The Somerset herald. [volume] (Somerset, Pa.) 1870-1936, 1877-07-04

Negotiable Paper.
Important Decision by DC So.
preme Coart-Below we give the
oAinioaof the faprQe cosrt, dcliy.
err By JaigS Sh6fswe3d. in abe
ca Of sd o. Nd0h-sfror totbe
cd n i plea of Hu(8ingtop copaty.
The cburt decided til it is heces.
sary quality of negotiable paper
that it should be simple. certa 10, un-
conditional. not subject to any con
tihgency.' 1T would lie : mere a.
fectation of learning TO cite the elc-
meltary treatises and the decided
cases which have established this
fprindple. 1t is very important to the
tcomaercial commupity that it should
be maintained 10 all its rigor.
applying it to the note sued upon
in this case, we are Of the opinion
that it violates this rule. If it had
been payable 1t sixty days, with 5
per cent, it would have been objec-
tionable as usurieus on its face. II
would not, however, on that account
have invalidated the note or destroy
ed its negotiabilisy. A negotiable
note may be made payable with in
~terest from its date, and if more
THAN lawful interest is stipulated for,
it does not 10 Pennsylvania, make
the contract void, but only the usury.
Hence such q note is sufficiently GER
tain. 1t is payable at maturity with
lawful interest. But in the paper in
question there enters, as o the
amount, an undoubted element OF
uncertainty. II is a mistake TO
suppose that il the note was unpaid
at maturity the Eve per cent. would
be payable to the holder by the par
tiles. 1t must go into the hands of
an attorney for collection. 1t is not a
sum necessarily payable The
phrase collection fee" necessarily
implies this. Not only 80, but this
amount of per centage cannot be ar
bitrariIy determined by the parties.
1t must be only what would be rea-
sonable compensation to an attorney
for collection. This 10 reason, and
the usage of the legal profession, de-
ponds upon the amount of the note.
Five per cent. would probably be con-
'sidered by q jury rs a reasonable
compensation upon the collection of
q note of three hundred and seventy
seven dollars. But il il were three
thousand dollars they would proba-
bly, think otherwise, aud certainly so
If IL were thirty thousand dollars.
Now, then, can this note be said to be
certain as to its amount, or that
amount unaffected by auv contin-
gency
Interests and costs Of protest, af-
ter non-payment at maturity. are
necessary legal incidents of the con
tract, and this insertion Of them in
the body Of the note would not af-
feet its negotiability. Neither does
a clause waving exemption, for hat
in no way touches the simplicity and
certainty of the paper. But a c,l-
lateral agreement as here, depending.
too, as it does, upon its reasonable
ness, to be determined by the ver-
diet Of a Jury, is entirely different,
1t may be well characterized, like an
agreement to confess a judgment:
was by Chief Justice Gibsop, as
luggage" which negotiable paper.
riding as it does, on the wings Of the
wind, is not a courier able to car
ry.
If this collateral agreement may be
introduced with impunity, what may
not be? Itis the first step ia the
wrong direction which costs.
These instruments may come to be
numbered up with all sorts of stipu-
l%ations, and all sorts Of difficulties,
contentious and litigation results.
1t is the best rule obsta princi-
pies. Judgment reversed.
The effect of the above opinion by
the supreme court will be to relieve
indorsers of notes on which there is
the printed stipulation that FIVE per
cent collection foe shall be allowed.
The supreme court holds that this
clause destroys the negotlability Of
the paper so far as the indorser is
concerned. The incorporation Of
the clause in mortgages and bonds
has been held to be legal, and in
view of this fact it has been suppo-
sed by bankers and others that ne
gotiable notes would not be impaired
by having it introduced into them.
Thousands of these notes have been
given the last few months, and the
decision of the supreme court (rerer-
sing the judgment OF the Hunting
don county court in a case raising
the question Of the negotiability Of
such paper) will, in numerous in
stances seriously affect the interests
of those who have loaned money on
these notes. 1t is said that several
millions of this kind Of paper are
held by bankers and other business
men.