This section is from the book "Manual Of Canadian Banking", by H. M. P. Eckardt. Also available from Amazon: Manual of Canadian Banking.
To hold them liable the bank must either have them formally notified on the 10th after the close of business that the bill is unpaid, and that it looks to them for payment, or it must get them to formally waive or forego their right to this notification. As there might be disputes between the bank and endorsers with regard to whether notice was duly sent by the one or received by the other, the law has prescribed a certain form of proceeding, which, on its being taken by the bank at the proper time, effectually binds all endorsers.
When this form of proceeding is applied to a bill it is called protesting the bill. After the close of business on the day of maturity the dishonored or unpaid bill is handed to a notary public. He makes formal presentation of it at the place where it is payable, and if it is not then paid he fills up forms of notification and mails one to every signer and endorser in the manner prescribed by the law. This done, the endorsers are held liable after the maturity of the bill, no matter whether they receive the notices or not.
Another course may sometimes be followed. The bank may get the endorser or endorsers to waive protest. In that case each endorser signs a declaration, usually written on the back of the note, announcing that he waives his right to notification and protest. On his signing this, his liability continues after maturity. After maturity, whether a bill has been protested or whether protest has been waived, all the parties become primary debtors. The bank may take action against any or all of them.
For a customer to allow paper bearing his name to go into past due bills is to have his credit injured. Also the branch manager's reputation with his head office is affected. The head office understands quite well that customers in good credit sometimes figure in the past due bill account through their overlooking or forgetting about certain of their bills. But it is regarded as a bad sign when it happens repeatedly.
Bills going into past due bills sometimes constitute a reflection on the manager that discounted them inasmuch as the occurrences may indicate that his judgment was at fault when he accepted them for discount. Therefore, every effort is made to get overdue bills cleared out. The parties are frequently reminded of them and are constantly watched. Sometimes suit has to be undertaken.
A special record must be made of all past due bills in a book kept for the purpose. All particulars as to what has been done and prospects of payment must be carefully preserved. The head office requires full statements of particulars; and, as the manager does not allow the debtors to forget the debt, so the head office does not allow the manager to forget. Altogether, the past due bill department can be characterized as the most disagreeable of all banking departments. Happy is the branch manager who so conducts his affairs as to have a minimum of these debts.
 
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