such notice. Still, if he can show that the drawer has not, in point of fact, suffered prejudice by the omission, the plaintiff can maintain his action against him.2

3

The drawer of a cheque is, in a word, treated as the principal debtor sub modo; he is not discharged either by failure to make presentment within the time required in the case of a bill of exchange payable (like a cheque) on demand, or by want of notice of dishonor upon presentment and refusal to pay, unless the drawer has suffered some loss or prejudice thereby, and then only to the extent of his loss. Reasonable ground to draw will not help the drawer of a cheque in such a case. For example (hypothetical): A draws a cheque on his banker B, payable to C or order. C holds the cheque for a week; within which time, on any day, he might reasonably have presented it to B for payment. When the cheque was drawn, B was solvent and paying his customers' cheques, and continued to do so for several days afterwards. Before the cheque is presented B stops payment, and the cheque is dishonored, and A is not notified. Subsequently B makes an arrangement with his creditors, and ultimately pays them, including A, in full. A is liable on the cheque regardless of the delay in presenting it, and the want of notice of dishonor. Again: In the same case, C omits for ten days to present the cheque, though he might have presented it on any day before. Meantime B fails; but before his failure A withdraws all his funds from B. A is not discharged by C's delay. Again: In the same case B compromises with his

1 Kirkpatrick v. Puryear, 93 Tenn. 409; Chitty, Precedents in Pleading, 117, 3d Lond. ed. See id. form 15, p. 83; Carew v. Duckworth, L. R. 4 Ex. 313, declaration; Kemble v. Mills, 1 Man. & G. 757, 769, approving form in Chitty. Nor can the holder have recourse, in such a case, to the original cause of action, in the absence of evidence permitting. Kirkpatrick v. Puryear, supra; Carroll v. Sweet, 13 L. R. A. 43; s. c. 128 N. Y. 19; Smith v. Miller, 43 N. Y. 171; 52 N. Y. 545.

2 First National Bank v. Buckhannon Bank, 80 Md. 475.

3 Heywood v. Pickering, L. R. 9 Q. B. 428; Robinson v. Hawksford, 9 Q. B. 52; Little v. Phenix Bank, 2 Hill, 425, 428; Bell v. Alexander, 21 Gratt. 1; Morrison v. McCartney, 30 Mo. 183; Griffin v. Kemp, 46 Ind. 172. See Keene v. Beard, 8 C. B. N. s. 372; N. I. L. § 193.

4 Kinyon v. Stanton, 44 Wis. 479.

creditors, including A, at fifty cents on the dollar.

A is liable

on the cheque for half the sum named in it. Again: In the same case A leaves all his funds with B, and loses the whole. A now is discharged by reason of C's delay.1

On the other hand, the holder of a cheque is protected (with an exception to be mentioned) where he has exercised the Diligence of diligence which would satisfy the law in the holder of like case of a bill of exchange; in such a case no cheque: circulation of same. showing of loss or prejudice due to failure to exercise greater diligence would be heard. For example: The holder of a cheque which he receives on Saturday morning presents it on Monday afternoon during banking hours, and the cheque is dishonored, the bank having stopped payment Monday at noon. The holder might have presented the paper on Saturday, or on Monday before noon, when it would have been paid. The diligence required in the ease of a bill of exchange has been exercised, and the drawer is not discharged."

And even though the holder fail to exercise the diligence which would be required if the cheque had been a bill of exchange, the drawer will be discharged only to the extent of prejudice. Whether the delay is in demand of payment or in the giving of notice of dishonor, or in both, makes no difference. This, however, supposes that the cheque has been kept out unduly. The difference between a cheque and a bill in that respect has already been noticed; a bill payable at or after sight may be kept out in circulation for a long period of time without affecting the liability of any of the parties, though the drawee fail, meantime, to the prejudice of the drawer; whereas, a cheque should with reasonable promptness be presented for

1 Kinyon v. Stanton, 44 Wis. 479; Jones v. Heiliger, 36 Wis. 149. In all of these cases the drawer of a bill would be discharged. It should be remem bered that neither a cheque nor a bill of exchange operates as an assignment of the fund or (until acceptance, in the case of a bill) makes the drawee a debtor to the holder. In some States, however, drawing a cheque operates as an assignment of the amount called for. Munn v. Burch, 25 Ill. 35. Ante, p. 50.

2 See Story, Notes, § 493; Bills, §§ 470, 471; Burkhalter v. Second Nat. Bank, 42 N. Y. 538; Simpson v. Pacific Ins. Co., 44 Cal. 139.

payment,1 which means, if the holder and drawee reside in the same place, on the day, or day after, it is taken, or, if they reside in different places, that it should be sent forward to be presented for payment on the day, or day after, it is taken, excluding in either case non-secular days, unless a sufficient reason for not doing so is shown; on pain of discharging the drawer to the extent of any prejudice to him by the default." That is what is meant, it seems, by the statement sometimes made, that the holder of a cheque is bound to greater diligence than the holder of a bill; and the statement is founded upon the fact that a cheque is not naturally an instrument of credit.

Peculiarity of drawer's situacontracts for

For most purposes there is no occasion for separating the contract of drawer from that of indorser in regard to presentment for acceptance; what is true of the one case is true of the other, and hence the subject will be reserved, in the main, for consideration with the other subjects belonging in common to drawing acceptance. and indorsement, and treated under the latter head as the larger one.

tion: drawer

There is one phase, however, of the law relating to presentment for acceptance which is peculiar to the drawer's contract;

1 N. I. L. § 193: 'A cheque must be presented for payment within a reasonable time after its issue.' Watts v. Gans, 114 Ala. 264. Reasonable time in the case of a cheque is the shortest time within which, consistently with ordinary business, presentment can be made. Watts v. Gans.

2 Smith v. Miller, 43 N. Y. 171; s. c. 52 N. Y. 545; Burkhalter v. Second Nat. Bank, 42 N. Y. 538; Simpson v. Pacific Ins. Co., 44 Cal. 139; Alexander v. Burchfield, 7 Man. & G. 1061.

3 Prideaux v. Criddle, L. R. 4 Q. B. 455; Gregg v. Beane, 69 Vt. 22, 26; Kirkpatrick v. Puryear, 93 Tenn. 409; Watts v. Gans, 114 Ala. 264; Industrial Trust Co. v. Weakley, 103 Ala. 458. See Woodruff v. Plant, 41 Conn. 344. There should be no unnecessary use of agents, with their days of additional time. Gregg v. Beane, supra. Unless the cheque is drawn for circulation, or unless statute authorize. Id. See First National Bank v. Miller, 37 Neb. 500; Gifford v. Hardell, 88 Wis. 538; Holmes v. Roe, 62 Mich. 99.

4 Mohawk Bank v. Broderick, 10 Wend. 304, 307, affirmed, 13 Wend 133; Gough v. Staats, 13 Wend. 549, 551, 552.

5 See N. I. L. §§ 150 et seq.

unless, indeed, there happen to be an indorsement upon the paper when it is so presented, in which case the law would apply to the indorsement as well. A bill of exchange payable at a stated time after date need not be presented for acceptance.1 However, according to the better doctrine of the law merchant, the drawer's contract, in the case of a bill of exchange, looks, in all cases in which the bill is not payable on demand, to an acceptance as well as to payment by the drawee. That is, the drawer is understood to engage in favor of the payee, or subsequent holder, that the drawee will give him, at any time, the special security of acceptance; which of course, in the case of paper payable after date, or a stated time after sight, may be long before the maturity of the bill, and thus be a matter of great importance.

2

That undertaking of the drawer may be broken by the refusal of the drawee to accept the bill; there being then, upon due notice (which the law requires), a breach of contract on the part of the drawer, he is in principle, and by the current of authority, liable on the bill at once, regardless of the fact that payment of the bill, by the drawee, may not be required by the order for a long time thereafter. For example: A draws a bill of exchange on B, in favor of C, dated Jan. 1, 1893, payable three months after date. On Jan. 2, 1893, C presents the bill to B for acceptance, and acceptance is refused; the paper is duly protested, and A is duly notified. A is liable on the bill at once; C need not wait until the time stated in the bill before suing.3

The real meaning then of the drawer's contract, in the eye of the law merchant, is that the holder shall have the drawee's acceptance if he desires it, which being given, he shall then have payment by the drawee at the stated time; but that, if the drawee refuse acceptance (or payment), the sum shall be due at once from the drawer; though it must be remembered

1 Walker v. Stetson, 19 Ohio St. 400.

2 Aymar v. Sheldon, 12 Wend. 439.

83 Kent, 95; Bank of Washington v. Triplett, 1 Peters, 25; Union Bank v. Hyde, 6 Wheat. 572; Weldon v. Buck, 4 Johns. 144; Mason v. Franklin, 3 Johns. 202; Thompson v. Cumming, 2 Leigh, 321.

4 N. I. L. § 158.

that it is part of the drawer's contract, in ordinary cases, that all steps necessary to liability in other cases shall be taken, whether on non-acceptance or non-payment after acceptance. Indeed, though presentment for acceptance may be unnecessary, yet if asked for and refused the usual steps are required on pain of discharging the drawer, and not merely for the purpose of fixing his liability.

All this, it must be understood, is applicable to paper payable at, or at a stated time after, sight, as well as to paper payable at, or at a stated time after, date, save that presentment for acceptance in the former case is necessary. And, as has already been intimated, if there happen to be an indorsement upon the paper, the indorser also may be made liable, and sued at once; for his contract, as well as that of the drawer, is broken.

In Pennsylvania, however, a special view of the law merchant upon the foregoing subject obtains. It is there held that where presentment for acceptance is made in a case in which the step is unnecessary, as it is where the paper is payable at a stated time after date, presentment for acceptance, if refused, is to be regarded as nugatory, that is, no rights can arise against the drawer. The holder must wait until the stated time for payment arrives, and then present the paper for payment as if nothing before had been done. If presentment was necessary, refusal to accept would probably give an immediate right of action, in Pennsylvania as well as elsewhere, assuming that all steps were taken; for now the holder has done an act which the drawer required him to do.

The Statute deals with presentment for acceptance thus: Such presentment must be made (1) where the bill is payable after sight, or in any other case where presentment for Where presentacceptance is necessary to fix the maturity of the ment to be instrument; (2) where the bill expressly stipulates for such presentment; or (3) where the bill is drawn payable elsewhere than at the residence or place of business of

1 House v. Adams, 48 Penn. St. 261.

made.