The form of mortgage is purely a legal matter and needs but little consideration here. The notes secured by the mortgage are, however, an entirely different matter and require discussion in some detail, for it is with them that the accountant is chiefly concerned. Generally speaking, these notes may be divided into two classes: (1) interest-bearing, (2) non-interest bearing.

$............ Jacksonville, Fla.....................191..

........................ after date, without grace, for value received, the undersigned promise.. to pay to the order of....................

..............................................................................................................................

................................... Dollars ($............) together with interest thereon at the rate of......per centum per annum until maturity, said interest being payable..................................

according to the tenor of .................. interest coupon notes of

............................................ Dollars ($............) each, attached hereto and bearing even date herewith, both principal and interest coupons payable at......................................

.................................. in United States gold coin of the present standard of weight and fineness or its equivalent.

Each maker and indorser waives the right of exemption under the Constitution and laws of Florida, and each maker and indorser waives demand protest and notice of maturity, non-payment or protest, and all requirements necessary to hold each of them liable as makers and indorsers.

It is further agreed that the undersigned shall pay all cost of collection, including a reasonable attorney's fee, on failure to pay this note, or any interest coupon, at maturity. This note shall bear interest at the rate of Ten (10) per centum per annum, from the date of maturity until paid.

This note, and also the interest coupons attached, are to be construed according to the laws of the State of Florida, where they are executed, and are secured by a mortgage on real estate, executed under even date herewith to the payee of this note.

Upon failure to pay any interest coupon on this note, when due, or if any of the conditions and requirements in said mortgage deed be not complied with, this note, at the option of the holder, shall become due and payable.

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Form 42. Mortgage Note - Interest-Bearing.

1. There are, of course, many varieties in the forms of notes in each class, but the note shown in Form 42* illustrates the essentials of the interest-bearing note.

In some instances, the words "on or before" are inserted at the beginning of the note. This gives the maker the right to pay in full at any time, and if such an addition is made to the note, care should be taken to see that it is shown on the records in the books. Attached to this note are the necessary coupons (Form 43). Attention is called to the size of this coupon (approximately 3 X 5 inches), which in practice is much more convenient than the small coupons generally used. Each coupon is securely attached to the body of the note, and is torn off along the perforated line as it becomes due.

2. It will be seen that the note shown in Form 44, if paid at maturity, bears no interest. It is used when it is desired to have a definite number of notes, each for a fixed amount, the total of the series being equal to the principal and interest of the loan.

It is important that the exact amount of each of these notes should be approved by the accountant before they are signed. The calculations involved are somewhat complicated - as are most calculations involving deferred payments - for the reason that each payment is composed of and reduces both principal and interest, the amount by which each is reduced varying with each note; i.e., the portion applicable to principal increases, and the portion representing interest decreases, with each successive payment.

This form of mortgage note is similar to that employed by building and loan societies, most of which draw up tables for their own use showing the amount of principal remaining unpaid at the end of each year or other period. If the note is not paid at maturity, it is usual to provide for the payment of a penalty, either by naming a fixed sum or by a statement that the note shall bear interest after maturity.

•Prepared for use in Florida by Frank R. Fleming, Esq., of the Florida Bar.

No. of Coupon........ Jacksonville, Fla..................... 191

On this ..............day of ........................, a.d. 191..

without grace, the undersigned promise.. to pay to the order of

................................................................................................................................

................................................................................................................................

............................................ Dollars ($............) in United States gold coin of the present standard of weight and fineness or its equivalent, at ......................................

for interest due on that day according to the tenor of a principal note of

............................................ Dollars ($............) of even date herewith. This coupon bears interest at the rate of Ten (10) per centum per annum from maturity until paid. Value received.

Form 43. Mortgage Coupon.

...................... 191..

............................. months after date I promise to pay to the order of ........................ at ........................

the sum of $.................... with interest after maturity at the rate of............per cent per annum.

Value received.

...........................................................................

This note is secured by mortgage on real estate and is subject to the conditions therein contained.

Form 44. Mortgage Note - Non-Interest Bearing.

Many forms of mortgage note contain a clause to the following effect: "This note is secured by a mortgage on real estate and is subject to the conditions therein contained."

Attention is called to the words in italics, for such a qualification might seriously affect the negotiability of the instrument - a matter of importance to the accountant, and one which should be considered by the attorney responsible for the drafting of the papers.

While in New York and a few other states it is customary to use a bond instead of a note, it is believed that the note is used in by far the greater part of the United States. In either event the points to be covered are similar, and local usage will determine the form to be used.