Chapter X - Notes Drafts Page 03


If a note comes due on Sunday or on a legal holiday, payment must be made on the following day.

Holidays are appointed by the separate states.

The United States recognizes no day as a holiday, except Sunday, and that is acknowledged through custom.

It is customary for banks to notify makers of notes held by them a few days before time set for payment; but this is not required by law.

If a note lies unpaid in bank the day set for payment, as soon as the office closes for regular business the note is protested.

The protest is made before a notary public; he is usually an employee of the bank.

In the protest formal objection is made against the breaking of the promise, and demanding that the matter be set right by the maker, or on his failure, by the indorser.

The indorser, who has to pay, has a claim for the amount on the maker of the note, as he would have for money loaned or goods sold, and he can sue to collect.

A note that is not paid within a fixed time is said to be "outlawed."

Remember the indorser of a note must be notified within twenty- four hours of the failure of the drawer to make good.


The object in protesting a note is to fix the liability on the endorser.

If there be more than one endorser notice of protest must be sent to all at the same time.

It is better, where possible, to serve the notices on the indorsers in person.

The payee must also be notified.


There is a form of note sometimes used in business which is given without any consideration on the part of the maker. This is known as an "accommodation note."

The maker of such a note does not expect to pay it, nor does the man in whose favor it is drawn expect to do so.

An accommodation note is an instrument by the sale of which, or through a bank, money may be raised for immediate use.

The maker in this case is a friend who loans his name.

As there was no value received such a note could not be collected by the payee.

But if it passes into the hands of a third party, who endorses it, then the maker of the note can be compelled to pay.


A note may be lost or stolen.

The losing of a note does not release the maker from payment of the full amount on the date and at the place named.

The loser should at once notify the maker of his loss.

A man who buys, before its maturity, a lost or stolen note, may collect the full amount from the maker, provided the note is payable to "bearer" and no notice of the loss has been published.

When the maker of a lost note pays the amount to the original owner, he should receive from him what is known as a "bond of indemnity."

This bond is to secure him against paying a second time.


There are some things worth remembering about promissory notes.

1. Never give one if you can pay cash. 2. A note made on Sunday is worthless in some states. 3. A note given under compulsion is worthless. 4. Notes made by a drunken person, or obtained by any form of fraud cannot be collected under law. 5. Notes bear interest only when so stated in body of note. 6. The holder of a note has a legal claim against every indorser. 7. Each indorser is responsible to every indorser who follows him. 8. Notes are valid without reference to the kind of paper, or whether they are written with pen or pencil. 9. Losing a note does not release the maker from payment. 10. If no time is set in a note for payment, it becomes due as soon as it is made. 11. Where a note is made in one state and is payable in another, it is governed by the laws of the state in which it is to be paid. 12. Notes payable on demand draw no interest until after they have been presented for payment. 13. If a note reads "with interest" and no rate is specified then it draws the legal interest in the state in which it was made. 14. Demand notes are not entitled to days of grace. 15. If no place of payment is named in a note, it should be presented to the maker personally in business hours. 16. The misspelling of a word or words in no way invalidates a note. 17. If a person who cannot write makes a note his mark should be properly witnessed. 18. The makers of a joint note must be sued jointly. 19. If the words and the figures in a note disagree, the words take precedence. 20. A note signed by a firm may be collected from either of the partners. 21. When a payment is made on a note secured by a mortgage, the amount is endorsed on the note, never on the mortgage. 22. A note given by a minor is void, unless given for actual necessities, like food and clothing. 23. If a note made by a minor is acknowledged when he comes of age it is binding and collectible.

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