Page:Harvard Law Review Volume 32.djvu/814

778 HARVARD LAW REVIEW to the satisfaction of the holder when demanded ; on failure to do so the note matures at once, and the holder may exercise his power of sale if he desires.^^ Occasionally, the maker is given the option of paying something on account instead of furnishing more security.^^^ Sometimes, the note provides that the collateral also secures any other obligation of the maker due to the payee, or even of any firm of which he is a member. The peculiar acceleration provisions of the obligations of the National Salt Company will be discussed later.^^ The weight of authority holds these provisions for acceleration by depreciation of collateral to be fatal to negotiability, whether accompanied by a promise to furnish more collateral ^^^ or not.^^^ There is, however, good authority in favor of negotiability.^^^ The provisions are said to violate three formal requisites: cer- tainty of amount, certainty of time, and the rule against a promise to do anything but pay money. Let us consider these in turn, re- membering, as we do so, the words of Judge Barclay of Missouri: ^^^ ^ Lincoln v. Perry; Commercial National Bank v. Consumers' Brewing Co.; HoUi- day V. Hoffman; Hibemia Bank v. Dresser; Kennedy v. Broderick; Finley v. Smith; all infra, notes 126 to 128. ^* Commercial National Bank v. Consumers' Brewing Co., infra, note 126, ^* In note 156. ^ Lincoln v. Perry, 66 Fed. 887 (C. C. A. Sth, 1895); Commercial National Bank v. Consumers' Brewing Co., 16 App. D. C. 186 (1900); Strickland v. National Salt Co., 79 N. J. Eq. 182, 81 Atl. 828 (1911); National Salt v. Ingraham, 122 Fed. 40 (C. C. A. 2d, 1903); but see National Salt Co. v. Ingraham, 143 Fed. 805 (C. C. A. 2d, 1906); Holliday v. Hoffman, 85 Kan. 71, 116 Pac. 239 (1911, N. I. L.); Hibemia Bank i;. Dresser, 132 La. 532, 538, 61 So. 561 (1913, N. I. L.). 127 Benny v. Dimn, 26 Pitts. Leg. J. (n. s.), 382, 2 Lack. Leg. N. 135 (1896), prob- ably overruled by 260 Pa. 255, see note 128; Continental National Bank v. McGeoch, 73 Wis. 332, 41 N. W. 409 (1889). But see Commercial National Bank v. Consum- ers' Brewing Co., 16 App. D. C. 186, 203 (1900), semble. And several of the chattel notes held invalid allowed the holder to seize and sell the chattel before maturity, and sue for the deficiency, e. g.. Smith v. Marland, 59 Iowa, 645, 13 N. W. 852 (1882); Kimpton v. Studebaker, 14 Idaho, 552, 94 Pac. 1039 (1908, N. I. L.). South Bend Iron Works v. Paddock, 37 Kan. 510, 15 Pac. 574 (1887); but Iowa distinguishes a note allowing the holder to seize the chattel if he deems himself insecvure, but not permitting sale till maturity. Bank of CarroU v. Taylor, 67 Iowa 572, 25 N. W. 810 (1885). See notes in 35 L, R. A. (n. s.), 392, and L. R. A. 1915 B, 473. ^8 National Salt Co. v. Ingraham, 143 Fed. 805 (C. C. A., 2d, 1906); Kennedy v. Broderick, 216 Fed. 137 (C. C. A. 7th, 1914, N. I. L.), — if in the judgment of the holder collateral depreciates and new collateral is not delivered on demand, note ma- tures at once; Finley v. Smith, 165 Ky. 445, 177 S. W. 262 (1915); Mumford v. Tohnan, 54 111. App. 471 (1894), 157 111. 258, 41 N. E. 617 (1895); Empire Nat. Bank v. High Grade Oil Refining Co., 260 Pa. 255, 103 Atl. 602 (1918). 129 First National Bank of Springfield, Ohio v. Skeen, loi Mo. 683, 687, 14 S. W. 732 (1890).