182, 81 Atl. 828; Id., 79 N. J. Eq. 223, 81 Atl. 832; National Salt Co. v. Ingraham, 143 Fed. 805, 74 C. C. A. 479), it is held that: (1) The covenants of title, not to commit waste, to make repairs, to keep insured, to pay taxes on the mortgaged premises, and to pay attorney's fees in case of foreclosure, do not violate the rule that a note must not contain a promise to do an act in addition to the payment of money. Wilson v. Campbell, 110 Mich. 580, 68 N. W. 278, 35 L. R. A. 544; Frost v. Fisher, 13 Colo. App. 322, 58 Pac. 872; Dumas v. People's Bank, 146 Ala. 226, 40 South. 964; Brewer v. Slater, 18 App. D. C. 48; THORP v. MINDEMAN, 123 Wis. 149, 101 N. W. 417, 68 L. R. A. 146, 107 Am. St. Rep. 1003, Moore Cases Bills and Notes, 36; Farmers' Nat. Bank of Tecumseh v. McCall, 25 Okl. 600, 106 Pac. 866, 26 L. R. A. (N. S.) 217; Barker v. Sartori, 66 Wash. 260, 119 Pac. 611; Brooke v. Struthers, 110 Mich. 562, 68 N. W. 272, 35 L. R. A. 536, semble; Garnett v. Meyers, 65 Neb. 280, 91 N. W. 400, 94 N. W. 803, semble; Consterdine v. Moore, 65 Neb. 291, 91 N. W. 399, 96 N. W. 1021, 101 Am. St. Rep. 620, semble; Northern Counties Inv. Trust v. Edgar, 65 Neb. 301, 91 N. W. 402, 96 N. W. 1022, semble; Allen v. Dunn, 71 Neb. 831, 99 N. W. 680, semble; Des Moines Sav. Bank v. Arthur (Iowa) 143 N. W. 556; Page v. Ford, 65 Or, 450, 131 Pac. 1013, 45 L. R. A. (N. S.) 247 (N. I. L.). Contra: Cornish v. Woolverton, 32 Mont. 456, 81 Pac. 4, 108 Am. St. Rep. 598 (statutory), semble. (2) A stipulation that the holder may at any time, even before maturity, declare the indebtedness due and foreclose, if he deems himself insecure, does not make the note uncertain as to the time of payment. Iowa Nat. Bank v. Carter, 144 Iowa, 715, 123 N. W. 237, contra. (3) The covenant to pay taxes on the mortgaged property and the proviso authorizing the holder to declare the principal sum due upon default do not make the note uncertain as to the time of payment or the amount to be paid. Wilson v. Campbell, 110 Mich. 580, 68 N. W. 278, 35 L. R. A. 544; Frost v. Fisher, supra; Campbell v. Equitable Securities Co., 17 Colo. App. 417, 68 Pac. 788; Bradbury v. Kinney, 63 Neb. 754, 89 N. W. 257; Hunter v. Clarke, 184 Ill. 158, 56 N. E. 297, 75 Am. St. Rep. 160; THORP v. MINDEMAN, supra; Barker v. Sartori, supra; Brooke v. Struthers, supra, semble; Garnett v. Meyers, supra, semble; Consterdine v. Moore, supra, semble; Northern Counties Inv. Trust v. Edgar, supra, semble; Allen v. Dunn, supra, semble. See, also, Fisher v. O'Hanlon, 93 Neb. 529, 141 N. W. 157 (N. I. L.). Contra: Cornish v. Woolverton, 32 Mont. 456, 81 Pac. 4, 108 Am. St. Rep. 598 (statutory), semble; Nat. Hardware Co. v. Sherwood, 165 Cal. 1, 130 Pac. 881. But a covenant in a mortgage to pay taxes upon the note as a credit of the holder, has been held, erroneously it is submitted, to deprive the note of its negotiability. Brooke v. Struthers, supra; Garnett v. Meyers, supra; Consterdine v. Moore, supra; Northern Counties Inv. Trust v. Edgar, supra; Allen v. Dunn, supra. Contra: Des Moines Sav. Bank v. Arthur (Iowa) 143 N. W. 556; Page v. Ford, 65 Or. 450, 131 Pac. 1013, 45 L. R. A. (N. S.) 247 (N. I. L.). See, also, Wilson v. Campbell, 110 Mich. 580, 68 N. NORT.B.& N.(4TH ED.)—8

W. 278, 35 L. R. A. 544; Cox v. Cayan, 117 Mich. 599, 76 N. W. 96, 72 Am. St. Rep. 585.

Of course, a writing otherwise in the form of a bill or note may expressly incorporate another writing, the provisions of which are such that the two writings, taken as parts of one instrument, do not satisfy the formal requisites of a bill or note. Thus a note which incorporates the mortgage securing it, by making it "part hereof," may incorporate provisions which deprive the note of its status as a negotiable instrument. Lockrow v. Cline, 4 Kan. App. 716, 46 Pac. 720; Chapman v. Steiner, 5 Kan. App. 326, 48 Pac. 607; Wistrand v. Parker, 7 Kan. App. 562, 52 Pac. 59; Wright v. Shimek, 8 Kan. App. 350, 55 Pac. 464; Jones v. Dulick, 8 Kan. App. 855, 55 Pac. 522; Donaldson v. Grant, 15 Utah, 231, 49 Pac. 779; Kendall v. Selby, 66 Neb. 60, 92 N. W. 178, 103 Am. St. Rep. 697. But a reference to another writing, which does not incorporate it, does not affect the character of the bill or note, but operates only to give notice of the collateral agreement. Thus the words "as per memorandum of agreement," "in accordance with contract," "pursuant to written order," "given in connection with contract," "in compliance with vote of company," "according to letter," "on policy No. 33,386," "secured by mortgage," have been held not to effect an incorporation of the writing referred to, but merely to give notice of it. Jury v. Barker, El- ` lis, B. & E. 459; Re Boyse, 33 Ch. Div. 612 (B. E. A.); Byram v. Hunter, 36 Me. 217; Taylor v. Curry, 109 Mass. 36, 12 Am. Rep. 661; Bank of Sherman v. Apperson (C. C.) 4 Fed. 25; First Nat. Bank of Aspen v. Mineral Farm Consol. Mining Co., 17 Colo. App. 452, 68 Pac. 981; Phelps & Bigelow Windmill Co. v. Honeywell, 7 Kan. App. 645, 53 Pac. 488; Boley v. Lake St. Elevated R. Co., 64 Ill. App. 305; Biegler v. Merchants' Loan & Trust Co., 164 Ill. 197, 45 N. E. 512; Zollman v. Jackson Trust & Savings Bank, 238 Ill. 290, 87 N. E. 297, 32 L. R. A. (N. S.) 858; Markey v. Corey, 108 Mich. 184, 66 N. W. 493, 36 L. R. A. 117, 62 Am. St. Rep. 698; First Nat. Bank of Richmond, Ind., v. Badham, 86 S. C. 170, 68 S. E. 536, 138 Am. St. Rep. 1043; Hull v. Angus, 60 Or. 95, 118 Pac. 284 (N. I. L.); Lachenmaier v. Hanson, 196 Fed. 773, 116 C. C. A. 397. Compare Strong v. Jackson, 123 Mass. 60, 25 Am. Rep. 19; Metcalf v. Draper, 98 Ill. App. 399. The result is the same in such cases as where the holder received notice of the collateral agreement in any mode other than an inspection of the bill or note; i. e., he takes subject to defenses arising out of it (Boley v. Lake St. Elevated R. Co., 64 Ill. App. 305), but not to other personal defenses (Littlefield v. Hodge, 6 Mich. 326). It has been held that the words "subject to contract" effect an incorporation of the writing referred to. American Exchange Bank v. Blanchard, 7 Allen (Mass.) 333; Dilley v. Van Wie, 6 Wis. 209; McComas v. Haas, 107 Ind. 512, 518, 8 N. E. 579; Cushing v. Field, 70 Me. 50, 35 Am. Rep. 293; Reed v. Cossatt, 153 Pa. 156, 25 Atl. 1074 semble; Klots Throwing Co. v. Manufacturers' Commercial Co., 179 Fed. 813, 103 C. C. A. 305, 30 L. R. A. (N. S.) 40. See Rieck v. Daigle

17 N. D. 365, 117 N. W. 346; Pope & Ballance v. Righter-Parry Lumber Co., 162 N. C. 206, 78 S. E. 65 (N. I. L.). But in all of these cases except American Exchange Bank v. Blanchard, supra, the only point ruled was that the holder, since he had notice, took subject to defenses arising out of the collateral agreement referred to. The words "subject to conditions of contract" have been held to make a note conditional on its face. Titlow v. Hubbard, 63 Ind. 6; Re Boyse, 33 Ch. Div. 612 (B. E. A.), semble; Rieck v. Daigle, 17 N. D. 365, 117 N. W. 346, semble; Hull v. Angus, 60 Or. 95, 118 Pac. 284 (N. İ. L.), semble. Contra, Littlefield v. Hodge, 6 Mich. 326.

41. An acceptance is an undertaking by the drawee to pay the bill when due.1

It will perhaps help the student to understand the theory of acceptance to present it to him as a phase of the elementary theoretical notion of a contract as constituted by an offer and acceptance.

The acceptance is the assent to the proposition contained in the draft, which on its part is an offer, and which offer and assent, taken together, constitute a contract right or relation. In its practical aspect as a contract, it obviates the transfer of cash by means of credit. By way of illustration: C. owes A. A., we may assume, says to B., "Give me cash for my debt, and treat the debt itself as cash." B.. agrees to this proposition, and A. gives, as an evidence of the transfer of the debt to B., the ordinary draft, making him the payee. B. then turns over this evidence of indebtedness, and the right of action along with it, to D., and D., on his part, to E. E. now comes with the paper to C. At this point the relation of the parties is as follows: The

1 N. I. L. § 132.

right A. had to the debt of C. is now held by E. in the shape of a piece of commercial paper, which E. is about to present to C. A. is liable to B. for the £1,000 B. paid A.; B., on his part, is liable to D. for the £1,000 paid by D. to B.; and D. to E. As yet C. owes nothing to B., D., or E., and he only owes A. for the debt he owed him in the first place. The paper in E.'s hands has been passing from hand to hand, and used for the payment of debts, and accepted as such upon the supposed solvency of each person who has held and indorsed it. C. now says, "Yes, I will pay this £1,000"; and evidences his assent by writing on the bill "Accepted" over his own signature. At that moment he enters into a contract relation with the holder of the bill that he will pay it. In other words, C. promises B., D., and E., and each of them severally, that he will pay £1,000 to the holder. Thus, B., D., and E. may look to either C. or A. for the £1,000 they have expended, but the condition implied is that B., D., and E., inasmuch as they have paid A. for C.'s debt, will look to C. to pay first, and, if C. does not pay, then they will look to A. This is the practical aspect of the theory of acceptance.

It follows that the drawee, until acceptance, is a stranger to the bill. In Swope v. Ross the drawee, who had not

3

2 The acceptance is probably not complete, however, until delivery in jurisdictions in which the Negotiable Instruments Law is not in force; but under section 191 of the act acceptance is complete without delivery if it be communicated. See p. 128, note 37, infra. As to the irrevocability of an acceptance, see Trent Tile Co. v. Ft. Dearborn Nat. Bank, 54 N. J. Law, 33, 23 Atl. 423.

3 Swope v. Ross, 40 Pa. 186, 80 Am. Dec. 567; Chapman v. White, 6 N. Y. 412, 57 Am. Dec. 464; Bellamy v. Majoribanks, 8 Eng. Law & Eq. 523; Mandeville v. Welch, 5 Wheat. 277, 5 L. Ed. 87; Attenborough v. Mackenzie, 36 Eng. Law & Eq. 562; Desha v. Stewart, 6 Ala. 852; Tyler v. Gould, 48 N. Y. 682; Bullard v. Randall, 1 Gray (Mass.) 605, 61 Am. Dec. 433; Tiernan v. Jackson, 5 Pet. 580, 8 L. Ed. 234; Bank of Laddonia v. Bright-Coy Commission Co., 139 Mo. App. 110, 120 S. W. 648 (N. I. L.). Under N. I. L. § 132, the drawee is a stranger to the bill until he accepts in writing. Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182 (N. I. L.); Dugane v. Hvezda Pokroku No. 4 (Iowa) 119 N. W. 141 (N. I. L.); Seattle Shoe Co. v. Packard, 43 Wash. 527, 86 Pac. 845, 117 Am. St. Rep. 1064 (N. I. L.); Faircloth-Byrd Mercan