bearer," it would give to Charles Woods, or whosoever might obtain legal possession of the note, the full title to it.

The note would then be negotiable by mere delivery.

(g.) If it had been, "Pay to Charles Woods only," it would give to Charles Woods the full title to the note, but would prevent his transferring it to any one else.

(h.) If George Smith had simply written his name on the back of the note, it would have been an indorsement equivalent to, "Pay to the bearer," and would make the note negotiable by mere delivery. Such an indorsement is called an INDORSEMENT IN BLANK, and is the form most frequently used.

(i.) By either of the foregoing forms of indorsement, George Smith would not only authorize some one else to collect the note, but he would make himself responsible for several important points. He would guaranty,

First. That the note is genuine, and just what it purports to be.

Second. That he has legal possession of it, and a right to transfer it. Third. That it shall be paid if payment is demanded by presenting the note to the signer at the proper time.

Fourth. That if not so paid, he will pay it himself, if properly

notified.

If he does not wish to guaranty the last two points, he writes the words "without recourse " before his name. The indorsement in this form is a guaranty of the first two points, but not of the last two.

(j.) Any person may write his name as a special indorser on a note which he does not own. Such an indorsement would not affect the negotiability of a note, but it would make the indorser responsible for its payment, in case the maker should not pay it. Indeed, it might impose upon him all the obligations with regard to the note, which rest upon the original maker.

(k.) A person who indorses a note under any circumstances incurs all the obligations of such an indorsement, even though he may be ignorant of them at the time.*

(.) If a note is indorsed by several persons, each of them makes himself responsible for these points to whoever may afterwards get legal possession of it.

(m.) A person to whom an indorsed note is transferred, by the mere act of receiving it, agrees with all the indorsers, except the special ones, and under some circumstances with them,

*Many a man has been reduced from affluence to poverty, by merely writing his name on the back of a note "just to accommodate a friend."

First. That payment shall be demanded of the signer within a reasonable time, if the note is payable on demand; and on the very day it becomes due, if it be on time.

Second. That he will not consent to any delay in the time of pay

ment.

Third. That if the note is dishonored he will at once get it protested, (see (u.) (v.) p. 269,) or, on that day or the next, inform the indorser that it is dishonored, and notify him that he will be held responsible for its payment. This information should be given by telling him personally, or by leaving a letter at his place of business or dwelling, or by mailing one to his address.

(n.) If the holder of a note fails to comply with any one of these conditions, he releases every indorser except the special ones, and sometimes even them, from all obligation to pay it; but he does not in any way affect the obligation of the original promisor.

(o.) The question, What is a reasonable time in the case of a note payable on demand? must depend for its answer somewhat on circum

stances.

In Massachusetts, the indorser of a note payable on demand is by statute excused, if payment be not demanded within sixty days from the date of the note.

(p.) If no particular place for payment is specified in the note, it may be presented at the signer's counting house or place of business, in business hours, or at his dwelling house, at a time when he may reasonably be supposed to be at home, and not to have gone to bed.

(q.) If it is payable at some specified place, as at a bank or at some counting room, the demand must be made at that place. In case the promisor does not appear there to pay the note on the day it falls due, it is dishonored, and notice should be sent to the indorsers, as though payment had been demanded and refused.

(r.) When there are several indorsers to the note, notice that it is dishonored should be sent to each whom the possessor of the note wishes to hold responsible for its payment. He may collect the money of either, or, if he resorts to legal measures, may commence suits against any of them, or against all at once. When, however, he collects the money of any one, his demands against the others are void.

(s.) Each indorser may require any one whose name precedes his own to make good to him the loss he may sustain on account of the note, provided he gives notice of his intention to do so the day that he receives his own notice, or the day after.

For instance, suppose that the foregoing note comes to me indorsed by George Smith, Charles Woods, Silas Bacon, and Edward Jones, and that it is dishonored. I shall immediately inform Smith, Woods, Bacon,

and Jones of the fact, and tell each that I shall look to him for payment. Jones will on the same day, or day after receiving the notice, inform Smith, Woods, and Bacon of it, and also that he expects them to make good to him any money he may have to pay on account of it. Bacon would write a similar letter to Smith and Woods, and Woods would write one to Smith; and if Smith should be obliged to pay it, he could hold only the signer of the note responsible.

(t.) A PROTEST is a formal declaration, made by an officer called a Notary Public, that a note is dishonored, and that the indorser will be held responsible for it.

(u.) The common method of protesting a note is for the holder to take it to a notary public, and get him to demand payment of the promisor. If the demand be refused, the notary makes out a protest, i. e., he writes (usually on a copy of the note) a formal declaration that it is dishonored, and sends a copy of it to each indorser. The protest should be made out on the very day the note is due; otherwise it has no value.

(v.) Although a notice sent by the holder of the note is usually regarded as sufficient to make the indorsers liable for its payment, it is a safer course to have a formal protest made out.

184. Joint and Several Notes.

(a.) Notes are sometimes signed by more than one person. If the note is so worded as to show that the signers are together responsible for its payment, it is a "joint note;" but if so worded as to show that the signers together and separately are responsible for its payment, it is a "joint and several note."

(b.) There seems to be but little difference between a joint note and a joint and several note, as far as regards the liabilities of the promisors. Any signer to either may be compelled to pay its whole amount. The chief difference between them is, that an action commenced to enforce payment of a joint note must be commenced against all the promisors jointly, while an action commenced to enforce payment of a joint and several note may be commenced against them jointly or individually. (c.) If judgment is given in favor of the holder of a joint note, he may compel either promisor to pay its full amount, as much as if it had been a joint and several note. One who is thus compelled to pay the amount of the note may recover from each of the other promisors the share which each ought justly to pay. In a joint and several note, or a several note, he may or may not recover from the other promisors, ac cording to the circumstances under which the note was given.

(d.) The above is a joint note, because it is the promise of Sprague and Hale to pay jointly, or together, a specified sum of money.

(e.) The holder of the note may demand payment of either Sprague or Hale; but if he wishes to hold any indorser or indorsers responsible, he must demand payment of both. If he commences an action on ac count of it, he must commence it against both jointly.

(f) When a note is signed by one person as principal, and another as surety, the holder of it may demand payment of, and commence action against, the surety instead of the principal, if for any reason he chooses so to do.

185. Renewal of Notes.

(a.) If the holder of a note allows it to run for six years without collecting any thing on it, or otherwise getting it renewed, it becomes outlawed, and he cannot afterwards compel the promisor to pay it.

(b.) A note under seal, and in some states (as Massachusetts and Connecticut) an attested note, is not outlawed under twenty years.

(c.) Any act by which the promisor acknowledges the validity of a note renews it. Care should be taken to have the renewal made in the presence of witnesses, or to have evidence of it in the handwriting of the promisor. For instance,

(d.) When a part of the money due on a note is paid, a receipt for it should be written on the note. Such a receipt is called an indorsement. Thus, if twelve dollars be received on some note, the following would be written: "Jan. 1, 1855, received twelve dollars." This indorsement should be written by the one who pays the money, as it is equivalent to a renewal of the note, and it may afterwards be important for the holder to prove that the money was really paid at that time on account of the note.

$500.

186. Exercises.

Boston, May 1, 1855.

Ninety days after date, I promise to pay

James Drew, or order, five hundred dollars.

ceived.

Value re

Samuel Johnson.

Who is the maker of the above note? To whom does he promise to pay it? Who shall take possession of the note? Can he transfer it? If so, how? What form of indorsement would be used if he wished to transfer it to Francis Baker, or his order? To Francis Baker only? To Francis Baker, or whoever should have possession of it? To whoever should have possession of it without naming any person? How should it be indorsed in each of the above cases, if the indorser does not wish to make himself responsible for its payment? Is it on interest? On what month, and what day of the month, will the note become due? If this note should be indorsed first by James Drew, then by Francis Baker, and then by William Davis, and then Charles Morton should come into legal possession of it, of whom and when ought he to demand payment? If payment is refused, what ought he to do? What ought each indorser to do on receiving notice that the note is dishonored? Who should take possession of it when it is finally paid? What disposition should be made of it? What effect would it have on the negotiability of the above note, if the words "or order" were omitted? What if the words "or bearer" were substituted?

(1.)

$500.

Providence, Feb. 1, 1855.

On demand, with interest after three months, I

promise to pay to the order of Henry Gray five hundred

dollars. Value received.

Attest, John Clapp.

Alfred Baker.