Page:Harvard Law Review Volume 32.djvu/813

777 ACCELERATION PROVISIONS IN TIME PAPER 777 because it is dependent upon the fact of whether the maker does sell or remove the chattel. The cases also show traces of a hostility to all chattel notes, with or without the acceleration provision."^ After considerable questioning, I have come to the conclusion that these notes are negotiable. The reasons for this view are like those presented in the discussion of the next topic on collateral, that the maker's promises and the breach are really incidental to the collection of the instrument because of the importance of the security. A few cases take the same position."^ A somewhat similar question arises with notes secured by a real- estate mortgage, which provides that if the maker shall do any act by which the value of the mortgaged property shall be impaired, the whole amount shall become due and payable. This would in- clude suffering or committing waste, failing to keep up insurance, and so forth. Such a note has been held invalid in Washington,"^ but is regarded as valid in other decisions.^^" Acceleration by Depreciation or Sale of Collateral This brings us at last to the validity of the provisions in the promissory note described on the first page of this article.^^^ The problem is closely related to that of chattel notes. The provisions are frequently contained in the notes, secured by collateral, which banks require borrowers to sign. Some of these notes allow the holder to sell the collateral at once if it depreciates and sue forth- with for the deficiency, without giving the maker an opportunity to furnish more margin.^^ Others agree to deliver more collateral tional Bank v. Carter, 144 Iowa, 715, 123 N. W. 237 (1909, N. I. L.); but see State Bank of Halstad v. Bilstad, 136 N. W. 204 (Iowa, 191 2, N. I. L.); First National Bank V. Carson, 60 Mich. 432, 27 N. W. 589 (1886), probably overruled by Schmidt v. Pegg, 172 Mich. 159, 137 N. W. 524 (1912, N. I. L.); Third National Bank 11. Armstrong, 25 Minn. 530 (1879), semble; Reynolds v. Vint, 73 Ore. 528, 144 Pac. 526 (1914, N. I. L.); Carroll, etc. Bank v. Strother, 28 S. C. 504, 6 S. E. 313 (i887);Kimballi'. Mellon, 80 Wis. 133, 48 N. W. iioo (1891), resting chiefly on other grounds. See 35 L. R. A. (n. s.), 392, note; L. R. A. 1915 B, 473, note. 1" See note 3, supra. "* Schmidt v. Pegg, 172 Mich. 159, 137 N. W. 524 (1912, N. I. L.), probably over- ruling First National Bank v. Carson, 60 Mich. 432 (1886); Heard v. Dubuque, 8 Neb. 10 (1878); Joergensen v. Joergenson, 28 Wash. 477, 68 Pac. 913 (1902). "9 Bright V. Offield, 81 Wash. 442, 143 Pac. 159 (1914, N. I. L.). ^° See note 151, infra. i^i Page 747, supra. ^ See Mumford v. Tolman; Benny v. Dunn; Continental National Bank v. McGeoch; all infra, notes 126 to 128.