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its amount, and the rate of interest, the amount of interest payable at maturity is a mere matter of computation. The same result follows if the promise is simply to pay interest, without specifying a rate, for the legal rate is then payable. It is true that if the instrument is not paid at maturity, when, if ever, it will be paid is uncertain, and that in consequence the amount of interest finally payable can not be ascertained from the instrument. This, however, is immaterial for the canon of certainty refers to the maturity of the instrument. For the same reason it is held that bills and notes specifying different rates of interest, before and after maturity, are certain in amount. For example the following is a valid note (29):

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$100.

“Good Thunder, July 24, 1882. For value received on or before the first day of January, 1884, I, or we, or either of us, promise to pay to the order of D. M. Osborne and Co. the sum of one hundred dollars, at the office of Gebhard and Moore, in Mankato, with interest at ten per cent. per annum from date until paid; seven, if paid when due.

W. J. B. Crane."

§ 18. Costs of collection and attorney's fees. On the same principle, a stipulation to pay in addition to principal and interest, costs of collection and attorney's fees, if the bill or note is not paid at maturity, does not affect its negotiability. The sum payable at maturity is certain (30).

(29) Smith v. Crane, 33 Minn. 144.
(30) Gara v. Louisville Banking Co., 11 Bush 180 (Ky.).

$ 19. Instruments payable with exchange. An exception to the requirement of certainty is based upon the commercial usage of making bills and notes payable at one place, with exchange on another. This usage is recognized, although its recognition is technically a violation of the canon of certainty. Thus a note payable in St. Paul, Minn., "with current exchange on New York City” is good (31).

$ 20. Instruments payable in instalments. A bill or note payable in instalments, for example, $100 in ten payments of $10 each every 30 days, is unquestionably certain as to amount. So also is such an instrument which further provides that, in case of a default in the payment of any instalment, the whole amount shall at once become due. Whether such a stipulation for accelerating payment makes the instrument uncertain as to time of payment will be considered below. The N. I. L. thus states the law:

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 instalments; or

3. By stated instalments, with a provision that upon default in payment of any instalment 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.

(31) Hastings v. Thompson, 54 Minn, 184,

$21. Promise or order must be certain as to the time of payment. There is a literal compliance with this rule in the ordinary bill or note payable “on Jan. 1, 1909," or “10 days after date." The familiar case of negotiable instruments payable on demand is an exception based on business usage. Notwithstanding the uncertainty of the time of death, a promise in this form: “Thirty days after death, I promise to pay Cornelius Carnwright $1500, with interest,” is held a promissory note (32). So also, an instrument payable at the maker's option on or before a day named (33), or “within one year after date” (34) is a promissory note. Further, a note for a specified sum payable in instalments, the size of which depends upon the maker's option, is negotiable paper. For example the following was held a promissory note in Cooke v. Horn (35):

£170.

“25th April, 1872. We promise to pay M. H. Cooke and Co. £170, with interest thereon at the rate of 5 per cent. per annum, as follows: the first payment, to wit, £40 or more, to be made on the 1st Feb., 1873, and £5 on the first day of each month following, until this note and interest shall be fully satisfied. And in case default shall be made in payment of any of the said instalments, the full amount then remaining due in respect of the said note and interest shall be forthwith

payable.”

Such an instrument, it is said by the court, is no more un

(32) Carnwright v. Gray, 127 N. Y. 92.
(33) Mattison v. Marks, 31 Mich. 421.
(34) Leader v. Plante, 95 Me. 339.
(35) 29 Law Times Reps. 369.

certain as to the time of payment than a note payable "on or before" a given date. The time within which, at the latest, the note must be paid is described in it. Again, a bill or note payable in instalments, with a provision that upon default in the payment of any instalment the whole sum shall become payable, is held for the same reason as in Cooke v. Horn to be sufficiently certain as to the time of payment (36). On the other hand, the following instrument is held not to be a note:

“For value received, I promise to pay Oliver James Rice or order the sum of $1500 when he is 21 years of age with interest from date. (Sgd.) Rachel G. Rice. (Dated) Mount Morns, Jan. 1, 1890,”

because Oliver might never attain his majority (37). A rule which would state the effect of these decisions would have to read something like this: A negotiable instrument must be (a) payable on demand, or (b) payable not later than a particular day fixed either in the instrument or with reference to the happening of an event certain to happen, or (c) payable after demand at a date fixed as in (b).

§ 22. Instruments payable on demand.

An instrument is payable on demand: (1) Where it is expressed to be payable on demand, or at sight, or on presentation; or (2) in which no time of payment is expressed" (38).

Thus, a bill or note is sufficient which specifies no day of payment, because by construction it is payable on demand.

(36) Carlon v. Kenealy, 12 Meeson & Welsby, 139.
(37) Rice v. Rice, 60 N. Y. Supp. 97.
(38) Neg. Inst. Law, sec. 7.

But a negotiable instrument must not specify a date of payment, and at the same time give the holder the right to mature the instrument at any time. The specified date of payment precludes the construction that the instrument is payable on demand. For example, an instrument payable five years after date, with a provision that the holder could at his option at any time before maturity enter judgment against the maker for the full amount, is not a promissory note (39). The same reasoning has been applied to instruments in the form of promissory notes payable on a day named, which contained this stipulation: “The makers and indorsers of this obligation further expressly agree that the payee, or his assigns, may extend the time of payment thereof from time to time indefinitely as he or they may see fit.” The courts refuse to treat such a note as payable on demand after the day named, although such seems to be its effect, and hold that it is not negotiable paper (40). A bill or note, then, unless it falls within the definition of a demand instrument, may not give the holder a right to make it payable at his option. It should be noted that this proposition is not inconsistent with the rule previously stated ($ 21) that a note may be made payable on or before a specified date at the maker's option; or if payable in instalments, that it may become due upon the failure to pay one instalment. In neither of these cases is it the holder's option which makes the instrument payable in advance. The N. I. L. provides :

(39) Wisconsin Yearly Meeting v. Babler, 115 Wis. 289. See also Commercial Bank v. Consumers' Co., 16 App. Cases (D. C.) 186; Louisville Co. v. Gray, 123 Ala. 251.

(40) Woodbury v. Roberts, 59 Iowa, 318.

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