The Columbian. [volume] (Bloomsburg, Pa.) 1866-1910, 1877-06-29
Negotiable Paper.

The Supreme Court, sitting at Harrisburg
has this week rendered an important decis-
ion in the case of Woods VS.. Nor,h, error to
the Common Pleas of Huntington county,
which ia of great interest to bankers and bu-
siness men, as it involves the validity of in
dorsementa of promissory notes containing
what is known rs the five per cent. collection
clause. The decision which was given by
Justice Sharswood, is as follows
1t is a necessary quality of negotiable pa
per that it should be simple, certain, uncon-
ditonal, not subject to any contingency 1t
would be a mere aflectation of learning to
cite the elementary treatises and the decided
cases which have established this principle.
1t is very important to the commercial COM
munity that il should be maintained in all
its rigor. Applying it to the note sued upon
in this case we are opinion that it violates
this rule. If it had been made payable at
sixty days, with per cent. it would have
been Objectionable as usurous on its face.
1t would not, however, on that account have
invalidated the note or destroyed its negoti-
ability. 4 negotiable note may be made pay
able, with interest from a State, and il more
than lawful interest is stipulated for, it does
not in Pennsylvania make the contract void,
| but only the usury. Hence such note is
sufficiently certain 1t is payable at matu-
rity, with lawful interest. But in the paper
| now in question there enters rs to the amount
an undoubted element of uncertainty. 1t is
a mistake to suppose that if the note was un-
paid at maturity the five per cent. would be
payable to the holder by the parties.
1t must 90 into the hands of an attorney for
collection. 1t is not a sum necessarily
payable. The phrase collection fee" neces-
sarily implies this. Not only so, but this
amount of percentage cannot be arbitrarily
determined by the parties 1t must be only
what would be reasonable compensation to
an attorney for collection. This, in reason
and the usage of the legal profession, de-
peDds upon the amount of the note Five
per cent. would probably be considered by
jury as a reasonable compensation upon
the collection of note of three hundred
and seventy-seven dollars. But if it were
three thousand dollars they would probably
think otherwise, and certainly so if it were
thirty thousand dollars. Now, then, can thi
note Re said to be certain as to its amour
or that amount unaffected by any contin
gency?
Interest and costs of protest, after non
payment at maturity, are necessary legal in
cidents of the contract, and the insertion o
them in the body of the note would not at
feet its negotiability.
Neither does clause waving exemption
for that in no touches the simplicity and Ger
tainty of the paper. But collateral agree
ment, as here, depending, too, as it does
= upon its reasonableness, to be determine
by the verdict of jury, is entirely different
1t may be well characterized, like an agree
ment to confess judgment was by Chic
Justice Gibson, as luggage" which negot
able paper, riding as it does on the wings {
the wind, is not courier able to carry.
this collateral agreement may be introduce
with impunity, wha, may not be2 1t is tn
first step in the wrong direction which cost
These instruments may come to be lum
bered up with all sorts of stipulations an
all sorts of difficulties contention and lit
cation result.
1t is the best rule ossta principles
Judgment reversed.