Carmody v. Crane, 110 Mich. 508, 68 N. W. 268; Brooke v. Struthers, 110 Mich. 562, 68 N. W. 272, 35 L. R. A. 536; Garnett v. Meyers, 65 Neb. 280, 91 N. W. 400, 94 N. W. 803; Consterdine v. Moore, 65 Neb. 291, 101 Am. St. Rep. 620, 91 N. W. 399, 96 N. W. 1021; Allen v. Dunn, 71 Neb. 83, 99 N. W. 680; Howell v. Todd, Fed. Cas. No. 6783; Farquhar v. Fidelity Ins. etc. Co., Fed. Cas. 4676. Said the Nebraska court in the above case of Garnett v. Meyers, 65 Neb. 280, 91 N. W. 400, 94 N. W. 803: "If the terms and conditions of the mortgage are limited to the proper province of the mortgagethat is, to provide security for the indebtedness-its provisions relating solely to the security will not affect the negotiability of the note. If the holder of the note is compelled to pay the taxes or insurance on the mortgaged property to protect the security, and is afterward allowed to recover the amount so paid in addition to the principal indebtedness, this does not affect the amount of the indebtedness itself." And the Wisconsin court in the above case of Thorp v. Mindeman, 123 Wis. 149, 107 Am. St. Rep. 1003, 101 N. W. 417, 68 L. R. A. 146, makes this observation: "Without stopping to consider whether these decisions (referring to the Kansas, Michigan and Nebraska cases above) should be approved or not, it is enough to say that they are not at all in conflict with the present decision. The agreement to pay taxes was to pay taxes which might be levied on the mortgagee, not the taxes on the mortgaged property; hence the agreement had no connection with the preservation of the security, and was construed by the courts as an agreement to pay an indefinite sum as a part of the note." A provision in a mortgage that the mortgagor shall pay the taxes is not destructive of negotiability if the obligation to pay the taxes is imposed by law independently of the contract stipulation: Brooke v. Struthers, 110 Mich. 562, 68 N. W. 272, 35 L. R. A. 536; Wilson v. Campbell, 119 Mich. 580, 68 N. W. 278, 35 L. R. A. 544; Bradbury v. Kinney, 63 Neb. 754, 89 N. W. 257.

In Illinois the amount to be paid on a note is not rendered uncertain by stipulations in the mortgage securing it, for costs, taxes, assessments, insurance, and attorneys' fees in case of foreclosure, and the note is negotiable notwithstanding such provisions: Hunter v. Clarke, 184 Ill. 158, 75 Am. St. Rep. 160, 56 N. E. 297. But in Montana, where a mortgage provides that the mortgagor shall pay all taxes and insurance on the property, and that on default the mortgagee may make such payments they to bear interest at the rate of twelve per cent and be secured by the mortgage, that the mortgagor shall keep the property in repair, that in case of default in the performance of any covenant therein the principal and interest shall become due, and that in case of foreclosure an attorney's fee for a specified sum may be allowed, the accompanying note is not negotiable: Cornish v. Woolverton, 32 Mont. 456, 108 Am. St. Rep. 598, 81 Pac. 4.

e. Provision for Attorney Fees.

1. When Impairs Negotiability.-Not a few courts have taken the position that a clause in a promissory note providing for the payment of attorney's fees in case suit is brought to enforce the collection of the note, renders the instrument non-negotiable, on the ground that such a provision creates uncertainty, especially in the amount payable: First Nat. Bank v. Babcock, 94 Cal. 96, 28 Am. St. Rep. 94, 29 Pac. 415; Kendall v. Parker, 103 Cal. 319, 42 Am. St. Rep. 117, 37 Pac. 401; Findlay v. Potts, 131 Cal. 385, 63 Pac. 694; Garretson v. Purdy, 3 Dak. 178, 14 N. W. 100; Cayuga County Nat. Bank v. Purdy, 56 Mich. 6, 22 N. W. 93; Altman v. Rittershofer, 68 Mich. 287, 13 Am. St. Rep. 341, 36 N. W. 74; Altman v. Fowler, 70 Mich. 57, 37 N. W. 708; McCoy v. Green, 83 Mo. 626; First Nat. Bank v. Gay, 63 Mo. 33, 21 Am. Rep. 430; Clark v. Barnes, 58 Mo. App. 667; Johnston v. Speer, 92 Pa. 227, 37 Am. Rep. 675. Some of the courts that have come to this conclusion have been influenced by an express statutory provision that an instrument is not negotiable which contains "any condition not certain of fulfillment": Adams v. Seaman, 82 Cal. 636, 23 Pac. 53, 7 L. R. A. 224; Stadler v. First Nat. Bank, 22 Mont. 190, 74 Am. St. Rep. 582, 56 Pac. 111; Cotton v. John Deere Plow Co., 14 Okl. 605, 78 Pac. 321.

In denying the negotiability of notes containing this provision for attorney's fees the court in Roads v. Webb, 91 Me. 406, 64 Am. St. Rep. 246, 40 Atl. 128, used this language: "It is said that if the note should be paid at maturity there would be no attorneys' fees. This is true. But a note which, by its terms, is negotiable under the rules of law, does not lose that characteristic until merged in a judgment. The only infirmity attending its negotiation after maturity is that the indorser takes it subject to the same defense that the maker could have made against the original payee. A note cannot be negotiable before maturity and not negotiable after that, by reason of the terms of the note itself. After these notes were dishonored and had been placed in an attorney's hands, his fees commenced to run. How much they would amount to depended upon the service then rendered and to be rendered. But, until merged in judgment, they were still negotiable, if negotiable at any time after their creation. Hence, arose an uncertainty in the amount due. That uncertainty attached to the notes in their inception, although attorney's fees would not accrue until after dishonor. The notes provided for the payment of such uncertain fees, in case they should acerue, and thus rendered the amount the makers were liable to pay in one event uncertain. This infirmity destroyed the negotiable quality of the notes."

Another leading and oft-cited case is Woods v. North, 84 Pa. 407, 24 Am. Rep. 201, wherein it is held that a note is not negotiable which contains a promise to pay a certain sum of money" and five per cent collection fee if not paid when due." In the course of its opinion the court remarked: "In the paper now in question there

enters as to the amount an undoubted element of uncertainty. It is a mistake to suppose that if the note was unpaid at maturity, the five per cent would be payable to the holder by the parties. It must go into the hands of an attorney for collection. It is not a sum necessarily payable. The phrase 'collection fee' necessarily implies this. Not only so, but this amount of percentage cannot be arbitrarily determined by the parties. It must be only what would be a reasonable compensation to an attorney for collection. . . . . Interest and costs of protest after nonpayment at maturity are necessary legal incidents of the contract, and the insertion of them in the body of the note would not affect its negotiability. Neither does a clause waiving exemption, for that in no way touches the simplicity and certainty of the paper. But a collateral agreement as here, depending too as it does upon its reasonableness, to be determined by the verdict of a jury, is entirely different. It may be well characterized, like an agreement to confess a judgment was by Chief Justice Gibson, as luggage,' which negotiable paper, riding as it does on the wings of the wind, is not a courier able to carry. If this collateral agreement may be introduced with impunity, what may not be? It is the first step in the wrong direction which costs. These instruments may come to be lumbered up with all sorts of stipulations, and all sorts of difficulties, contentions and litigation result."

A provision for a "reasonable" attorney's fee in case suit is brought for collection has been held to destroy its negotiability: Strawberry Point Bank v. Lee, 117 Mich. 122, 75 N. W. 444; Jones v. Radatz, 27 Minn. 240, 6 N. W. 800; Samstag v. Conley, 64 Mo. 476; First Nat. Bank v. Laughlin, 4 N. D. 391, 61 N. W. 473; Lippincott v. Rich, 22 Utah, 196, 61 Pac. 526; Peterson v. Stoughton State Bank, 78 Wis. 113, 47 N. W. 368. So has a provision for a fee of ten dollars: Clowers v. Snowben (Okl.), 96 Pac. 596; and a provision for a fee of ten dollars and ten per cent of the amount collected: Cotton v. John Deere Plow Co., 14 Okl. 605, 78 Pac. 321; and a provision to pay as an attorney's fee and ten per cent for collection: First Nat. Bank v. Gay, 71 Mo. 627; Creasy v. Gray, 88 Mo. App. 454; First Nat. Bank v. Larsen, 60 Wis. 206, 19 N. W. 67, 57 Am. Rep. 365. A note payable with collection charges has been declared non-negotiable: Smith v. First Nat. Bank, 95 Minn. 496, 104 N. W. 369; Buck v. Harris, 125 Mo. App. 365, 102 S. W. 640; so has a note payable "with all expenses, if suit be instituted for collection": Smith Sons Gin etc. Co. v. Badham (S. C.), 61 S. E. 1031; and so has a note with a provision to pay all costs and charges for collecting it: Maryland Fertilizing etc. Co. v. Newman, 60 Md. 584, 45 Am. Rep. 750. A provision in a note for costs and expenses of collection including ten per cent of the amount collected as attorney's fees has been held non-negotiable: Green v. Spires, 71 S. C. 107, 50 S. E. 554; and so has a note payable with counsel fees and expenses of collection if sued on or placed in the hands of an attorney for collection: First Nat. Bank v. Bynum, 84 N. C. 24, 37

Am. Rep. 604; Morgan v. Edwards, 53 Wis. 599, 40 Am. Rep. 781, 11 N. W. 21. A provision for costs in a certain sum with attorney fees and "other costs, in case the holder is obliged to enforce payment at law," was held to destroy negotiability in Johnson v. Schar, 9 S. D. 536, 70 N. W. 838; Baird v. Vines, 18 S. D. 52, 99 N. W. 89; and a note with power of attorney to confess judgment thereon for such sum as might be unpaid, together with costs and attorney's fees, was held non-negotiable in Law v. Crawford, 67 Mo. App. 150.

A provision for attorney fees in a mortgage in case of foreclosure was held to destroy the negotiability of the note to secure which the mortgage was given in Meyer v. Weber, 133 Cal. 681, 65 Pac. 1110, where the note and mortgage were a part of the same transaction and therefore were to be construed together. The weight of authority, however, is to the effect that a stipulation in a note for attorney's fees does not affect its negotiability, and in those jurisdictions where this rule prevails, it would seem clear that a provision in a mortgage for attorney's fees in the event of foreclosure does not destroy the negotiability of the secured note: Hamilton v. Fowler, 99 Fed. 18, 40 C. C. A. 47.

2. When does not Impair Negotiability.—A majority of the courts take the view that a provision in a bill of exchange or in a promissory note for the payment of an attorney's fee in the event of suit being brought to enforce collection does not impair the negotiability of the instrument: First Nat. Bank v. Slaughter, 98 Ala. 602, 39 Am. St. Rep. 88, 14 South. 545; Trader v. Chidester, 41 Ark. 242, 48 Am. Rep. 38; Cowing v. Cloud, 16 Colo. App. 326, 65 Pac. 417; Stapleton v. Louisville Banking Co., 95 Ga. 802, 23 S. E. 81; Nickerson v. Sheldon, 33 Ill. 372, 85 Am. Dec. 280; Dorsey v. Wolff, 142 Ill. 589, 34 Am. St. Rep. 99, 32 N. E. 495, 18 L. R. A. 428; Lauferty v. Johnson 17 Ill. App. 549; Gehlbach v. Carlinville Nat. Bank, 83 Ill. App. 129; Stoneman v. Pyle, 35 Ind. 103, 9 Am. Rep. 637; Proctor v. Baldwin, 82 Ind. 370; Sperry v. Horr, 32 Iowa, 184; Shenandoah Nat. Bank v. Marsh, 89 Iowa, 273, 48 Am. St. Rep. 381, 56 N. W. 458; Seaton v. Scoville, 18 Kan. 433, 21 Am. Rep. 212, 26 Am. Rep. 779; Gilmore v. Hirst, 56 Kan. 626, 44 Pac. 603; Gaar v. Louisville Banking Co., 74 Ky. (11 Bush) 180, 21 Am. Rep. 209; Deitrich v. Bayhi, 23 La. Ann. 767; Clifton v. Bank of Aberdeen, 75 Miss. 929, 23 South. 394; Commerce Bank v. Fuqua, 11 Mont. 285, 28 Am. St. Rep. 461, 28 Pac. 291, 14 L. R. A. 588; Roberts v. Snow, 27 Neb. 425, 43 N. W. 241; Stark v. Olsen, 44 Neb. 646, 63 N. W. 37; Benn v. Kutzschan, 24 Or. 28, 32 Pac. 763; Baird v. Vines, 18 S. D. 52, 99 N. W. 89; Hamilton Gin etc. Co. v. Sinker, Davis & Co., 74 Tex. 51, 11 S. W. 1056; Wright v. Morgan (Tex. Civ. App.), -37 S. W. 627; Elmore v. Rugely (Tex. Civ. App.), 107 S. W. 151; Howenstein v. Barnes, 5 Dill. 482, Fed. Cas. No. 6786; Wilson Sewing-Machine Co. v. Moreno, 6 Saw. 35, 7 Fed. 806; Adams v. Addington, 4 Woods, 389, 16 Fed. 89; Farmers' Nat. Bank v. Sutton Mfg. Co., 52 Am. St. Rep., Vol. 125-14

Fed. 191, 3 C. C. A. 1, 17 L. R. A. 595. Likewise a provision for the payment of costs of collection in case of default in payment has been held not to destroy negotiability: Montgomery v. Crossthwait, 90 Ala. 553, 24 Am. St. Rep. 832, 8 South. 498, 12 L. R. A. 180; Nicely v. Winnebago Nat. Bank, 18 Ind. App. 30, 47 N. E. 476; Schlesinger v. Arlin, 31 Fed. 648. A stipulation to pay an attorney fee of ten per cent is held not to impair the negotiability of a note in White v. Harris, 69 S. C. 65, 104 Am. St. Rep. 791, 48 S. E. 41; Salisbury v. Stewart, 15 Utah, 308, 62 Am. St. Rep. 934, 49 Pac. 777.

Various reasons are advanced to sustain the proposition that a provision for attorney's fees is not fatal to negotiability. First, such a stipulation is said not to render the amount payable uncertain, for the law-merchant aims not at mathematical certainty but at commercial certainty; second, the agreement is said to be a collateral stipulation as distinct from the principal agreement as though written on a separate paper; third, the stipulation does not become operative until after maturity, and after maturity all commercial paper loses in any event its peculiar character of negotiability. Probably the soundest of these reasons is the first, that is to say, that a stipulation for attorney's fees does not, within the meaning of the law-merchant, render the amount payable uncertain. To quote from Cudahy Packing Co. v. State Nat. Bank, 134 Fed. 538, 67 C. C. A. 662: "The decisions which sustain the negotiability of notes containing a provision for the payment of attorney's fees have, in the main, been justified upon the ground that prior to the maturity of the note, and while it was current in the business world, the provision was inoperative; that it did not take effect until after the dishonor of the note, so that in any case the transferee would take subject to all the defenses existing between the original parties." This reasoning cannot be applied to provisions for the payment of exchange, and upon that ground notes containing such provisions have by many courts been held to be non-negotiable: Hughitt v. Johnson, 28 Fed. 865. We believe that the whole subject might well be rested on safer and more fundamental grounds. Judge Mitchell, in writing the opinion of the supreme court of Minnesota in the case of Hastings v. Thompson, 54 Minn. 184, 40 Am. St. Rep. 315, 55 N. W. 968, 21 L. R. A. 178, indicated the correct doctrine when he said: "The reason and purpose of the rule that the sum to be paid must be certain is that the parties to the instrument may know the amount necessary to discharge it without investigating facts not within the general knowledge of everyone, and which may be subject to more or less uncertainty, or more or less under the influence or control of one or other of the parties to the instrument." The rule requiring certainty in commercial paper was a rule of commerce before it was a rule of law. It requires commercial, not mathematical, certainty. An uncertainty which does not impair the functions of negotiable instruments in the judgment of business men ought not to be regarded by the courts. The fine phrase of Chief