Page:Harvard Law Review Volume 32.djvu/823

787 ACCELERATION PROVISIONS IN TIME PAPER 787 due on default. The purchaser of a collateral note, so long as he is ignorant of any prior acceleration, can determine the price upon the basis of a fixed maturity, for he cannot be deprived of his in- vestment until then except by his own consent. The fitness of collateral notes with acceleration provisions to find a ready market is obvious. Some courts have objected to their length, having in mind the well-known phrase of Chief Justice Gibson,^^^ "A negotiable bill or note is a courier without luggage." Judge Thayer remarked in 1895:^®^ "Under existing decisions permitting negotiable notes to contain a stipulation authorizing the sale at maturity of collateral securities, and, in some states, authorizing the insertion of an agreement to pay ex- change and attorney's fees, as well as a warrant to confess judgment, such instruments have already been biudened with all of the luggage which they can conveniently carry. ... It is easy to foresee that, if parties are permitted to burden negotiable notes with all sorts of col- lateral engagements, they will frequently be used for the purpose of entrapping the inexperienced and unwary into agreements which they had no intention of making, against which the law will afford them no redress." Judge Shepard^^ admits that "the simple, short documents of early custom have grown into elaborate documents full of collateral undertakings of every nature that the development of modern business and systems of credits could suggest" and that "many of these additions have clearly demonstrated their merits as beneficial aids to credit and commerce." Nevertheless, "there must, at last, be some Hmit," and he puts these acceleration provisions beyond the pale. Such reasoning is obviously unsatisfactory. It would certainly be unfortunate if a promissory note contained as many clauses in fine print as an insurance policy, but it would seem that acceleration provisions are so advantageous to circula- tion that they should be retained, subject to judicial control over any clauses which operate as a forfeiture of the security.^^ The oft-repeated epigram of Gibson has indeed "lost much of its apt- "1 Overton v. Tyler, 3 Pa. St. 346, 347 (1846). i«2 Lincoln National Bank v. Perry, 66 Fed. 887, 894 (C. C. A., 8th, 1895). 1^ Commercial National Bank v. Consumers' Brewing Co., 16 App. D, C. 186, 201 f. (1900). 1" See "Drastic Pledge Agreements," Murray Seasongood, 29 Harv. L. Rev. 277.