Kennedy v. Broderick

BAKER, Circuit Judge (after stating the facts as above). Under the general law, as well as under the Negotiable Instruments Act, the writing in question, if the small-type matter in the lower left corner be disregarded, constitutes a perfect negotiable promissory note. Does the inclusion within the same document of an agreement respecting a pledge of collateral securities, by the terms of which the pledgee may anticipate maturity, sell collaterals, and leave an uncertain amount unpaid, render the instrument nonnegotiable ? No, if this is a question of Missouri law. For her courts have clearly'and unmistakably arrived at the following position: If two instruments are executed at the same time, in the course of the same transaction, and covering the same subject-matter, they are to be read and construed together as one instrument. But this doctrine does not apply to a transaction in which two separate and distinct matters are involved. Each is to be considered and interpreted as a complete entity, whether they be written upon one paper or several. An unconditional [139] promise to pay a certain sum at a certain time is a matter apart from security by way of deed of trust or mortgage of land or pledge or mortgage of chattels. One is governed by the lav/ merchant, the other by property laws. The owner may rely, if he chooses, exclusively upon the promise to pay, according to its terms. Conditions for his benefit in the mortgage or pledge agreement may be availed of only in his capacity of mortgagee or pledgee; they are limited to the purposes of the mortgage or pledge; they cannot be read into the promise to pay, and so render a certain promise uncertain, convert a negotiable into a nonnegotiable instrument. Morgan v. Martien, 32 Mo. 438; Mason v. Barnard, 36 Mo. 384; Hurck v. Erskine, 45 Mo. 484; Brownlee v. Arnold, 60 Mo. 79; Whelan v. Reilly et al., 61 Mo. 565; Noell v. Gaines, 68 Mo. 649; Owings v. McKenzie, 133 Mo. 323, 33 S. W. 802, 40 L. R. A. 154; McMillan v. Grayston, 83 Mo. App. 425; Board of Trustees of Westminster College v. Peirsol et al., 161 Mo. 270, 61 S. W. 811; Curry v. La Fon, 155 Mo. App. 678, 135 S. W. 511. If the question is one of general law, the answer is the same. In Chicago Ry. Co. v. Merchants’ Bank, 136 U. S. 268, 10 Sup. Ct. 999, 34 L. Ed. 349, within one document were contained an unconditional promise to pay a certain sum at a certain time and a collateral agreement that the note, being one of a series given to the Northwestern Car Company for the purchase of cars, should become due and payable on default of payment of principal and interest of any note of the series, and that the title to the cars should remain in the payee for the equal and ratable security of all the notes. “The agreement that the title should remain in the payee until the notes were paid- — it being expressly stated that they were given for the price of the cars sold hy the payee to the maker and wore secured equally and ratably on the property — is a short form of chattel mortgage. The transaction is, in legal effect, what it would have been if the maker, who purchased the cars, had given a mortgage back to the payee, securing the notes on the property until they were all fuily paid. The agreement, by which the vendor retains the title and by which the notes are secured on the cars, is collateral to the notes and does not affect their negotiability.” But even if the two matters were to be read together, it is clear that the stipulations for additional collaterals and the sale of collaterals are pertinent only to the pledge part of the transaction, and that the only condition which could, in any event, be carried into the promise to pay part is the one by which maturity might be anticipated. That condition, however, could only affect the time provision of the note to the extent of causing the maker to promise to pay 90 days after date, or sooner on demand of the holder after the maker’s default in putting up additional securities. The applicable doctrine is correctly stated, we believe, in Hunter v. Clarke, 184 Ill. 158, 56 N. E. 297, 75 Am. St. Rep. 160: “There can be no difference, in principle, between the exercise of an option by the maker to pay before a certain day, or a provision that the note shall be due upon the happening of some event prior to the date fixed and an option of the holder to declare it due upon the occurrence of some event.” The judgment is affirmed.