Page:Harvard Law Review Volume 32.djvu/791

755 ACCELERATION PROVISIONS IN TIME PAPER 755 rapid circulation in the legitimate money market. Its speculative value, the need of inquiry into outside facts, and the risk of hidden defenses make business men fight shy of it and prevent it from being a substitute for money at all. It should be classed as an ordinary simple contract, and not as a circulating instrument. Notwithstanding these objections, American decisions have gone very far in upholding instruments with no certain time for pay- ment.^^ Our problem is different, for it concerns paper with a certain maturity and provisions for a contingent earlier payment. However, the judicial attitude toward acceleration clauses has been affected by the widespread disregard of the requisite of certainty of time in the decisions just mentioned, and the prevalence of the maxim that an instrument is good so long as the day of payment must ultimately arrive, a maxim which would logically vahdate all acceleration paper. On the other hand, the recognition of the time requisite in the Negotiable Instruments Law ^^ has brought a general stiffening of standards, which has reacted upon acceleration cases. Before examining the decisions upon the various forms of accel- eration provisions, including those in collateral and chattel notes, I shall present the principles which seem to me controlling. There are two broad classes of negotiable instruments without acceleration provisions, each of which has its own distinctive method of satisfying the formal requisite of certainty of time, (a) In time paper, "the time of payment of a bill or note must be obvious from the bare inspection of the instrument." (6) In demand or sight instruments, the time is not certain at the outset, but is fixed "by the performance of an act regularly incident to the collection of the paper." ^^ Thus, a demand note becomes payable by the maker's act of tender of money, or the holder's act of presentment for payment.^^ A sight bill is made certain by the " I Daniel, op. cit., § 43/. "§4. 2° 2 Ames, Cases on Bills and Notes, 831. The Negotiable Instruments Law presents the two methods in a httle different way. § i (3) says the instrument "must be payable on demand, or at a fixed or determinable future time." §4(1) says the time is "determinable" in sight bills. 21 In demand notes presentment for payment does determine maturity if payment is thereupon made. If, however, payment is not made, maturity is determined regard- less of demand. For purposes of suit or the Statute of Limitations, the note matures