CHAPTER XCVII.

THE TIME TO DEMAND PAYMENT.

1. As to the time when a note payable on demand. shall be presented for payment, and notice of dishonor given to the indorser, in order to bind him, great uncertainty had existed until the question came up in the New York Court of Appeals, in 1861, in the case of Merritt against Todd, reported in the New York Reports, vol. xxiii., p. 28. The opinion of the court in this case was delivered by Chief Justice Comstock, in which opinion his associate justices, Selden, Denio, Davis, Mason, and James concurred. It seems that one rule had formerly been applied to this class of cases-viz., that "payment of such notes should be demanded within a reasonable time." The court, in this case, endeavored to discover an intelligible principle by which this class of cases could be decided.

2. They discovered two principles, directly antagonistic to each other, one of which would furnish a clear and precise rule for the determination of this question. ChiefJustice Comstock, in his opinion, says: "We have these two principles, directly antagonistic to each other, by one or the other of which questions like the one before us ought to be determined. We say this, because there is no intermediate ground to stand upon. A note payable on demand is either a continuing security, upon which a de

1. As to the time when a note payable on demand shall be presented for payment, and notice of dishonor given to the indorser, in order to bind him, what formerly existed? When did this question come up in the New York Court of Appeals? By whom was the opinion of the court given? What associate justices concurred in his opinion? What had been the rule as to the time of making demand? What did the court discover in this case?

2. Are these two principles in harmony with each other? Is there any middle ground to stand upon? If the note payable on demand be a

mand may be made, in season, at any time (within the Statute of Limitations); or it is not a continuing security, and then a demand must be made immediately-that is to say, on the next day after the holder receives the note, or within such additional time only as the circumstances of distance, etc., may require. If we depart from these rules, and attempt to find one lying somewhere between them, we are lost in uncertainty, and the community will never know how to transact business of this nature in safety. Between these rules, we are to select the one which will best harmonize with the language of the contract and the intention of the parties. A promissory note payable on demand, with interest, and indorsed, is regarded as a continuing security. In this case, demand may be made at any time (within the Statute of Limitations), and the holder is not chargeable with neglect. If the note be payable without interest, it will be a fair exposition of the contract to hold that no time of credit is contemplated by the indorser, and the demand must be made as soon as the next day after the holder receives the same."

3. If a note or bill be drawn on the 1st day of January, payable in ten days, without grace, it is due on the 11th day of January. The day of the date is excluded from the computation. A month, in all cases of commercial paper, and in all commercial contracts, is deemed a calendar month. If a note or bill be drawn on the 31st of January, payable in one month, without grace, it will be due on the last day of February. The general rule is,

continuing security, when may the demand be made? If it is not a continuing security, how soon must the demand be made? If we depart from these rules, and attempt to find one lying between them, what is the effect? Between these two rules, which are we to select? If a promissory note be made payable on demand, with interest, and is indorsed, how is it to be regarded? When may demand be made in this case? If such note be made without interest? How soon must payment be demanded?

3. If a note be drawn on the 1st day of January, payable in ten days, when does it become due? What is excluded from the computation? What is a month in all commercial contracts? If a note or bill be

that "if the date be the last day of the month, the note becomes due on the same day of the month, if there be any such day. If there be no such day, then on the latest day in the month." Days of grace are generally added by the custom of merchants, and they must be included to ascertain the actual time when the note or bill becomes due.

4. The number of days of grace is governed by the law of the place where the note or bill is made payable. Three days of grace are allowed in most of the States. Days of grace are all to be counted consecutively after the day when the note would otherwise become due, without any allowance for Sundays or holidays between the first and last days of grace. If the last day of grace be Sunday, the note becomes due on Saturday. The same rule applies as to other holidays. The latest business day occurring within the days of grace is the day on which the note is due and payable, and the days of grace then expire.

5. Days of grace are allowed on bills and notes payable at sight in most of the States, and also on bills and notes payable by instalments; and days of grace are allowed on each instalment. Notes and bills payble on demand, however, are payable without days of grace. If no time. of payment is expressed on the face of the note, it is payable on demand without days of grace. In the year 1857, a law was passed in the State of New York in relation to commercial paper, by which it was provided that all bills of exchange drawn payable at sight, at any place in that

drawn on the 31st of January, payable in one month, when is it due? What is the general rule, if the date be the last day of the month? If there is no such day? What are added by the custom of merchants?

4. How is the number of days of grace governed? How many days are generally allowed? How are they to be counted? If the last day of grace be Sunday? If it be some other holiday? What is the day of grace on which the note becomes due and payable?

5. What is the rule as to bills and notes payable at sight? If payable by instalments? If payable on demand? If no time of payment be expressed on the face of the note or bill? What law was passed in New York in 1857? What was provided in reference to bills of ex

State, should be payable on presentation without days of grace. It was also provided that all checks and bills of exchange, appearing on their face to have been drawn on any bank or individual banker, which were on their face payable on any specific day, or in any number of days after the date or sight thereof, should be due and payable on the day mentioned, without days of grace, and that it should not be necessary to protest the same for nonacceptance.

6. The note or bill must be presented, and payment demanded, on the day of maturity. This must be done within reasonable hours of the day. If payable at a bank, it must be presented during banking hours. If no place of payment be designated, demand may be made at the place of business or dwelling-house of the maker or acceptor. If the holder make presentation at an unseasonable hour, the presentment will be deemed a mere nullity, and without any legal effect, and the indorsers will be discharged from all liability thereon. When the note or bill is made payable at a particular place, it is not necessary for the holder to demand payment at that place, in order to maintain an action against the primary debtor on the note or bill. In an action against the maker or acceptor only, it is not necessary to allege in the complaint, nor to prove on the trial, any such presentment or demand. The omission is a matter of defence on the part of the maker or acceptor. If they had funds at the appointed

change payable at sight at any place in that State? What was provided in reference to checks and bills of exchange, appearing on their face to have been drawn on any bank or individual banker, payable on any specific day, or in any number of days after the date or sight thereof? For what shall it not be necessary to protest the same?

6. When must the note or bill be presented for payment? In what part of the day? If payable at a bank? If no place of payment be designated? If the holder make presentment at an unseasonable hour? How will it affect the indorsers? If made payable at a particular place? In an action against the maker or acceptor, what is not necessary to allege in the complaint? If such omission exists, who may take advantage of it? If the maker or acceptor had funds at the place of payment at the time, and the note or bill was not presented? From what will

place at the time, and the note or bill was not presented, they will still be liable to pay the amount of the note or bill; but they will be exonerated from the cost of the action. If the funds deposited by the maker or acceptor have been lost through the neglect of the holder, they will be exonerated from their liability to the extent of such loss.

7. If a note or bill be made payable at the People's Bank or at the Bank of America, the holder may present it at either bank; but he is not bound to present it at both. If made payable at the city of New York, and no particular place of presentment be specified, and the maker or acceptor does not reside in the city of New York, and has no place of business there, the holder is bound to make reasonable inquiry there; and if no one be found to pay the note or bill, it may be treated as dishonored, and the drawer and indorsers will be held. If the parties make a parol agreement that it shall be presented at a particular place for payment, presentment at that place will be sufficient to bind all the parties to such verbal agreement. Where a note or bill is payable generally, presentment may be made personally to the maker or acceptor, although he may not be at his residence or place of business. Presentment at the dwelling-house or place of business during reasonable hours, whether the maker or acceptor be there or not, is a sufficient presentment. The presentment may be made at either place; but need not be made at both. If the maker or acceptor change his residence or place of business after making the note or accepting the bill, presentment must be made

they be exonerated? If the funds deposited have been lost by the neglect of the holder to make the demand?

7. If the note or bill be made payable at the People's Bank or the Bank of America? If made payable in the city of New York, and no particular place of payment be specified, and the maker or acceptor does not reside in the city? If the parties make a parol agreement that it shall be presented at a particular place? Where the note or bill is payable generally? If presented at the place of business or domicile during reasonable hours, is it necessary that the maker or acceptor be within ?