10. B is induced to buy an automobile by false representation. He gives a note in part payment. When he finds that he has been defrauded, he notifies the payee that he will not pay the note, but meanwhile the payee has negotiated the note to another, who is an innocent purchaser for value. Can the latter force B to pay the note?

II. C dates a check and signs his name, but does not fill out the other spaces. The check is stolen and filled out by the thief.

It passes into the hands of an innocent party who pays value.
Will that party be able to collect the check from C?

CHAPTER XXXI

PRESENTMENT FOR PAYMENT

§ 183. Necessity of Presentment

The maker or acceptor of a negotiable instrument is liable without presentment for payment, but if the drawer and indorsers are to be held, it must be presented for payment.

Presentment must be made on the due date except in the case of demand paper which must be presented within a reasonable time. "Days of grace" were three extra days which were formerly allowed for the payment of commercial paper.

§ 184. Requirements for Presentment

§ 72.-Presentment for payment, to be sufficient, must be made:

I. By the holder, or by some person authorized to receive payment on his behalf;

2. At a reasonable hour on a business day;

3. At a proper place as herein defined;

4. To the person primarily liable on the instrument, or if he is absent or inaccessible, to any person found at the place where the presentment is made.

§ 73.-Presentment for payment is made at the proper place:

I. Where a place of payment is specified in the instrument and it is there presented;

2. Where no place of payment is specified, but the address of the person to make payment is given in the instrument and it is there presented;

3. Where no place of payment is specified and no address is given and the instrument is presented at the usual place of business or residence of the person to make payment.

4. In any other case if presented to the person to make payment wherever he can be found, or if presented at his last known place of business or residence.

§ 74. The instrument must be exhibited to the person from whom payment is demanded, and when it is paid must be delivered up to the party paying it.

If the instrument is payable at a bank, presentment must be made during banking hours unless payee has no funds there, in which case any hour before the closing of the bank will do. If the bank holds such a note for collection and it is in the bank on its due date, no other presentment is necessary.

Speaking generally, it is the bank's duty to use all diligence in respect to negotiable paper left with it for collection. This involves prompt presentation for acceptance if acceptance is necessary; and presentation for payment on the date of payment within banking hours, at the place specified in the instrument, if any, and if not, at the maker's place of business. In case the instrument is not paid on presentation when due, it is the bank's duty to protest it, if not otherwise instructed by the owner, and to give due notice of its dishonor to all indorsers, and to do any other things necessary for the collection of the instrument. The bank is liable for any failure in its performance of its duty.

§185. Presentment Excused

§ 82.-Presentment for payment is dispensed with:

I. Where, after the exercise of reasonable diligence pre-
sentment as required by this act cannot be made;
Where the drawee is a fictitious person;

2.

3. By waiver of presentment, express or implied.

§ 186. When Due

§ 85.-Every negotiable instrument is payable at the time fixed therein without grace. When the day of maturity falls upon Sunday or a holiday, the instrument is payable on the

next succeeding business day. Instruments falling due on
Saturday are to be presented for payment on the next suc-
ceeding business day, except that instruments payable on de-
mand may, at the option of the holder, be presented for
payment before twelve o'clock noon on Saturday when that
entire day is not a holiday.

$86.-Where the instrument is payable at a fixed period.
after date, after sight, or after the happening of a specified
event, the time of payment is determined by excluding the
day from which the time is to begin to run, and by including
the date of payment.

If an instrument is due a month or more after date, a calendar month is meant. A note dated February 16 and due a month from date will fall due on March 16, whether in leap year or any other year.

REVIEW QUESTIONS

1. What were "days of grace" as understood in the law relating to commercial paper?

2.

What is the legal effect of failure to make presentment for payment on the due date of a promissory note?

3. What is a bank's liability with reference to negotiable papers left with it for collection?

4. A note held by the bank at which it is payable is not paid at maturity. Must there be a presentment and demand of payment?

5.

How is the due date of commercial paper determined? What is the rule if the due date falls on a holiday? On a Saturday?

6. How should presentment be made?

7.

Why is the maker or acceptor liable even though the instrument is not presented on the due date?

8. Would it be proper under any circumstances to present a note for payment to the maker, who was walking along the street? 9. If the maker cannot be found, what is the situation?

CHAPTER XXXII

NOTICE OF DISHONOR

§ 187. Necessity of Notice

§ 89.-Except as herein otherwise provided, when a negotiable instrument has been dishonored by non-acceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged.

The holder must give notice. If the note has been left with a bank for collection, it as agent for the holder would give notice. If the note has been given to a notary for protest, he usually gives the required notice.

$188. Effect of Notice

§ 92.-Where notice is given by or on behalf of the holder, it enures for the benefit of all subsequent holders and all prior parties who have a right of recourse against the party to whom it is given.

$93.-Where notice is given by or on behalf of a party entitled to give notice, it enures for the benefit of the holder and all parties subsequent to the party to whom notice is given.

$189. Form of Notice

The notice may be informal provided it is so clear as not to mislead the party to whom it is sent. It may even be oral. It may be delivered personally or by mail. It may be given to the party or to someone acting as his authorized agent.