50 S.E. 554 | S.C. | 1905
Lead Opinion
March 14, 1905. The opinion of the Court was delivered by These cases were heard together and involve the same question, to wit: Did his Honor, the Circuit Judge, err in ruling that the notes sued upon were non-negotiable? It will only be necessary to set out a copy of one of the notes, which is as follows:
"$84.00 Cope, S.C. March 2d 1901. On or before the first day of September, 1901, next, I promise to pay W. H. Hurt or order eighty-four dollars for value received with interest after maturity at eight per cent. per annum. In case this note, or any part of it, is collected through an attorney or by legal proceedings of any kind, I promise to pay all costs and expenses including ten per cent. of amount collected for attorney's fees. Negotiable and payable at Bank of Orangeburg, Orangeburg, S.C.H.S. Spires. (Two cents revenue stamp cancelled.)"
The note contemplated expenses of collection other than attorney's fees of ten per cent. on the amount collected. The expenses are not specified and are, therefore, uncertain.
Conceding that the note had reference to expenses incurredafter the maturity thereof, it was, nevertheless, non-negotiable. In the case of Bank v. Strother,
The appellant relies upon the recent case of White v.Harris,
It is the judgment of this Court, that the judgment of the Circuit Court be affirmed.
MR. CHIEF JUSTICE POPE. I concur in the result. The insertion in the notes of the words: "I promise to pay all costs and expenses," takes these cases out of the rule laid down in White v. Harris,
Dissenting Opinion
I do not concur in the view expressed in the opinion of Mr. Justice Gary, that the notes in question were non-negotiable by reason of the stipulation to pay "all costs and expenses, including ten per cent. of the amount so collected for attorney's fees," in case of collection through an attorney or by legal proceedings.
There is undoubtedly great conflict among the authorities on this subject, as may be seen by reference to cases cited in 4 Ency. Law, 2d ed., 98, 99, 100. I prefer to side with those cases which hold the view that such a stipulation does not destroy the negotiability of the note. The reasoning upon which this view is based is thus clearly stated by Mr. Daniel in his work on Negotiable Instruments, 3d ed., sec. 62: "Such instruments should, we think, be upheld as negotiable. They are not like contracts to pay money and do *110 some other thing. They are simply for the payment of a certain sum of money at a certain time, and the additional stipulations as to attorney's fees can never go into effect, if the terms of the bill or note are complied with. They are, therefore, incidental and ancillary to the main engagement, intended to assure its performance, or to compensate for trouble and expense entailed by its breach. At maturity a negotiable paper ceases to be negotiable in the full commercial sense of the term as heretofore explained, though it still passes from hand to hand by negotiable forms of transfer; and it seems paradoxical to hold that instruments evidently framed as bills and notes are not negotiable during the currency, because when they cease to be current they contain a certain stipulation to defray all expenses of collection."
The case of Bank v. Strother,
"1. For the payment of `all counsel fees and expenses in collecting this note if it is sued or placed in the hands of counsel for collection.'
"2. A provision whereby the payee is invested with `full power of declaring this note due, and take possession of said engine and saw mill at any time they may deem this note insecure, even before the maturity of the same.'
"3. The promise to pay the amount named `with exchange on New York.'"
With reference to the third stipulation, the Court held that it certainly rendered the note non-negotiable, under the authority of Reed v. McNelty, 2 Rich., 445. The promise to pay the sum definite, with an undefined sum as exchange, affected the certainty of the amount due at maturity. This alone was sufficient to sustain the decision in Bank v.Strother. With reference to the second stipulation, the Court held that it rendered the time of payment altogether uncertain, and dependent only upon the option of the payee, *111 and so deprived the paper of its negotiability. The point decided in Bank v. Strother was that the instrument in question was not negotiable, and this may well be rested upon the second and third stipulations above.
With respect to what was said by the Court in that case, with reference to the first stipulation, in my opinion, the case is not fairly reconcilable with the reasoning and conclusion of the Court in White v. Harris,
For these reasons, I think the judgment of the Circuit Court should be reversed.
Dissenting Opinion
I think the case of Bank v.Strother,