part of the opinion are omitted.

would be estopped to deny the act. It is quite certain that the note was not negotiable, because by the power of attorney which it contained judgment could be entered upon it at any time after its date, whether due or not. Thus the time of payment depends upon the whim or caprice of the holder, and is absolutely uncertain. This deprives the note of its negotiability. Continental Nat. Bank v. McGeoch, 73 Wis. 332, 41 N. W. 409; W. W. Kimball Co. v. Mellon, 80 Wis. 133, 48 N. W. 1100.

Chapter 356, Laws 1899 (the negotiable instrument law), provides that the negotiable character of an instrument is not affected by a provision authorizing a confession of judgment if the instrument is not paid at maturity. Section 1675-5, subd. 2. Upon familiar principles of statutory construction this provision makes a note like the present nonnegotiable. Nor can it be said that Sears had such apparent ownership or authority to sell the note as would estop the plaintiff corporation from denying his, act. The note, upon its face, shows that it was held by Sears in a representative capacity merely. * * *

Judgment affirmed.

THORP v. MINDEMAN et al.

(Supreme Court of Wisconsin, 1904. 123 Wis. 149, 101 N. W. 417, 68 L. R. A. 146, 107 Am. St. Rep. 1003.)

This is an action to foreclose a note and mortgage given by the defendants Mindeman and wife to one Henry Herman, the defense being an entire want of consideration. The note was a promissory note for $6,500, dated December 11, 1900, payable three years after date, with interest at 5 per cent. per annum, semiannually, and contained the following provisions inserted before the signature: "The payment of this note is secured by a mortgage of even date herewith on real estate. If default shall be made in the payment 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 accompanying the note contained the following provisions: "Provided, always, and these presents are upon this express condition, that if the said parties of the first part, their heirs, executors and administrators, shall pay or cause to be paid to the said party of the second part, his heirs, executors, administrators or assigns, the just and full sum of sixty-five hundred ($6,500) dollars three years after date with interest at 5 per cent. per annum, interest

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