(4) Service by mail. The statute provides that a notice of dishonor may be given by mail. It was the rule of commercial law that where the parties resided at the same place the notice must be personal. The statute by providing generally that service may be made, either personally or by mail, has recognized the obvious fact that the reason for the former rule has ceased to exist. In a number of States provision is made by statute for the service of such a notice by mail where the parties reside in the same place.58

§ 113. Time within which notice must be given.

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a. General and statutory rule. The Negotiable Instruments Law provides that: "Notice may be given as soon as the instru"ment is dishonored; and unless delay is excused as hereinafter provided, must be given within the times fixed by this act." 59 This is also the effect of the rule as contained in the English Bills of Exchange Act. The general rule is that the notice must be given within a reasonable time after its dishonor.61 The law, independent of the statute, has determined with great precision what constitutes reasonable time; it is a mixed question of law and fact, to be determined by the ordinary rules of commercial law, applicable to the particular case, and the circumstances under which the case arose. The general rules, except as modified by the

62

(N. Y.) 330, affd. in 9 N. Y. 279, it 60. English Bills of Exchange Act, was held that a notice which states 1882, § 49 (12), where it is provided that the note was, on the day the that notice may be given as soon as same became due, duly protested for the bill is dishonored, and must be nonpayment," communicates, by a given within a reasonable time therenecessary implication, the facts that a demand of payment was made on the proper day, and at the proper place, and was refused, and is, therefore, a valid notice.

58. Alabama (Code, § 1777). In Illinois (Hurd's Stats., 1901, chap. 99, § 12, p. 1235), it is provided that notice may be given by mail in towns of 10,000 inhabitants or more. In Michi gan (Howell's Stat., §§ 1586, 1591), and Minnesota (Stat., §§ 2230, 2232, 2274, 2275), notice may be sent by mail in all cases. In New Jersey, service may be made by mail. Gen. Stat. 1895, p. 2606, § 16. In New York service by mail has been authorized in all cases by Laws 1857, chap. 416, which was repealed by the Negotiable Instruments Law.

59. Neg. Inst. L. (N. Y.), § 173. For the same section in statutes of other States see Appendix.

after. See also Burbridge v. Manners, 3 Campb. (Eng.) 193; Hine v. Allely, 4 B. & Ad. (Eng.) 624; Hirschfield v. Smith, L. R., 1 C. P. (Eng.) 351; Bray v. Hadwen, 5 M. & S. (Eng.) 68; Berridge v. Fitzgerald, 38 L. J. Q. B. (Eng.) 335.

61. Bull v. First Nat. Bank, 14 Fed. 612; Eldridge v. Rogers, Minor (Ala.), 392; Phelps v. Blood, 2 Root (Conn.), 518; Noble v. Kentucky Bank, 3 A. K. Marsh. (Ky.) 262; Bank of North America v. Vardon, 2 Dall. (Pa.) 78; German-American Bank v. Atwater, 165 N. Y. 36, 58 N. E. 763.

62. Edwards on Bills and Notes, p. 615.

Reasonable time.- The time within which a notice of dishonor should be given is not fixed by any unvarying rule under the common law. "It was only requisite that demand should be

statute, are still in force, and subject to the statute will still be used in determining what constitutes reasonable time. Notice of dishonor given the day the bill or note becomes due is not too soon; for although payment may still be made within the day, nonpayment on presentment is a dishonor.63 A demand of payment at any reasonable hour of the day on which an instrument falls due, and a refusal to pay, will warrant notice of dishonor to any of the prior parties.

64

*

* *

made immediately upon maturity of N. Y. Supp. 195; six days, State Bank the paper, and that notice of non- v. Smith, 7 N. C. 70; fourteen payment should be given within a rea- days, Hubbard v. Troy, 24 N. C. sonable time; and a reasonable time 134. would depend to a great extent upon As to bills of exchange: Nine days, the means of transportation and the United States v. Barker, Fed. Cas. facilities existing at the point where No. 14,519; fifteen days, Brown v. the paper was presented for payment Turner, 11 Ala. 752; nineteen days, for the transmission of that class of Green v. Darling, 15 Me. 141; three intelligence. In most of the States days if both parties reside in same of the Union, by adjudged cases, town, Bryden v. Bryden, 11 Johns. where no statute prescribes the time (N. Y.) 187. within which notice shall be given, the term reasonable time' has been defined with such certainty and precision as to furnish almost a fixed rule upon that subject. Of course no rule can be framed by which it can be stated as a matter of law, within what time, generally, a notice of nonpayment must be given in order to bind an indorser, for that would depend upon the particular facts of each case; but where the facts are undisputed, and the time allowed to elapse is manifestly unreasonable, it may be pronounced with perfect confidence that in a certain case the notice was not timely given. The question then becomes one of law and not of fact, and the court may and should pronounce thereon without submitting it to a jury." Per Atkinson, J., in Pattillo v. Alexander, 96 Ga. 60, 22 S. E. 646, 29 L. R. A. 616.

Useless_delay_will discharge an indorser. West River Bank v. Taylor, 7 Bosw. (N. Y.) 466. The failure of the indorsee of a draft to notify the notary of the address of his indorser, and of the notary to make inquiries in regard thereto of the drawee or others, in consequence of which the notices of protest are first sent to the indorsee, thereby causing an unnecessary delay of two days in serving notice of protest on the indorser, releases the indorser from liability. First Nat. Bank v. Farneman, 93 Iowa, 161, 61 N. W. 424.

63. Burbridge v. Manners, 3 Campb. (Eng.) 193; Youngs v. Lee, 12 N. Y. 551; Cook v. Litchfield, 5 Sandf. (N. Y.) 330; Lindenberger v. Beal, 6 Wheat. (U. S.) 104.

66

64. In the case of Whitwell v. Brigham, 19 Pick. (Mass.) 117, 122, the court said: The law merchant, Time deemed unreasonable as to however, has a modification of the promissory notes: Nine days, Morris principle operating upon negotiable v. Gardner, Fed. Cas. No. 9,830, 1 instruments, by which mercantile Cranch C. C. (U. S.) 213; three paper is considered as falling due months after demand, Keyes v. upon demand, on the last day of Fenstermaker, 24 Cal. 329; eight grace. And a demand made at any days, Hussey v. Freeman, 10 Mass. reasonable hour within the day, and 84; two months, Crain v. Colwell, 8 Johns. (N. Y.) 299; five months, Sice v. Cunningham, 1 Cow. (N. Y.) 397; six days, Borst v. Winckel, 14 Hun (N. Y.), 138; ten days, Deininger v. Miller, 7 App. Div. (N. Y.) 409, 40

a refusal to pay, will warrant notice to any of the prior parties and authorize the commencement of an action." See also Bank of Alexandria v. Swann, 9 Pet. (U. S.) 33; Coleman v. Carpenter, 9 Pa. St. 178.

65

b. Delay in giving notice, when excusable; statutory provision. -The Negotiable Instruments Law contains the following provision: "Delay in giving notice of dishonor is excused when the "delay is caused by circumstances beyond the control of the holder “and not imputable to his default, misconduct, or negligence. "When the cause of delay ceases to operate, notice must be given "with reasonable diligence." This provision is the same as that of the English Bills of Exchange Act, from which it was evidently derived. It is declaratory of the general rule which is a deduction from that other general rule that a notice of dishonor must be given within a reasonable time.67 The absence from home of an indorser is no excuse for a delay in giving notice, since it is not necessary that the service should be personal.68 If the residence of an indorser is unknown, or if through the fault of the indorser in writing his name the notice was misdirected, the delay occasioned thereby is excusable, if due diligence was used in transmitting the notice. The existence of a malignant and contagious

69

65. Neg. Inst. L. (N. Y.), § 184. For the same section in statutes of other States see Appendix.

66. English Bills of Exchange Act, 1882, § 50(1).

67. Rule not changed by statute. - Firth v. Thrush, 8 B. & C. (Eng.) 387; Gladwell v. Turner, L. R., 5 Exch. (Eng.) 61. In the case of Studdy v. Beesty, 60 L. T. (N. S.) (Eng.) 647, in speaking of the change made by the statute, and referring to the case of Allen v. Edmundson, 2 Exch. (Eng.) 719, the court said: "That case is no authority for say ing that, where delay arises from the person who has to give the notice not knowing where to give it, he is exeused from giving it altogether. Under those circumstances the person who has to give the notice must not rest on his inability at the time to find the person to whom it is to be given. He can serve the notice when he does find out where to serve it. That is the old law. The statute only carries out the old law. By the statute notice of dishonor must be given, and must be given within a reasonable time after the dishonor. Then by section 50 (1), delay in giving notice is excused when the delay is caused by circumstances beyond the control of the party giving the notice, and not imputable to his fault; but

the section goes on to say that when the cause of delay ceases to operate the notice must be given with reasonable diligence."

68. Lawrence v. Ralston, 3 Bibb (Ky.), 102; McCrummen v. McCrummen, 5 Mart. (N. S.) (La.) 159; Central Nat. Bank v. Levin, 6 Mo. App. 543.

69. Residence unknown.- If the holder of a note cannot, by diligent inquiry, find the residence of an indorser, it is sufficient to charge him, if notice of nonpayment be given at the first opportunity. Blodgett v. Durgin, 32 Vt. 361. See also Vigers v. Carlton, 14 La. 89, 33 Am. Dec. 575; Eager v. Brown, 11 La. Ann. 625; Robison v. Barber, 3 Am. L. J. (Pa.) 59; Nichol v. Bate, 7 Yerg. (Tenn.) 305, 27 Am. Dec. 505; Marsh v. Barr, 1 Meigs (Tenn.), 68.

Delay caused by illegible writing of indorser.- Where an indorser of a note wrote his name in the usual manner and in good faith, using the initial letter only of his Christian name, but it was written in such a manner that a person not acquainted with the indorser's Christian name would read it A. C. instead of M., and the notary who protested the note read it A. C. and addressed the notice of protest to A. C. H., it was held that the mistake in addressing

disease at the place where the indorser resides is an excuse for delay in giving a notice of dishonor.70 If war has suspended commercial intercourse between localities, notice of dishonor need not be given; and a notice sent by mail during the suspension of commercial intercourse is nugatory, and notice must be again given as soon as commercial intercourse is resumed." After the cause of the delay has been removed due diligence must be used in giving notice; we will hereafter consider what constitutes due diligence in giving notice of dishonor.72

c. Where parties reside in the same place; statutory provision.— The Negotiable Instruments Law contains the following provision: "Where the person giving and the person to receive notice reside "in the same place, notice must be given within the following "times:

"1. If given at the place of business or 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.'

The English Bills of Exchange Act provides that: "In the absence of special circumstances notice is not deemed to have been given within a reasonable time, unless (a) where the person giving and the person to receive notice reside in the same place, the notice is given or sent off in time to reach the latter on the day after the dishonor of the bill." 74 It will be noticed that the effect of the two provisions is substantially the same; in both cases a fixed limit the notice was directly attributable Md. 487; Harden v. Boyce, 59 Barb. to the manner and form of the in- (N. Y.) 425; Farmers' Bank of Virdorser's handwriting in making the ginia v. Gunnell, 26 Gratt. (Va.) indorsement; that the notice sent was 131. a good notice, in law, to the indorser, and that he could not make the mistake which he had thus occasioned available to shield himself from liability; and, although a delay of several days occurred because of the misdirection, it was a good notice to charge the indorser. Manufacturers & Traders' Bank v. Hazard, 30 N. Y. 226.

70. Tunno v. Lague, 2 Johns. Cas. (N. Y.) 1, 1 Am. Dec. 14; Hanauer v. Anderson, 84 Tenn. 340.

71. Peters v. Hobbs, 25 Ark. 67, 91 Am. Dec. 526; Norris v. Despard, 38

But after the war has terminated the notice must be given within a reasonable time. Turner v. Patton, 49 Ala. 406; Harp v. Kenner, 19 La. Ann. 63; Bynum v. Apperson, 9 Heisk. (Tenn.) 632; Bank of Old Dominion v. McVeigh, 29 Gratt. (Va.) 546.

72. See post, § 117 (c). See also Manufacturers & Traders' Bank v. Hazard, 30 N. Y. 226.

73. Neg. Inst. L. (N. Y.), § 174. For the same section in statutes of other States see Appendix.

74. English Bills of Exchange Act, 1882, § 49 (12a).

75

is made to what will be regarded as a reasonable time after the dishonor of the bill or note; in both where the parties reside in the same place the notice will not bind the party to receive the notice unless it reach him on the day after the dishonor. The statute seems to have disregarded the existence of the general rule that where the parties reside in the same place notice by mail will be insufficient to charge the person to be served with the notice; and is evidently in recognition of the rule as laid down in a number of cases that if the notice deposited in the post-office directed to one residing in the same place is actually received within a reasonable time it is sufficient.76 The authorities are generally in support of the rule that a notice is served within a reasonable time after the dishonor of an instrument, where the parties reside in the same place, if the notice reach the party entitled to receive it on the day following the dishonor." If the notice is served personally the statute applies the rule, which obtains in the case of presentment for payment,78 that the service be made before the usual hours of rest on the day following the dishonor.

d. Where parties reside at different places; statutory provision. -The Negotiable Instruments Law provides as follows: "Where "the person giving and the person to receive notice reside in different places, the notice must be given within the following "times:

"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." 79

The English Bills of Exchange Act requires that in such cases

75. See § 112, (b), (4), ante.

76. Hyslop v. Jones, Fed. Cas. No. 6,990, 3 McLean (U. S.), 96; Foster v. McDonald, 5 Ala. 376; Grinman v. Walker, 9 Iowa, 426; Phelps v. Stocking, 21 Neb. 443, 32 N. W. 217; Cornett v. Hafer, 43 Kan. 60, 22 Pac. 1015; Cabot Bank v. Warner, 10 Allen (Mass.), 522.

77. Rowe v. Tepper, 13 C. B. (Eng.) 249; Smith v. Mullett, 2 Campb. (Eng.) 208; Lockwood v.

Crawford, 18 Conn. 361; Barker v.
Webster, 10 Iowa, 593; Smith V.
Roach, 7 B. Mon. (Ky.) 17; Eagle
Bank v. Chapin, 3 Pick. (Mass.) 180;
Moore v. Somerset, 6 Watts & S.
(Pa.) 262.

78. See ante, § 92 (c).

79. Neg. Inst. L. (N. Y.), § 175. For the same section in statutes of other States see Appendix. See Mohlman Co. v. McKane, 60 App. Div. (N. Y.) 546, 69 N. Y. Supp. 1046.