either on a fixed day or before it. By this argument any acceleration provision would be valid, yet, as we shall see, many such provisions are held invalid under the Act, and the Iowa court itself has construed the Act to forbid a chattel note with an acceleration provision, because of uncertainty in time.[1] It seems impossible that the Act would be held to permit notes payable "in one hundred years or sooner when the peace conference is over"; "in twenty years or when an aëroplane crosses the Atlantic." This clause of the Act must be restricted to instruments which are literally payable "on or before" a day without further contingencies, so that the holder or maker accelerates by his election; or else we must construe the clause in the light of the law merchant to include other acts of acceleration, if they are business acts incidental to the collection of the instrument. The clause cannot authorize uncommercial acts of acceleration. Indeed, the instruments just considered bear the aspect of agricultural paper rather than commercial. They are open to all the objections which can be urged against notes payable on a contingency without any fixed time limit. They ought to be regarded as simple contracts for the repayment of a loan on peculiar conditions, and not as paper to circulate as a substitute for money.
Judgment Notes
Notes authorizing any attorney of record to confess judgment on behalf of the maker if he does not pay at maturity are negotiable, both at common law[2] and under the Negotiable Instruments Law.[3] However, if judgment can be confessed before maturity, negotiability is denied by decisions before[4] and after the Act.[5] A confession of judgment before maturity does not accelerate payment in some states.[6] It simply gives the holder an immediate judgment lien, which can be enforced by execution after maturity. In other
- ↑ Iowa National Bank v. Carter, 144 Iowa, 715, 123 N. W. 237 (1909).
- ↑ The cases are collected in 8 Corpus Juris, 128.
- ↑ § 5 (2).
- ↑ Overton v. Tyler, 3 Pa. 346 (1846), is the leading case. Richards v. Barlow, 140 Mass. 218, 6 N. E. 68 (1885), accord, is based on the old Massachusetts rule against acceleration provisions.
- ↑ Milton National Bank v. Beaver, 25 Pa. Sup. Ct. 494 (1904); First National Bank of Elgin, Illinois v. Russell, 124 Tenn. 618, 139 S. W. 734 (1911); Wisconsin Yearly Meeting v. Babler, 115 Wis. 289, 91 N. W. 678 (1902).
See other citations in 8 Corpus Juris, 128. - ↑ Overton v. Tyler, supra.
