Page:Harvard Law Review Volume 32.djvu/789

753 ACCELERATION PROVISIONS IN TIME PAPER 753 ment is very uncertain.^^ On the other hand, if it is payable when he dies, it is unconditional and sure to be payable eventually, but no one can say when. A condition is a fatal objection for purposes of free circulation on the money market. The prospective pur- chaser cannot tell from inspection of the paper whether it will ever be exchanged for money, but must inquire into outside facts, often- times in the future, to learn if the condition is performed. There is not time in the rapid dealings of the market to ascertain more than the genuineness of the signatures, and the solvency and legal capacity of the signers. Consequently, it has always been settled that a conditional order or promise is not negotiable. Unfortunately many judges have jumped to the opposite propo- sition, that any unconditional promise or order is negotiable." If the day of payment is sure to arrive some time, the objection just considered does not arise, and therefore they conclude that it is immaterial when that day is to arrive. The statutes perpetuate the confusion.^^ The law tends to overlook the fact that an un- conditional instrument with an uncertain time for payment may be open to other and very serious objections. I. Its value is rendered uncertain. The time element in value is well understood. The distance to maturity determines the dis- count upon a non-interest-bearing obligation. If it bears interest above the market rate, a long-time security will command a pre- mium diminishing as maturity approaches; vice versa, if the interest is low. So close is the relation of time to value, that the price of a gilt-edged bond may be accurately ascertained from mathematical tables, given the maturity, return, and current interest-rate. On the other hand, if the maturity of an instrument is uncertain, the premium or discount becomes purely speculative. One hesitates to offer a premium for even a ten per cent note due at the maker's death, for it may be paid off next week at par. Nobody can tell what it will sell for a year hence. Life-tables cannot determine the 1' Such instruments are always held bad. i Ames, Cases on Bills and Notes, 30, and note. " Colehan v. Cooke, Willes, 393 (1743), note payable ten days after death of maker's father, is the leading case. " Negotiable Instruments Law, § 4 (3): "An instrument is payable at a deter- minable future time, within the meaning of this act, which is expressed to be payable, . . . on or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time of happening be uncertain." Bills of Exchange Act, § 1 1 (2) is practically the same.