10

with another condition. Sometimes notice alone is waived; sometimes presentment; sometimes protest. The word "protest," however, is now construed, at least in a written waiver, as including dishonor and notice of dishonor, unless expressly limited to its accurate meaning.11

evidence tending to show a knowledge on the part of such indorser at the time of such promise of the failure to give notice of dishonor. Mechanics' & Farmers' Sav. Bank v. Katterjohn, 137 Ky. 427, 125 S. W. 1071, Ann. Cas. 1912A, 439 (N. I. L.). Compare Sheldon v. Horton, 43 N. Y. 93, 3 Am. Rep. 669 (see statement of this case in note 4, supra). See Barker v. Parker, 23 Mass. (6 Pick.) 80.

9 Thus a written waiver of due notice of dishonor does not dispense with presentment. Keith v. Burke, 1 Cababe & Ellis, 551; Hayward v. Empire State Sugar Co., 105 App. Div. 21, 93 N. Y. Supp. 449 (N. I. L.); Hall v. Crane, 213 Mass. 326, 103 N. E. 554 (N. I. L.) Contra: Dye v. Scott, 35 Ohio St. 194, 35 Am. Rep. 604; Baumeister v. Kuntz, 53 Fla. 340, 42 South. 886, semble.

10 Backus v. Shipherd, 11 Wend. (N. Y.) 629; President, etc., of Berkshire Bank v Jones, 6 Mass. 524, 4 Am. Dec. 175; Burnham v. Webster, 17 Me. 50.

11 Coddington v. Davis, 1 N. Y. 186: Porter v. Kemball, 53 Barb. (N. Y.) 467; Shaw v. McNeill, 95 N. C. 535; Brown v. Hull, 33 Grat. (Va.) 23; N. I. L. § 111; Bank of Montpelier v. Montpelier Lumber Co., 16 Idaho, 730, 102 Pac. 685 (N. I. L.); Atkinson v. Skidmore, 152 Ky. 413, 153 S. W. 456 (N. I. L.). Where the expression of intention is oral, the interpretation of the word "protest" is, it seems, for the jury. See Annville Nat. Bank v. Kettering, 106 Pa. 531, 51 Am. Rep. 536.

149. Definition.

150.

151-152. 153-155.

156.

CHAPTER X

CHECKS.

Presentment and Notice of Dishonor-Effect of Delay.
Rights of Holder against Bank.

Certification and Acceptance of Checks.

Failure of Bank to Honor Check.

DEFINITION

149. A check is a bill of exchange drawn on a bank payable on demand.1

The following is the ordinary form of a check:

Chicago, Ill., Aug. 1st, 1895.

First National Bank of Chicago, Ill.

Pay to Adam Smith or order [or to Adam Smith simply, or to Adam Smith or bearer, or simply to bearer] Five hundred and 50/100..

$500 50/100

.. Dollars John Jones.

John Jones is the drawer; the First National Bank of Chicago, Ill., is the drawee; Adam Smith is the payee; and the payee, while he holds the check, or any person who holds it by transfer from him, is called the "holder."

The Negotiable Instruments Law defines a check as a "bill of exchange drawn on a bank payable on demand." 2

1 N. I. L. § 185.

2 N. I. L. § 185, provides: "A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this act applicable to a bill of exchange payable on demand apply to a check." This section is substantially the same as section 73 of the English Bills of Exchange Act, and like that section is declaratory of the pre-existing law merchant. McLean v. Clydesdale Banking Co., 9 App. Cas. 95, per Lord Blackburn; People v. Kemp, 76 Mich. 410, 43 N. W. 439. See Wisner v. First Nat. Bank of Gallitzin, 220 Pa. 21, 68 Atl. 955, 17 L. R. A. (N. S.) 1266 (N. I. L.); Van Buskirk v. State Bank, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182 (N. I. L.); Chalmers, Bills of Exchange (7th Ed.) 273. A check is not necessarily an inland bill of exchange. Where a foreign

To be a check, the order must be drawn on a bank or banker. If drawn on any other person, it is a bill of exchange, but not a check. It need not, however, appear on the face of the check that the drawee is a banker. It is essential that a check shall be payable on demand; so that if an instrument, though otherwise in the form of a check, and drawn on a bank, orders payment on a day subsequent to its date, it is not a check, but a bill of exchange payable on a certain day, and is subject to all the rules governing such bills of exchange-the rule, for instance, allowing days of grace.

bill is drawn on a bank and payable on demand, it is a check, and therefore subject to the rules, applicable to checks, determining the effect upon recourse against the drawer of a failure to present, protest, and give notice of dishonor. Bowen v. Needles Nat. Bank (C. C.) 87 Fed. 430, affirmed 94 Fed. 925, 36 C. C. A. 553. See Mankey v. Hoyt, 27 S. D. 561, 132 N. W. 230; Amsinck v. Rogers, 103 App. Div. 428, 93 N. Y. Supp. 87 (N. I. L.), affirmed 189 N. Y. 252, 82 N. E. 134, 12 L. R. A. (N. S.) 875, 121 Am. St. Rep. 858, 12 Ann. Cas. 450; Dickins v. Beal, 10 Pet. 572, 579, 9 L. Ed. 538; Bank of United States v. Daniel, 12 Pet. 32, 52, 9 L. Ed. 989; Bull v. First Nat. Bank, 123 U. S. 105, 8 Sup. Ct. 62, 31 L. Ed. 97; Roberts v. Corbin, 26 Iowa, 315, 96 Am. Dec. 146; Little v. Phenix Bank, 2 Hill (N. Y.) 425.

3 In Industrial Bank of Chicago v. Bowes, 165 Ill. 70, 46 N. E. 10, 56 Am. St. Rep. 228, it was held that in order that a bill be a check, it is not essential that the drawee be engaged in a general banking business. In that case the drawer had borrowed from the drawee, P. H. & Co., a sum which was to be paid out by the drawee upon the orders of the drawer; and the drawer indorsed upon an architect's certificate, which stated a certain amount to be due to a certain contractor: "P. H. & Co.: Pay to the order of E." It was held that, in the absence of damage resulting to him therefrom, the drawer was not discharged by a failure to make presentment or to give him notice of dishonor.

4 Bowen v. Newell, 8 N. Y. 190; Bull v. First Nat. Bank, 123 U. S. 105, 8 Sup. Ct. 62, 31 L. Ed. 97; Morrison v. Bailey, 5 Ohio St. 13, 64 Am. Dec. 632; Woodruff v. Merchants' Bank of City of New York, 25 Wend. (N. Y.) 673; Harker v. Anderson, 21 Wend. (N. Y.) 372; Minturn v. Fisher, 4 Cal. 36; Brown v. Lusk, 4 Yerg. (Tenn.) 210; Georgia Nat. Bank v. Henderson, 46 Ga. 487, 12 Am. Rep. 590; Bradley v. Delaplaine, 5 Har. (Del.) 305; Harrison v. Nicollet Nat. Bank of Minneapolis, 41 Minn. 488, 43 N. W. 336, 5 L. R. A. 746, 16 Am. St. Rep. 718. Contra: Re Brown, 2 Story, 502, Fed. Cas. No. 1,985; Champion v. Gordon, 70 Pa. 475, 10 Am. Rep. 681; Westminster Bank v. Wheaton, 4 R. I. 30; Way v. Towle, 155 Mass. 374, 29 N. E. 506,

Memorandum Checks

It is necessary to notice shortly a class of checks of a peculiar character, known as "memorandum checks." In form and appearance a memorandum check does not differ from ordinary checks, except that on the face of them is written the word "memorandum," or "mem.," or "memo." Such a check "is given by the maker to the payee rather as a memorandum of indebtedness than as a payment. Between those parties it is considered as a duebill, or an I O U. It can be sued upon as a promissory note, without presentment to the bank, whereas the holder of a regular check must first demand its payment at bank, and be refused, before he can maintain an action against the drawer." The fact that the word "memorandum," or "mem.," or "memo.," is written on a check, makes it a memorandum check. The bank, however, is not bound to pay any attention to these words, or to recognize any contract as implied between the maker and payee which gives the check any peculiar character. If such a check is presented for payment, and the drawer has sufficient funds to meet it, the bank must honor

5

31 Am. St. Rep. 552. See Daniel, Neg. Inst. §§ 1573-1575. It seems that a post-dated bill, drawn on a bank and otherwise purporting to be payable on demand, is not a check, but a bill of exchange payable on a certain designated day. Wilson v. McEachern, 9 Ga. App. 584, 71 S. E. 946. See Chalmers, Bills of Exchange (7th Ed.) 37. Compare Hitchcock v. Edwards, 60 L. T. Rep. 636; Royal Bank v. Tottenham, [1894] 2 Q. B. 715. But see Daniel, Neg. Inst. (5th Ed.) § 1578, and cases cited. See Amsinck v. Rogers, 103 App. Div. 428, 93 N. Y. Supp. 87 (N. I. L.), affirmed 189 N. Y. 252, 82 N. E. 134, 12 L. R. A. (N. S.) 875, 121 Am. St. Rep. 858, 12 Ann. Cas. 450, where it was held that, although the instrument recited on its face that it was a check, since it was not drawn on a bank, it was subject to the rules as to the effect of failure to protest the instrument, applicable to other bills of exchange. See, also, Symonds v. Riley, 188 Mass. 470, 74 N. E. 926. An indorsee holder of a post-dated check, becoming such before the date named in the instrument, is not, by such postdating, precluded from being a holder in due course. The instrument is complete and regular upon its face. Albert v. Hoffman, 64 Misc. Rep. 87, 117 N. Y. Supp. 1043 (N. I. L.); Hitchcock v. Edwards, 60 L. T. R. 636. See N. I. L. §§ 12, 52; B. E. A. §§ 13 (subd. 2), 29 (subd. 1); Triphonoff v. Sweeney, 65 Or. 299, 130 Pac. 979 (N. I. L.).

Van Schaack, Bank Checks, 184.

it like any ordinary check. If the agreement between the maker and payee is that it shall not be presented for payment, any remedy of the drawer for the breach of such agreement is solely against the payee."

A memorandum check presents all the features of other negotiable instruments when transferred or indorsed to a bona fide holder for value." "A memorandum check is a contract by which the maker engages to pay the bona fide holder absolutely, and not upon a condition to pay if the bank upon which it be drawn should not pay upon presentation at maturity, and if due notice of the presentation and nonpayment should be given."

PRESENTMENT AND NOTICE OF DISHONOREFFECT OF DELAY

150. The drawer of a check is not discharged from his obligation by unreasonable delay in presentment of the check for payment, or in giving him notice of dishonor, in case of presentment and dishonor, unless he has been actually prejudiced thereby; but if he has suffered a loss thereby, as by failure of the bank, he is discharged to the extent of his loss.

It seems that the failure to make due presentment of a demand bill of exchange other than a check for payment will discharge the drawer. Checks, however, in this respect, stand on a different footing. In no case will delay in presentment discharge the drawer of a check 10 unless

Morse, Banks, 313.

7 Van Schaack, Bank Checks, 185.

8 Franklin Bank v. Freeman, 16 Pick. (Mass.) 535. See, also, as to this class of checks, Cushing v. Gore, 15 Mass. 69; Dykers v. Leather Mfgs. Bank, 11 Paige (N. Y.) 612.

9 See Thornburg v. Emmons, 23 W. Va. 325, 334, and authorities cited. This conclusion is unavoidable under the Negotiable Instruments Law. N. I. L. §§ 89, 185, 186. See Gate City Nat. Bank v. Schmidt, 168 Mo. App. 153, 152 S. W. 101 (N. I. L.).

10 Indorsers stand on a different footing from the drawer; and, as in the case of bills of exchange, unless presentment be made, and

NORT.B.& N.(4TH ED.)-37