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127 Mass. 293

Costelo v. Crowell

Massachusetts Supreme Judicial Court

Decided August 19, 1879

Massachusetts Supreme Judicial Court · decided 1879-08-19

Contract on a promissory note for $3000, dated July 31, 1868, signed by Thomas Corey, the defendant’s intestate, payable in five years after date to the order of John F. Costelo, and by him indorsed in blank. On the margin of the face of the note were these words: “ Given as collateral security with agreement.” Writ dated August 10, 1877.

Key passage — most relied on by later courts

““The words written upon the face of the note, ‘given as collateral security with agreement,’ being incorporated in and made part of the contract, indicate with clearness that there may be a contingency, to wit: the performance of the undertaking to which this is collateral, in which it would not be payable; and so it lacks that element of negotiability which requires that at all events a sum certain shall be payable at a certain time.””

quoted by 2 later decisions, including First National Bank v. Badham, Ivory v. Lamoreaux

Relies on Jones v. Fales · President of Springfield Bank v. Merrick · Stults v. Silva

Good law ✅— No negative treatment on recordhow we know

Decided 1879-08-19

How this case has been cited

Cited by 33 later decisions — most recently January 1968 · most notably National Bank of Newbury v. Wentworth (1914), Glidden v. Henry (1885)

1 federal appellate · 1 district · 31 state decisions — followed in 12 states

701879188018901900191019201930194019501960decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

View the full empirical analysis of this case →

Lord, J.

¶1Whether, by the general law merchant, the note in suit would be deemed a negotiable note is a question upon which the authorities are by no means uniform. See Brill v. Crick, 1 M. & W. 232; Jury v. Barker, E. B. & E. 459; Williams v. Waring, 10 B. & C. 2; Haussoullier v. Hartsinck, 7 T. R. 733; Wise v. Charlton, 4 A. & E. 786; Fancourt v. Thorne, 9 Q. B. 312; *294Treat v. Cooper, 22 Maine, 203; Arnold v. Rock River Valley Railroad, 5 Duer, 207; Sanders v. Bacon, 8 Johns. 485; Cummings v. Gassett, 19 Vt. 308.

¶2In this Commonwealth, however, it is settled by an uninter* rupted series of decisions, that any language, put upon any portion of the face or back of a promissory note, which has relation to the subject-matter of the note, by the maker of it before delivery, is a part of the contract; and that if by such language payment of the amount is not necessarily to be made at all events, and of the full sum in lawful money, and at a time certain to arrive, and subject to no contingency, the note is not negotiable. Jones v. Fales, 4 Mass. 245. Springfield Bank v. Merrick, 14 Mass. 322. Heywood v. Perrin, 10 Pick. 228. Makepeace v. Harvard College, 10 Pick. 298. Wheelock v. Freeman, 13 Pick. 165. Barnard v. Cushing, 4 Met. 230. Cota v. Buck, 7 Met. 588. Osgood v. Pearsons, 4 Gray, 455. Palmer v. Ward, 6 Gray, 340. Hubbard v. Mosely, 11 Gray, 170. Haskell v. Lambert, 16 Gray, 592. Way v. Smith, 111 Mass. 523. Stults v. Silva, 119 Mass. 137.

¶3The words written upon the face of the note, “ given as collateral security with agreement,” being incorporated in and made part of the contract, indicate with clearness that there may be a contingency, to wit, the performance of the undertaking to which this is collateral, in which it would not be payable; and so it lacks that element of negotiability which requires that at all events a sum certain shall be payable at a time certain. As this is decisive of the case, it is unnecessary to consider any other question. Exceptions sustained.

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