$ 190. Time of Notice

Where both parties reside in the same place, the time when notice must be given is as follows:

§ 103.-1. If given at the place of business of the person to receive notice, it must be given before the close of business hours on the day following;

2. If given at his residence, it must be given before the usual hours of rest on the day following;

3. If sent by mail, it must be deposited in the post-office in time to reach him in usual course on the day following.

If the parties reside in different places, the rule is as follows:

§ 104.-1. If sent by mail, it must be deposited in the post-office in time to go by mail the day following the day of dishonor, or if there be no mail at a convenient hour on that day, by the next mail thereafter.

2. If given otherwise than through the post-office, then within the time that notice would have been received in due course of mail, if it had been deposited in the post-office within the time specified in the last subdivision.

Where a notice is duly deposited in the post-office, within the specified time, it is deemed a good notice, whether or not it reaches its destination.

The party receiving notice is allowed the same period of time to send notice to antecedent parties that was permitted to the last holder.

§ 191. Where to Send Notice

If the party has given an address, notice should be sent there; otherwise

§ 108.-1. Either to the post-office nearest to his place of residence, or to the post-office where he is accustomed to receive his letters; or

2.

If he lives in one place, and has his place of business in another, notice may be sent to either place; or

3. If he is sojourning in another place, notice may be sent to the place where he is so sojourning.

But where the notice is actually received by the party within the time specified in this act, it will be sufficient, though not sent in accordance with the requirements of this section.

Delay in giving notice is excused when caused by circumstances beyond the control of the holder.

§ 192. When Notice Is Not Required

Notice of dishonor is not required to be given to the drawer in the following cases:

$114.-1. Where the drawer and drawee are the same

person;

2. Where the drawee is a fictitious person or a person not having capacity to contract;

3. Where the drawer is the person to whom the instru-
ment is presented for payment;

4. Where the drawer has no right to expect or require
that the drawee or acceptor will honor the instrument;
5. Where the drawer has countermanded payment.

$193. Protest

A protest is practically a certificate by a notary that the instrument has been presented, a demand for payment made, and such demand refused, and that the notary has protested against such non-payment and has sent notice of such protest and non-payment to the party concerned. This is followed by the official signature and seal of the notary. The object of protest is to hold those secondarily liable. The acceptor of a draft and the maker of a note, are principal debtors and are held with or without protest.

Foreign bills of exchange must always be protested, as

the notary's certificate is the only admissible evidence of the bill's dishonor.

In case a bank protests a draft ahead of time, it is liable to the acceptor for injury to his credit.

Any negotiable instrument may be protested for non-acceptance or non-payment, but such procedure is not legally required, except for foreign bills of exchange. The costs of a protest are added to the amount to be paid by any party liable on the instrument. Fees for protest are fixed by statute. Protest is advisable, as the notary will send the required notice and put the evidence of non-payment and due notice in the best possible shape for use, if litigation results.

If it is desired to avoid the expense of protest, it is necessary to attach notice of "No Protest" to any instrument sent through a bank for collection, otherwise the bank will give its notaries a chance to make fees.

REVIEW QUESTIONS

1. Notice of dishonor is to be given by whom? To whom must notice be sent?

2. What is the effect if notice is not given?

3. What is the rule as to the time of notice: (a) Where the parties live in the same place? (b) Where they reside in different places?

4. If notice was sent by mail and owing to a train wreck the letter was destroyed, would the person to be notified be released?

5. Who pays the cost of protest? What does the term "protest" mean?

6. E holds an unpaid note and gives due notice to fourth indorser, who gives due notice to second indorser, who gives due notice to first and third. Who are liable to E?

7. What form of negotiable instruments legally require protest and for what defaults?

CHAPTER XXXIII

DISCHARGE OF NEGOTIABLE INSTRUMENTS

§ 194. When Discharged

A negotiable instrument is discharged:

§ 119.-1. By payment in due course by or on behalf of the principal debtor;

2. By payment in due course by the party accommodated, where the instrument is made or accepted for accommodation;

3. By the intentional cancellation thereof by the holder; 4. By any other act which will discharge a simple contract for the payment of money;

5. When the principal debtor becomes the holder of the instrument at or after maturity in his own right.

A person secondarily liable on the instrument is discharged:

§ 120.-I. By an act which discharges the instrument;
2. By the intentional cancellation of his signature by

the holder;

3. By the discharge of a prior party;

4. By a valid tender of payment made by a prior party.

Also by release of the principal debtor or by extension of his time of payment. Merely letting the time of payment go by without beginning suit is not granting an extension.

§ 195. When Not Discharged

When paid by a party other than the maker or drawee, the instrument is not discharged, but the party paying it may enforce payment against all prior parties on the instrument.

$196. Effect of Alteration

Any material alteration, unless made with the assent of all parties concerned, will invalidate the instrument, except as against the parties who made the alteration.

Any alteration is material which changes:

§ 125-1. The date;

2. The sum payable, either for principal or interest;
3. The time or place of payment;

4. The number or the relations of the parties;

5. The medium or currency in which payment is to be made;

Or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect.

I.

2.

4.

REVIEW QUESTIONS

How is liability of indorser affected when maker and holder agree to extend time of payment?

If an indorser pays a note to avoid suit, what rights has he?

3. An instrument which has been materially altered is in due course in the hands of a holder not a party to the alteration. May he enforce payment according to original tenor? What alterations in negotiable instruments are material? A negotiable note executed and delivered by A to B passes in due course to and is indorsed in blank by B, C, D, and E. F is the last holder and strikes out C's indorsement. What is the liability of C, D, and E?

5.

6.

Under what circumstances is an indorser relieved from liability as such?