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He assumes the responsibility of a general indorser (See No. 52); he warrants that the acceptance is genuine, that the acceptor will pay the bill and if not he will become responsible for it if the necessary proceedings be duly taken.
100. How may the holder lose his claim on the drawer or indorser?
Negligence on the part of the holder will release the drawer or indorser from his contract in the following cases:
1. Should the holder fail to present the bill for acceptance (when presentment for acceptance is necessary) in due time;
2. Should he fail to present it for payment at the proper time;
3. In case of dishonor, should he fail to protest it, if a foreign bill of exchange, or to send notice of dishonor in due time ;
4. Siould he accept a qualified acceptance without the consent of the drawer or indorser.
101. Upon what conditions can the holder retain his claim on the drawer or indorser?
The paper must be presented
1. For payment or acceptance at the proper time and place;
2. And, if it be dishonored, the indorser or drawer must receive due notice;
3. In the case of a foreign bill of exchange, the paper must be duly protested for non-acceptance or non-payment.
Presentment for Acceptance. 102. When should presentment for acceptance be made? In the following cases:
1. In any case where presentment for acceptance is necessary in order to fix the date of maturity of the instrunient;
2. Where the bill expressly stipulates that it shall be presented for acceptance ;
3. Where the bill is drawn payable elsewhere than at the residence or place of business of the drawee.
103. How should the presentment for acceptance be made?
Presentment for acceptance must be made by the holder or by his authorized agent, at a reasonable hour on a business day, before the bill is overdue and to the drawee or 10 some person authorized to act for him.
104. Where a bill is addressed to two or more persons who are not partners, to whom should presentment be made?
To them all, unless one has authority to act for all. 105. Where the drawee is dead, what should be done? Presentment may be made to his personal representative.
106. Where the drawee has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of his creditors, what should be done?
Presentment may be made to him or to his trustee or assignee.
107. What should a holder do where a bill is not accepted?
He should treat the bill as dishonored and take immediate action against the drawer and indorsers and no presentment for payment is necessary.
Presentment for Payment. 108. When is the presentment of a bill for payment necessary?
It is not necessary to charge the acceptor but, unless otherwise specified, it is necessary to hold the drawer and indorsers.
109. What constitutes a sufficient presentment for payment?
Presentment must be made:
4. To the acceptor, or if he be absent or cannot be found, to any person found at the place where presentment is made.
110. What is considered the proper place for the presentment of a bill?
1. It should be presented at the place of payment specified in the bill.
2. Where no place of payment is thus specified, it should be presented at the previous address if given in the bill.
3. Where no place of payment is specified and no address given, it should be presented at the usual place of business or residence of the payer.
4. In any other case, if presented to the payer wherever he can be found or if presented at his last known place of business or residence, it will be deemed proper. Reasonable diligence must be used to ascertain the residence or place of business of the payer.
III. How should a presentment for payment be made?
The instrument must be exhibited to the person from whom payment is demanded, and when it is paid it must be delivered up to the party paying it.
112. How should presentment be made in case the persons are liable as partners?
When no place of payment is specified, presentment for payment may be made to any one of them even though the firm has been dissolved.
113. How should presentment be made to joint debtors not partners?
When no place of payment is specified, presentment must be made to them all.
114. When is delay in making presentment for payment excused?
When the delay is caused by circumstances beyond the control of the holder and due to no fault or negligence of bis. Fire, flood, war and the prevalence of contagious diseases are some of these circumstances. As soon as the difficulty is removed presentment must be made with reasonable diligence. The same conditions will excuse delay in giving notice of dishonor or in making protest.
Notice of Dishonor.
115. To whom should notice of dishonor be sent?
When a negotiable instrument has been dishonored by non-acceptance or non-payment, due notice of dishonor must be given to the drawer and to each indorser or their liability to the holder ceases. Sometimes the drawer or indorser has waived his rights and then no notice is necessary.
116. By whom should notice be given?
The notice may be given by the holder or by some one on behalf of the holder; or it may be given by any party who may be liable to the holder and who, if compelled to pay it, could recover from the prior parties notified.
117. What is the effect of the notice given by the holder ?
This notice enures for the benefit of all subsequent holders and all prior parties who have a right of recourse against the party notified. In case the holder notifies the drawer and all prior indorsers, it gives each indorser the right of recourse against the drawer and also against those who endorsed before he received the instrument.
In like manner, when notice is given by a party entitled to give notice, it enures for the benefit of the holder and every party subsequent to the one notified. The following case may make this plain. A is drawer of a draft which has been indorsed by B, C and D, and is in the hands of E when dishonored. É notified A, B, C and D. This notice by E gives B, C and D the right of recourse against A. Had E notified D alone, and D then notified A, B and C, E could recover from either A, B or C, because D's notice enures for E's benefit.
118. In what form should the notice be given?
It may be given orally or in writing. The notice should sufficiently identify the instrument and indicate that it has been dishonored. The notice may be delivered personally or sent through the mails. The written notice need not be signed and an insufficient notice may be supplemented and validated by verbal communication. Misdescription of the instrument does not vitiate the notice unless the party to whom the notice is given is in fact misled thereby. See notice of protest No. 139.
119. How must the notice be given where it is known that the party to be notified is dead?
Notice must be given to a personal representative if there be one.
If there be no representative, notice may be sent to the last residence or to the last place of business of the deceased.
120. How should notice be given to partners?
Notice to any one partner is notice to the firm, even though there has been a dissolution.
121. How should notice be given to persons jointly liable who are not partners?
Notice must be given to each of them unless one has authority to act for the others.
122. How should notice be given to a bankrupt?
Where the party to be notified has been adjudged a bankrupt or an insolvent, or has made an assignment for the benefit of his creditors, notice may be given either to the party himself or to his trustee or assignee.
123. Where the parties reside in the same place, when should the notice be given?
1. If given at the place of business of the party to receive notice, it must be given before the close of business hours on the day following dishonor.
2. If given at his residence, it must be given before the usual hours of rest on the day following dishonor.
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.
124. Where the parties reside in different places, when should the notice be sent?
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. If not given through the post office, it must be given within the time that notice would have been received if sent through the mails as specified above.
125. When has the sender given due notice?
When he has deposited in the post office the notice of dishonor duly addressed, he has done what the law requires and will not be held responsible for any miscarriage in the mails. If he deposit the notice in any branch office or in any letter box under the control of the post office departnient, the effect is the same as if deposited in the general post office.