culated to mislead the indorsee and induce him to omit presentment and notice of dishonor. Torbert v. Montague, 38 Colo. 325, 87 Pac. 1145.

Defendant was an accommodation indorser of a demand note payable to plaintiff and given as security for debts which the maker might contract with plaintiff. Defendant reserved the right to withdraw his indorsement after four months upon payment of such debts to the amount of the note. Within four months plaintiff informed defendant of the amount due him from the maker, and defendant said that he would see the maker and if he did not pay "would go and shut him up." Held, these facts did not excuse presentment and notice of dishonor. Congress Brewing Co. v. Habenicht, 83 App. Div. 141, 82 N. Y. Supp. 481.

The drawer, being ignorant that the bill had not been presented for payment, accepted notice of non-payment. Held, that he had not waived presentment. Keith v. Burke, 1 Cababe & Ellis, 551.

SEC. 83. The instrument is dishonored by non-payment when,

1. It is duly presented for payment and payment is refused or can not be obtained; or

2. Presentment is excused and the instrument is overdue and unpaid.

Baumeister v. Kuntz, 53 Fla. 340, 42 So. 886, S. C. secs. 64-1, 109; Reed v. Spear, 107 App. Div. 144, 94 N. Y. Supp. 1007, S. C. secs. 76, 89, 96; German-American Bank v. Milliman, 31 Misc. R. 87, 65 N. Y. Supp. 242, S. C. sec. 75.

SEC. 84. Subject to the provisions of this act, when the instrument is dishonored by non-payment, an immediate right of recourse to all parties secondarily liable thereon accrues to the holder.

German-American Bank v. Milliman, 31 Misc. R. 87, 65 N. Y. Supp. 242, S. C. sec. 75; Baumeister v. Kuntz, 53 Fla. 340, 42 So. 886, S. C. secs. 64-1, 109; Bacigalupo v. Parrilli, 112 N. Y. Supp. 1040, S. C. sec. 89; Gilpin v. Savage, 60 Misc. Rep. 605, 112 N. Y. Supp. 802, S. C. secs. 73, 74; Kennedy v. Thomas, [1894] 2 Q. B. 759, S. C. sec. 85.

SEC. 85. Every negotiable instrument is payable at the time fixed therein without grace. When the day of

maturity falls upon Sunday, or a holiday, the instrument is payable on the next succeeding business day. Instruments falling due on Saturday are to be presented for payment on the next succeeding business day, except that instruments payable on demand may, at the option of the holder, be presented for payment before twelve o'clock noon on Saturday when that entire day is not a holiday."1

In Massachusetts this section was amended (Laws 1899, c. 130), as follows: "On all drafts and bills of exchange made payable within this Commonwealth at sight, three days of grace shall be allowed, unless there is an express stipulation therefor to the contrary."

The New Hampshire Act makes the same provision.

The North Carolina Act (Revisal of 1908, sections 2234, 2235), provides that every negotiable instrument is payable at the time fixed therein without grace except that "all bills of exchange payable within the State, at sight, in which there is an express stipulation to that effect, and not otherwise, shall be entitled to days of grace as the same are allowed by the customs of merchants in foreign bills of exchange, payable at the expiration of a certain period after date on sight; provided, that no days of grace shall be allowed on any bill of exchange, promissory note or draft payable on demand."

The Arizona, Kentucky and Wisconsin Acts omit altogether the third sentence beginning "Instruments falling due."

In the Colorado Act the following words are substituted: "Instruments falling due on any day, in any place where any part of such day is a holiday, are to be presented for payment on the next succeeding business day, except that instruments payable on demand may, at the option of the holder, be presented for

71 "Where a bill is not payable on demand, the day on which it falls due is determined as follows: (1) Three days, called days of grace, are, in every case where the bill itself does not otherwise provide, added to the time of payment as fixed by the bill, and the bill is due and payable on the last day of grace: Provided that (a) When the last day of grace falls on Sunday, Christmas Day, Good Friday, or a day appointed by royal proclamation as a public fast or thanksgiving day, the bill is, except in the case hereinafter provided for, due and payable on the preceding business day. (b) When the last day of grace is a bank holiday (other than Christmas Day or Good Friday) under the Bank Holidays Act, 1871, and Acts amending or extending it, or when the last day of grace is a Sunday and the second day of grace is a bank holiday, the bill is due and payable on the succeeding business day." B. E. A s. 14 (1).

payment during reasonable hours of the part of such day which is not a holiday."

In the Kansas, Missouri (by amendment in 1907), and New York Acts (by amendment in 1898), the words "or becoming payable" were inserted after the words "falling due" in the third sentence. In the Massachusetts Act (by amendment in 1902), the words "or payable" were inserted after "falling due."

The New Hampshire Act makes the same insertion.

The insertion of the words "becoming payable" or "or payable," seems unnecessary and to make no difference in the legal effect of the provision.

The third sentence of this section presents the anomaly that while an instrument falling due on Saturday must be presented on Monday in order to hold drawers and indorsers, yet if the instrument is payable at a special place and the person primarily liable is able and willing to pay it there at maturity (see section 70), it must be presented on Saturday in order to charge the parties liable for such payment with interest after Saturday. This question has arisen in a practical way in Boston, and counsel for both parties agreed upon this construction of the sentence, but the question has not been submitted to a court. It seems also that if a bank or other collecting agent should fail to present the instrument on Saturday, such agent might be chargeable with negligence and liable for any loss thereby caused to the principal. Discussion of these questions by the Clearing House Committee of Boston led to the adoption (Massachusetts Laws, 1910, chap. 417) of the following amendment, applicable to instruments made after its enactment:

"When the day of maturity falls upon Saturday, Sunday, or a holiday, the instrument is payable on the next succeeding business day which is not a Saturday. Instruments payable on demand may at the option of the holder be presented for payment before 12 o'clock noon on Saturday, when that entire day is not a holiday, provided, however, that no person receiving any check, draft, bill of exchange, or promissory note payable on demand shall be deemed guilty of any neglect or omission of duty or incur any liability for not presenting for payment or acceptance or collection such check, draft, bill of exchange or promissory note on a Saturday; provided, also, that the same shall be duly presented for payment or acceptance or collection on the next succeeding business day."

See for a fuller discussion of these questions an article by Professor Williston in 23 Harvard Law Rev. 603.

The Iowa Act adopts section 85, but also by a subsequent section makes this additional provision:

"Section 198. DAYS OF GRACE-demand made on. A demand made on any one of the three days following the day of maturity

of the instrument, except on Sunday or a holiday, shall be as effectual as though made on the day on which demand may be made under the provisions of this act, and the provisions of this act as to notice of non-payment, non-acceptance, and as to protest shall be applicable with reference to such demand as though the demand were made in accordance with the terms of this act; but the provisions of this section shall not be construed as authorizing demand on any day after the third day from that on which the instrument falls due according to its face."

The title of this section is a misnomer for it simply permits the holder to make demand not only on the day of maturity, but on any of the three following days except a Sunday or a holiday. The "grace" is to the holder, not to the acceptor or maker. And the same ambiguities and uncertainties arise here as under section 85; namely, whether if an instrument payable at a special place where the acceptor or maker is able and willing to pay, is not presented on the day of maturity, the acceptor or maker will be liable for interest for the three following so-called days of grace.

Also whether an agent for collection of such an instrument failing to make presentment on the day of maturity, whereby loss results, will not be chargeable with negligence, although presentment is made within three days following the day of maturity.

In the absence of evidence to the contrary the presumption is that the common law which allowed days of grace still remains the law of a sister State. Demelman v. Brazier, 193 Mass. 588, 79 N. E. 812. The N. I. L. was in force in the sister State (New York) at the time, but that fact was not shown.

A bill is dishonored by the refusal of the acceptor to pay at any time on the last day of grace, and notice of dishonor may be given at once to the drawer and indorsers. But no right of action arises until the following day. Kennedy v. Thomas, [1894] 2 Q. B. 759.

SEC. 86. Where the instrument is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run, and by including the date of payment.

The statutory construction laws of the respective States should be consulted in connection with this and similar sections, e. g., see Consolidated Laws of New York, 1909, secs. 20, 24, 25.

SEC. 87. Where the instrument is made payable at a bank it is equivalent to an order to the bank

to pay the same for the account of the principal debtor thereon."2

The Illinois and Nebraska Acts omit this section.

A bank has no authority to pay notes of a depositor made before the adoption of the Negotiable Instruments Law and payable at another bank. Elliott v. Worcester Trust Co., 189 Mass. 542, 75 N. E. 944. When the depositor sues the bank, the bank can not claim the rights of a bona fide purchaser for value before maturity when it simply pleads a general denial and payment and files no claim in set-off. Ib.

SEC. 88. Payment is made in due course when it is made at or after the maturity of the instrument to the holder thereof in good faith and without notice that his title is defective.

The payee of a demand note held a mortgage to secure the debt. He sold and transferred the mortgage to one person for full value and afterwards indorsed the note to a holder in due course. Held, that the note was not paid by the sale of the mortgage. Glasscock v. Balls, 24 Q. B. D. 13, S. C. sec. 119-1.

ARTICLE VII.

NOTICE OF DISHONOR.

SEC. 89. Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged.

AMES: By section 89, if the drawer of a check is not notified of the dishonor, he will be absolutely discharged, although he has suffered no loss by the failure to give him notice. Yet by section 186 the drawer is only discharged to the extent of loss caused by delay in presentment of the check for payment within a reasonable time.

72 Not in B. E. A.