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ance does not prejudice the rights of a holder in due course subsequent to the omission." (§ 188.)

$299. Form of Notice of Dishonor.

Notice of dishonor may be in writing or merely oral and may be given in any terms which sufficiently identify the instrument and indicate that it has been dishonored by nonacceptance or non-payment, as the case may be. The written. notice need not be signed and a written notice otherwise insufficient may be supplemented verbally and thereby validated. An erroneous description of the instrument does not vitiate the notice unless the party to whom the notice is given is in fact mislead thereby. (§§ 166, 167.)

The notice should be sufficiently clear to identify the instrument and should state with equal distinctness that the instrument has been dishonored. An instrument is sufficiently described if its maker, acceptor, if such there be, payee, date, amount and time of payment are stated.20

§ 300. How Notice of Dishonor is Given.

Notice may be given either by personal delivery or through the mails. (§ 167.) Under the common law it was well settled that if the parties to be notified resided in the same place as the party giving notice, their notice must be personal.21 The Negotiable Instruments Law, however, makes a notice by mail sufficient under any circumstancs. Also "where notice of dishonor is duly addressed and deposited in the postoffice, the sender is deemed to have given due notice, notwithstanding any miscarriage in the mails."22 (§ 176.) "Notice is deemed to have been deposited in the post-office when de

20 Bank of Cooperstown v. Woods, 28 N. Y. 545 (1864).

21 Sheldon v. Benham, 4 Hill. 129 (1843); Westfall v. Farwell, 13 Wis. 504 (1861).

22 Windham v. Norton, 22 Conn. 213 (1852); Shedd v. Brett, 18 Mass. 401 (1823).

posited in any branch post-office or in any letter box under the control of the post-office department.'

1923

(§ 177.)

§ 301. Time of Notice of Dishonor.

Notice may be given as soon as an instrument is dishonored, regardless of the fact that business hours of the day of maturity have not closed. (§ 173.)

If the person giving and the person receiving notice reside in the same place, notice, if at the latter's place of business, must be given before the close of business hours on the day following. If sent by mail, the notice must be deposited in the post-office in time to reach the party to be notified in usual course on the day following. (§ 174.) If service of notice is properly made, its failure to reach the party to be notified does not vitiate its effect.24

"Where the parties giving and to receive notice reside in different places, the notice must, if sent by mail, be deposited in the post-office in time to be forwarded the day following the day of dishonor or if there be no mail at a convenient hour on that day, by the next mail thereafter." If given otherwise than through the post-office it must be served so that notice will be received within the same time as if the notice had been mailed in accordance with the preceding provisions. (§ 175.) If the notice when mailed is not received in due time, the burden of proof is upon the plaintiff to show that it was mailed at the proper time. 25

"Where a party receives notice of dishonor he has, after receipt of such notice, the same time for giving notice to antecedent parties that the holder has after dishonor." (§ 178.) A delay in giving notice of dishonor, if it occurs through circumstances beyond the control of the holder and not due to his default, misconduct or negligence, is excused, provided notice

23 Johnson v. Brown, 154 Mass. 105 (1891).

24 Adams v. Wight, 14 Wis. 442 (1861).

25 Friend v. Wilkinson, 50 Va. 31 (1852).

is given with reasonable diligence as soon as the cause of delay ceases to operate. (§ 184.)

If an instrument is dishonored in the hands of an agent, he must, if he gives notice to his principal, do so within the same time as allowed the holder for notice, and the principal on receipt of such notice has a similar time in which to notify the parties to be held. (§ 165.)

$ 302.

Where Notice of Dishonor Must be Given.

If a party to a negotiable instrument adds an address to his signature, notice of dishonor must be sent to that address. Otherwise it may be sent to the post-office nearest to his place of residence or to the post-office where he is accustomed to receive his letters, or, if he lives in one place and has his place of business in another, notice may be sent to either place, or if he is journeying to another place, notice may be sent to such place. Where notice is actually received by the party within the time provided, it will be sufficient no matter by what means it is served. (§ 179.)

§ 303. Waiver of Notice of Dishonor.

Notice of dishonor may be waived either expressly or by implication and either verbally or in writing and either before the dishonor of the instrument or thereafter. (§ 180.) The waiver must, however, be unmistakable and with a knowledge of the facts.26

"Where the waiver is embodied in the instrument itself it is binding upon all parties, but where it is written above the signature of an endorser, it binds him only." (§ 181.)

A waiver of protest in the case of any negotiable instrument is also deemed to be a waiver of presentment and notice of dishonor. (§ 182.)

26 Jenkins v. White, 147 Pa. St. 303 (1892); Lockwood v. Crawford, 18 Conn. 360 (1847).

§ 304.

When Notice of Dishonor is Unnecessary.

"Notice of dishonor is dispensed with, after the exercise of reasonable diligence, it cannot be given to or does not reach the parties sought to be charged." (§ 183.)

Notice of dishonor is not required to be given to the drawer of a negotiable instrument if he is also the drawee, or if the drawee is a fictitious person or a person unable to contract, or where the drawer has no right to expect or require that the drawee or acceptor will honor the instrument, or where he himself is the person to whom the instrument is presented for payment, or in case he has countermanded payment. (§ 185.)

An endorser need not be notified of dishonor when the drawee is a fictitious person or unable to contract and the endorser was aware of the fact at the time he endorsed, or where the endorser is a person to whom the instrument is presented for payment, or where the instrument was made or accepted for his accommodation. (§ 186.)

Also "where due notice of dishonor by non-acceptance has been given, notice of subsequent dishonor by non-payment is not necessary unless in the meantime the instrument has been accepted." (§ 187.)

(3) PAYMENT AND DISCHARGE.

305. Payment in Due Course.

Payment made in good faith by the party primarily liable on or after maturity of the instrument to the holder thereof, made without notice or knowledge of any defect in the title of such holder, is payment in due course and discharges the instrument and all the parties liable thereon. (§ 148.)

The instrument when paid must be delivered up to the party by whom it is paid. (§ 134.) Any collateral securing a note must be delivered up with the note when payment is made. It is the duty of the party paying the instrument to

take it up when paid, and if he does not but accepts a receipt in lieu thereof and the instrument turns up later in the hands of a holder in due course, the first payment is ineffectual and he must pay it again.27

$306. Discharge of Instrument.

A negotiable instrument is discharged by payment in due course by or on behalf of the principal debtor, or in the case of accommodation paper, on payment by the party accommodated. It is likewise discharged by the intentional cancellation thereof by the holder, and also when the principal debtor becomes a holder of the instrument in his own right at maturity or thereafter, or by any other act which will discharge a simple contract for the payment of money. (§ 200.)

Payment by an endorser does not discharge the maker but the release of one joint maker will operate to discharge the other joint maker provided the release be under seal; if unsealed it has not that effect.28

§ 307. Discharge of Persons Primarily Liable.

The maker or acceptor of a negotiable instrument is discharged by the discharge of the instrument.

§ 308. Discharge of Persons Secondarily Liable.

A person secondarily liable upon a negotiable instrument is discharged, (1) by the discharge of the instrument; (2) by the intentional cancellation of his signature by the holder; (3) by the discharge of a prior party; (4) by a valid tender of payment made by a prior party; (5) by a release of the maker or acceptor, unless the holder's right of recourse against the parties secondarily liable is expressly reserved; (6) by any agreement, binding upon the holder, to extend the time of

27 Adams v. Lenox, 15 Ore. 489 (1887); Wheeler v. Guild, 37 Mass. 545 (1838). 28 Crawford v. Roberts, 8 Ore. 324 (1880); Shaw v. Pratt, 39 Mass. 305 (1839).

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