Page:Harvard Law Review Volume 32.djvu/809

773 ACCELERATION PROVISIONS IN TIME PAPER 773 • states, execution can be levied at once.^°° In any case the note is changed before maturity into a non-negotiable judgment.^"^ Is this rightly held to make the note itself non-negotiable? The deci- sions to that effect have been vigorously attacked."^ The fact that an obHgation may become non-negotiable does not necessarily prevent negotiability at the outset. A restrictive in- dorsement, Hke "Pay A only," may prohibit the further negotiation of a negotiable note.^"^ Acceleration by conversion into stock be- fore maturity is analogous to conversion into a judgment, and is always held unobjectionable, as we have seen.^°^ There are two distinctions, however, which will perhaps account for the failure to apply the analogy. When a note is exchanged for stock it is sur- rendered to the obligor and safely out of circulation, in the hands of the man who is most interested in cancehng it. If judgment is entered on a note before maturity, the note will perhaps have to be filed with the clerk of court (this depends upon local rules), but it is not in the custody of the obligor. Access to records is easy, and the note may get out and into the hands of a bond fide purchaser without notice, so that the obligor would have to pay twice. How- ever, this objection applies to notes payable on or before a fixed date at the option of the holder in whole or in part, which are held nego- tiable,^°^ although a maker who had paid a large part to the payee might have to pay over again in full to an innocent indorsee. A further peculiarity of these judgment notes is that they oust the courts of jurisdiction, and, therefore, like arbitration agreements are regardQd jealously and tied down within narrow limits. Acceleration if the Holder Deems himself Insecure In view of the Hberal attitude taken by the courts towards the acceleration provisions already considered, especially those depend- ent upon an outside fact, a note, payable at a fixed date or sooner "on demand at the option of the holder if he deems himself insecure " 100 First National Bank of Elgin, Illinois v. Russell, supra. i"! See "Are Judgments Quasi Negotiable?" Roscoe Pound, 43 Cent. L. J. 440 {1896). 1"^ In the pamphlet. Some Observations on the Negotiable Instruments Act, William Trickett, Carlisle, Pa., 1916. »<» N. I. L. § 36. "** N. I. L. § 5 (4); and supra, pages 762-63. i<* See supra, notes 46, 47, and infra, note 108.