Page:Harvard Law Review Volume 32.djvu/801

765 ACCELERATION PROVISIONS IN TIME PAPER 765 construction is correct the effect on all holders with notice of the default is clear. The Statute of Limitations begins to run at de- fault;^* the holder must give notice to secondary parties or discharge them as to the whole amount due,®^ and the paper is thenceforth subject to equities.^^ The holder must bring one action for the whole amount due; and if he sues for one portion only, judgment will bar further suits for the other portions.®'^ On the other hand, if the instrument is in the hands of a pur- chaser ignorant of the default, the fixed date is maturity for all purposes, and the acceleration is disregarded. While no cases precisely in point have been discovered, it is clear that this result must follow if the instrument is to circulate freely. Furthermore, we have the analogy, already mentioned, of Dunn v. O^Keefe.^^ A S. W. 966 (1899); Buss V. Kemp, 170 Pac. 54 (N. M. 1918); Banzer v. Richter, 68 Misc. 192, 123 N. Y. Supp. 678 (1910); Harrison Machine Works v. Reigor, 64 Texas, 89 (1885); Kelly V. Kershaw, 5 Utah, 295, 299, 14 Pac. 804 (1887); Hodge v. Wallace, 129 Wis. 84, 108 N. W. 212, N. I. L. (1906). The same absolute effect was given to a mortgage securing serial notes and provid- ing that default of one note should mature all, in First National Bank v. Peck, 8 Kan. 660 (1871); Snyder v. Miller, 71 Kan. 410, 80 Pac. 970 (1905); Green v. Frick, 25 S. D. 342, 126 N. W. 579 (1910); San Antonio, etc. Association v. Stewart, 94 Texas, 441, 61 S. W. 386 (1901); and to other default clauses in a mortgage in Moore v. Sargent, 112 Ind. 484, 14 N. E. 466 (1887); Lewis v. Lewis, 58 Kan. 563, 564, 50 Pac. 454 (1897), semble; Spesard v. Spesard, 75 Kan. 87, 88 Pac. 576 (1907); and other Kansas decisions, Manitoba Mortgage, etc. Co. v. Daly, 10 Man. 425 (1895); McFadden v. Brandon, 8 Ont. L. Rep. 610 (C. A., 1904). And see Pierce v. Shaw, 51 Wis. 316, 8 N. W. 209 (1881), that if all the notes are accelerated, the first note does not have priority, but shares pro rata. If the note gives the holder an option, but the mortgage is absolute, the note wiU prevail. Kennedy v. Gibson, 68 Kan. 612, 75 Pac. 1044 (1904). And if the note is absolute, but the mortgage gives an option, the mortgage will prevail. Moline Plow Co. v. Webb, 141 U. S. 616 (1891). Absolute effect was given to a simple contract for repayment of a loan. Hemp v. Garland, 4 Q. B. Rep. 519 (1843); Reeves v. Butcher, [1891] 2 Q. B. 509 (C. A.). " Cases in note 63, except Hodge v. Wallace, Kelly v. Kershaw, and Pierce v. Shaw. 12 L. R. A. (n. s.), 1190, note; 51 L. R. A. (n. s.), 151, note. " No authorities have been found, but the principle is clear. " First National Bank v. Peck, 8 Kan. 660 (1871); Lewis v. Lewis, 58 Kan. 563, 564, SO Pac. 454 (1897), semble; Hodge v. Wallace, 129 Wis. 84, 108 N. W. 212 (1906); Merchants' Bank v. Brisch, 154 Mo. App. 631, 136 S. W. 28 (191 1). But in Re Goye & Co. [1900] 2 Ch. 149, it was held that where a debenture accelerated by winding-up of the corporation was negotiated thereafter, the purchaser was not subject to equities. The decision seems to rest on the express language of the instnmient. Cf. Hynes v. Illinois Trust, 226 111. 95, 80 N. E. 753 (1907). " Banzer v. Richter, 68 Misc. 192, 123 N. Y. Supp. 678 (1910); Kelly v. Kershaw, S Utah, 29s, 14 Pac. 804 (1887).
 * 5 M. & Sel. 282 (1816); see page, 761, supra.