Bank of Whitehouse v. White

• Decision Date: 27 January 1917
• Citation: 191 S.W. 332
• Parties: BANK OF WHITEHOUSE v. WHITE.
• Court: Tennessee Supreme Court

Page 332

191 S.W. 332

BANK OF WHITEHOUSE v. WHITE.

Supreme Court of Tennessee.

January 27, 1917.

Appeal from Chancery Court, Sumner County; J. W. Stout, Chancellor.

Suit by the Bank of Whitehouse against M. H. White. Judgment for defendant, and plaintiff appeals. Affirmed.

A. E. & J. E. Garner, True & Dorsey, and S. A. Van Ness, all of Springfield, for appellant. J. W. Murrey, of Gallatin, and Wm. A. Guild and F. M. Bass, both of Nashville, for appellee.

WILLIAMS, J.

Is the negotiability of a note destroyed by a provision on the part of the obligors that:

"We authorize the holder thereof to extend the payment of the same, or any part thereof, without impairing our joint and several liabilities, and the sureties agree to waive notice of any extension of time."

The contention in behalf of the appellant is based upon section 1, subsec. 3, of the Negotiable Instruments Act, 1899, c. 94:

"An instrument, to be negotiable, must conform to the following requirements:

"* * * (3) Must be payable on demand, or at a fixed or determinable future time."

We construe the clause in the note, quoted above, to relate and to give assent to extensions that may be granted at or after maturity, the date of which is set forth with certainty in the note; or to an extension which, if made prior to maturity, has operative effect as from the time when the note falls due according to tenor; and we are of opinion that when so construed the clause should not render the note nonnegotiable, whether we view the question from the standpoint of principle, precedent, or policy.

Principle: As already observed, the note as executed is stipulated to mature on a date fixed and certain. The provision for extension does not put it in the power of the holder to extend the note without the concurrence of the maker, and the latter may not force an extension on the holder. When they concur, a new date of maturity is fixed, and one no less certain than the original date. The sureties merely assent in advance thereto and bind themselves to waive the right of defense that might otherwise accrue; or to be bound by the supplemental contract which fixes the later maturity date. There is no agreement embodied in the note operating to bind the holder to extend. There is incorporated no promise to do anything that would, of its force, affect the unconditional promise to pay on the date named in instrument. There is nothing in the note that looks towards an indefinite extension of time of payment.

Precedent: Cases that pass on this question may be found...