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sary that the waiver should be direct and positive, but it must be clearly established, and will not be inferred from doubtful or equivocal acts or language. The offer by an indorser, prior to the maturity of a note, to execute a new note in renewal, is a waiver of notice of dishonor, since it shows that the indorser did not expect the note to be paid at maturity, and was, therefore, not injured by the failure to give the notice.48 There has been considerable conflict of authority as to whether the taking of indemnity by an indorser or drawer operates as a waiver of notice of dishonor. There are a number of cases to the effect that where an indorser has taken security or other indemnity sufficient to protect himself from any loss because of his indorsement, he thereby impliedly waives his right to a notice of dishonor. In any event,

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and protest can be dispensed with by agreement or waiver, is a familiar doctrine of the text-books. The waiver may be either verbally or in writing. It may be expressed in strict terms, or inferred from the words or acts of the party. It may result from any understanding between the parties which is of such a character as to satisfy the mind that a waiver is intended."

48. Jenkins v. White, 147 Pa. St. 303, 23 Atl. 556.

49. Stephenson v. Primrose, 8 Port. (Ala.) 155, 33 Am. Dec. 281; Holman v. Whiting, 19 Ala. 703; Mead v. Small, 2 Me. 207; Beard V. Westerman, 32 Ohio St. 29; Develing v. Ferris, 18 Ohio, 170; Durham v. Price, 5 Yerg. (Tenn.) 300, 26 Am. Dec. 267.

case of Markland v. McDaniel, 51 Kan. 350, 32 Pac. 1114, 20 L. R. A. 96, it was held where indorsers of a negotiable note tell the holder before maturity not to do anything with the note, and that they will pay it, it is unnecessary in order to charge them as such indorsers, that formal demand of payment be made on the maker, and notice given to the indorsers of his failure to pay, but both demand and notice will be deemed waived. See also Minturn v. Fisher, 7 Cal. 573; Keyes v. Winter, 54 Me. 399; Lane v. Stewart, 20 Me. 98; Marshall v. Mitchell, 35 Me. 221; Schley v. Merrit, 37 Md. 352; Boyd v. Cleveland, 4 Pick. (Mass.) 524; Tucker Mfg. Co. v. Fairbanks, 98 Mass. 101; Sieger v. Second Nat. Bank, 132 Pa. St. 307, 19 Atl. 217; Hale v. Danforth, 46 Wis. 554, 1 N. W. 284. In the case Taking security not a waiver.- In of Russell v. Cronkite, 32 Barb. (N. the case of Woodman v. Eastman, 10 Y.) 282, it appeared that on the day N. H. 359, 367, the court said: "An before the maturity of the note the indorser of a note, who holds a mortholder and maker called on the in- gage for its security, unless there is dorser and the maker said: "He has at the time of the indorsement, or come to notify you to make you afterward, some other evidence of holden." The holder then said: "If waiver, seems to have the same right you don't say it it all right, I shall to be exonerated by the neglect of the notify you on the last day," etc. The indorser said: "The note is perfectly good; put yourself to no trouble; it is all right." It was held that notice of dishonor was waived.

47. Ross v. Hurd, 71 N. Y. 14; Cady v. Bradshaw, 116 N. Y. 188, 22 N. E. 371, 5 L. R. A. 557. In the case of Glaze v. Ferguson, 48 Kan. 159, the court said: "That the presentment of a note, as well as notice

holder, as any other indorser. In such case, if there was but one note secured by the mortgage, the indorsee would either be entitled to the benefit of the mortgage, upon the ground that it passed as an incident; or the mortgage would be destroyed by the transfer of the note, and the holder would have a right to attach the land. If there were other demands secured by the mortgage and

there must be something more than the mere taking of security; there must be a taking of funds or property of the maker sufficient to meet the payment of the note or there must have been an assignment of all the property, real and personal, belonging to the maker, for that purpose.50 It would seem that effect of taking the security would be controlled by the purpose for which it was given; if for the purpose of supplying the indorser with the means of pay

retained by the mortgagee, it might must be the taking into his possession be different, but that could not change of funds or property of the principal, the nature of the case. If by the in- sufficient for the purpose of meeting dorsement the note was so separated the payment of the note; or he must from the mortgage that the latter was have an assignment of all the propno longer a security, the indorsee erty, real and personal, of the makers might attach the equity of redemp- for that purpose.

tion. In either case there would be The following cases are to the same nothing to show that it was within effect: Burroughs v. Hannegan, Fed the contemplation of the parties that Cas. No. 2,205, 1 McLean (U. S.), the right to require demand and no- 309; Carlisle v. Hill, 16 Ala. 398; tice should be waived, and, of course, Holland v. Turner, 10 Conn. 308; nothing to show even an implied agreement to that effect."

Among other cases to the same effect are Kramer v. Sandford, 4 Watts & S. (Pa.) 328; Moses v. Ela, 43 N. H. 557, 82 Am. Dec. 175; Whittier v. Collins, 15 R. I. 44, 23 Atl. 39; Nilson v. Senier, 14 Wis. 380.

Marshall v. Mitchell, 34 Me. 227; Marine Bank v. Smith, 18 Me. 99; Duvall v. Farmers' Bank, 9 Gill & J. (Md.) 31; Walters v. Munroe, 17 Md. 154, 77 Am. Dec. 328; Creamer v. Perry, 17 Pick. (Mass.) 332, 27 Am. Dec. 297; National Hudson River Bank v. Reynolds, 57 Hun (N. Y.), 307, 10 N. Y. Supp. 669; Spencer v. Harvey, 17 Wend. (N. Y.) 489; Bruce v. Lytle, 13 Barb. (N. Y.) 163; Swann v. Hedges, 3 Head (Tenn.), 251; Walker v. Crouch, 5 Leigh (Va.), 522.

50. Sufficient funds or property to meet note. This whole question was considered in Kramer v. Sandford, 4 Watts & S. (Pa.) 328, upon principle, and all the authorities were ably reviewed, and the court arrived at the Assignment of all of maker's propfollowing conclusions: (1) That de- erty. before the maturity of the note, mand and notice were not necessary to the indorser, for the express purwhere the indorser had taken a gen- pose of meeting the note when it be eral assignment of the maker's prop- comes due, will operate as a waiver of erty, upon the ground that in such notice. Stephenson v. Primrose, 8 a case the indorser had obtained Port. (Ala.) 155, 33 Am. Dec. 281: everything which notice was intended Clift v. Rodger, 25 Hun (N. Y.), 39; to enable him to obtain. (2) That Coddington v. Davis, 3 Den. (N. Y.) in other cases of security, the ques- 16: Mechanics' Bank v. Griswold, 7 tion was whether the indorser had, as Wend. (N. Y.) 165; Barton v. Baker, between himself and the maker, be- 1 Serg. & R. (Pa.) 334, 7 Am. Dec. 620. come the party whose duty it was to But see contra, Moses v. Ela, 43 N. take up the note; and (3) that where H. 557, 82 Am. Dec. 175. no waiver of recourse to the maker But where a general assignment is by the indorser had taken place made to an indorser for the benefit there no implied waiver of notice of all the creditors of the maker, and existed. See also Seacord V. Mil- is sufficient only for the payment of a ler, 13 N. Y. 55, where it is held small portion of the debts of the that there must be something more maker, the indorser is entitled to nothan the mere precaution by an tice of dishonor. Woodbury v. Crum, indorser of taking security from his Fed. Cas. No. 17,969, 1 Biss. (U. S.) principal, to operate as a dispensation 284; Second Nat. Bank v. McGuire, 33 of a regular demand and notice. There Ohio St. 295, 31 Am. Rep. 539.

ing the note at its maturity there can be no question but that it would operate as a waiver of notice.51

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e. By whom made. The waiver of notice of dishonor must be made by the party whose right it is to receive such notice; the declarations of any other person are not admissible to show a waiver by such party.52 A waiver may be made by an agent of the indorser or drawer, 53 or by any person having his consent. A member of a firm, being authorized to bind the firm, may waive a notice of dishonor in its behalf,55 and the same is true as to the officer of a corporation.56

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f. Whom affected by waiver; statutory provision.— The Negotiable Instruments Law provides that: "Where the waiver is "embodied in the instrument itself, it is binding upon all the par"ties; but where it is written above the signature of an indorser, "it binds him only." 57 It is a general rule that a waiver of demand and notice written over the signature of an indorser is prima facie evidence that it was done with his privity and consent, and is, therefore, binding on him;58 and in such a case evidence is inadmissible to show what was the indorser's intent in writing the words constituting the waiver.50 Independent of the statute, the rule is that a waiver of notice contained in the instrument is bind

ing upon all indorsers.co Such a waiver forms a part of the con

51. Armstrong v. Chadwick, 127 ply to a dormant partner. Mauney Mass. 156; National Hudson River v. Cort, 80 N. C. 300, 30 Am. Rep. 80. Bank v. Reynolds, 57 Hun (N. Y.), 56. Luddington V. Thompson, 4 307, 10 N. Y. Supp. 669. App. Div. (N. Y.) 117, 38 N. Y. Supp. 768.

52. May V. Boisseau, 8 Leigh (Va.), 180. In the case of Pierce v. 57. Neg. Inst. L. (N. Y.), § 181. Whitney, 29 Me. 188, it was held, in For same section in statutes of other an action against an indorser, that States see Appendix. evidence that the maker of a note addressed a letter to the holder, informing him that he should not be able to pay it at maturity, and requesting an extension, is not admissible to excuse a presentment of the note at the maker's place of residence and business, at its maturity. See also Lee Bank v. Spencer, 6 Metc. (Mass.) 308, 39 Am. Dec. 734; Applegarth v. Abbott, 64 Cal. 459.

53. Whitney v. South Paris Mfg. Co., 39 Me. 316.

54. Glaze v. Ferguson, 48 Kan. 157, 29 Pac. 346.

55. Darling v. March, 22 Me. 184; Driggs v. Driggs, 11 N. Y. St. Rep. 256; Baer v. Leppert, 12 Hun (N. Y.), 516. But this principle does not ap

58. Burt v. Parish, 9 Ala. 211; Fisher v. Price, 37 Ala. 407; Savings Bank v. Fisher (Cal.), 41 Pac. 490; City Sav. Bank v. Hopson, 53 Conn. 453, 5 Atl. 601; Carmena v. Mix, 15 La. 165; Farmer v. Rand, 14 Me. 225; Wolford v. Andrews, 29 Minn. 250, 13 N. W. 167; Furber v. Caverly, 42 N. H. 74.

59. Hayes v. Fitch, 47 Ind. 21; Buckley v. Bentley, 42 Barb. (N. Y.) 646.

60. Woodward v. Lowry, 74 Ga. 148; Dunnigan v. Stevens, 122 Ill. 396, 13 N. E. 651; Gordon v. Montgomery, 19 Ind. 110; Neal v. Wood, 23 Ind. 523; Rooker v. Morris, 61 Ind. 286; Sohn v. Morton, 92 Ind. 170; Phillips v. Dippo, 93 Iowa, 35, 61 N. W. 216;

tract; and an indorser is deemed to have adopted the waiver by his contract of indorsement, and his liability becomes fixed by the dishonor of the bill.61

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g. Effect of waiver of protest.- The Negotiable Instruments Law provides that: "A waiver of protest, whether in the case of a foreign bill of exchange or other negotiable instrument, is "deemed a waiver not only of a formal protest, but also of pre"sentment and notice of dishonor." 62 This is declaratory of the general rule, although there are some authorities to the effect that a waiver of notice and protest does not make a demand unnecessary. Justice Story has said that "agreements of this sort

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Iowa Valley State Bank v. Sigstad, 96 Iowa, 491, 65 N. W. 407; Bryant v. Merchants' Bank, 8 Bush (Ky.), 43; Woodman v. Thurston, 8 Cush. (Mass.) 157; Smith v. Pickham, 8 Tex. Civ. App. 326, 28 S. W. 565.

Words stamped on back of instrument. The words "for value received, I hereby waive demand and notice of demand, protest, and notice of protest and nonpayment," when not written over the name of the first indorser by himself, but printed upon the back of the note with a rubber stamp, before any of the names of a number of required accommodation indorsers were written thereupon, are not limited to the first of such indorsers, but must be deemed a part of the note, and, notwithstanding the use of the singular number, must be presumed to be the joint and several contract of all of the indorsers, who must be presumed to have read the words and to have adopted them as a part of their contract; and each of such indorsers are bound by such waiver. Farmers' Exchange Bank v. Altura Gold Mill & Mining Co., 129 Cal. 263, 61 Pac. 1077.

61. Lowry v. Steele, 27 Ind. 168; Jacobs v. Gibson, 77 Mo. App. 244.

62. Neg. Inst. L. (N. Y.), § 182. For same section in statutes of other States see Appendix.

63. Waiver of protest is waiver of demand and notice. The following cases are in support of the rule of the statute:

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Connecticut.- Cook v. Pomeroy, 65 Conn. 466, 32 Atl. 935.

Georgia.- National Exchange Bank v. Kimball, 66 Ga. 753.

Indiana.- Fitch v. Citizens' Nat. Bank, 97 Ind. 211; Gordon v. Montgomery, 19 Ind. 110; Culver v. Marks, 122 Ind. 554, 23 N. E. 1086, 7 L. R. A. 489, 17 Am. St. Rep. 377.

Kansas.- Baker v. Scott, 29 Kan. 136, 44 Am. Rep. 628.

Louisiana.- Harvey v. Nelson, 31 La. Ann. 434, 33 Am. Rep. 222; O'Leary v. Martin, 21 La. Ann. 389; Guyther v. Bourg, 20 La. Ann. 157.

Maine.- Hallowell Nat. Bank V. Marston, 85 Me. 488, 27 Atl. 529; Farmer v. Sewall, 16 Me. 456.

V.

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Massachusetts.- Johnson sons, 140 Mass. 173, 4 N. E. 196. Minnesota.- Wolford v. Andrews, 29 Minn. 250, 43 Am. Rep. 201.

Missouri.- Johnson County Sav. Bank v. Lowe, 47 Mo. App. 151; Jacard v. Anderson, 37 Mo. 91.

New York.- Backus v. Shipherd, 11 Wend. 629; Porter v. Kemball, 53 Barb. 467; Coddington v. Davis, 1 N. Y. 186; Hood v. Hallenbeck, 7 Hun, 364; Seabury v. Hungerford, 2 Hill, 80; Benton v. Martin, 40 N. Y. 345.

North Carolina.- Shaw v. McNeill, 95 N. C. 535.

Ohio.- Macilvaine V. Bradley, 2 Ohio Dec. 55; Dye v. Scott, 35 Ohio St. 194, 35 Am. Rep. 604.

Pennsylvania.- Annville Nat. Bank v. Kettering, 106 Pa. St. 531, 51 Am. Rep. 536; Day v. Ridgway, 17 Pa. St. 303; Scott v. Greer, 10 Pa. St. 103; Valley Nat. Bank v. Urich, 191 Pa. St. 556, 43 Atl. 354.

64. Scull v. Mason, 43 Pa. St. 99;

(for waiver of presentment or notice) are always construed strictly, and are not extended beyond the fair import of the terms." It has, therefore, been said that necessity for presentment for payment at maturity is not obviated by a "waiver of notice."

§ 117. When notice may be dispensed with.

a. Statutory provision.- The Negotiable Instruments Law provides that: "Notice of dishonor is dispensed with when, after "the exercise of reasonable diligence, it cannot be given to or does "not reach the parties sought to be charged.” 67 The English Bills of Exchange Act contains a similar provision.68

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b. In general. The want of funds belonging to a drawer in the hands of the drawee, known to the holder of the bill of exchange, will not excuse the want of a notice of dishonor to an indorser of the bill, but in such a case the drawer will not be entitled to a notice of dishonor.70 But as stated in the opinion of the court in the case of Dickins v. Beale, an extract of which is included in the preceding note, there are exceptions to the rule that a drawer

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66. Voorhies v. Atlee, 29 Iowa, 49; Drinkwater v. Tebbets, 17 Me. 16; Berkshire Bank v. Jones, 6 Mass. 524, 4 Am. Dec. 175; Backus v. Shipherd, 11 Wend. (N. Y.) 629.

67. Neg. Inst. L. (N. Y.), § 183. For same section in statutes of other States see Appendix.

68. English Bills of Exchange Act, 1882, 150 (2-2).

69. Carew v. Duckworth, L. R., 4 Exch. (Eng.) 319; Ralston v. Bullitts, 3 Bibb (Ky.), 261.

70. Want of funds is an excuse. In the case of Dickins v. Beal, 10 Pet. (U. S.) 572, 9 L. Ed. 538, the court said: "An established ex ception to the general rule that notice of the dishonor of a bill must be given to a drawer is, where he has no funds in the hands of the drawee, but of this exception there are some modifications. If the drawer has made, or is making a consignment to the drawee and draws before the consignment comes to hand.

If the goods are in transitu and the bill of lading is omitted to be sent to the consignee or the goods were lost. If the drawer has any funds or property in the hands of the drawee; or there is a fluctuating balance between them in the course of their transactions; or a reasonable expectation that the bill would be paid; or if the drawee has been in the habit of accepting the bills of the drawer without regard to the state of their accounts, this would be deemed equivalent to effects; or if there was a running account between them. In all such cases the drawer is considered as justified in drawing; as so far having a right to draw that 'the transaction cannot be denominated a fraud, for in such a case it is a fair commercial transaction, in which the drawer has a reasonable expectation that his bill will be honored; and he is entitled to the same notice as a drawer with funds, or authority to draw without funds.' But unless he draws under some such circumstances, his drawing without funds, property or authority, puts the transaction out of the pale of commercial usage and law; and as he can in no wise suffer by want of notice of the dishonor of his drafts, it is deemed a useless form."

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