14. Contract Implied By Endorsement

By indorsing a note a new party is introduced and the instrument is endowed with new qualities. The promisor becomes immediately liable to the indorsee, and the indorser undertakes to pay if the maker does not. Though the indorsement consists only of the indorser's name, or a direction to pay to the order of a specified person, the contract of the indorsement implies: first, that the instrument itself and the signatures thereon are genuine; second, that the indorser has a good title thereto; third, that he is competent to make a contract; fourth, that the maker is competent to bind himself to pay the instrument, and on due presentation of it will pay the same at maturity; and fifth, that if, when it is duly presented, it is not paid by the maker, the indorser will, on proper notice of its nonpayment, pay the same to the indorsee or other holder. An indorser's liability, therefore, is a conditional liability, and may be converted into an absolute liability, provided the maker does not pay, by taking the steps about to be described. The holder, or a notary public, or some other person authorized by the holder, must call on the maker at his residence or place of business and present the paper and demand payment, and should he fail to pay, give immediate notice to the indorser, or put the notice in the post office for transmission to him by the first mail, to the post office most convenient or nearest to his residence.

1 Rey V. Simpsons, 22 How. 211.

When, therefore, a note matures, and the maker fails to pay it, every indorser thereon, if properly notified of its non-payment, is liable to the holder for the amount. Suppose there are three of them; they can not say to the holder, "Sue the maker, and if you can not collect the amount of him, we will pay." It is their duty to pay the holder and sue the maker themselves. Furthermore, as the holder can look to the maker and all the indorsers for payment, so can the last or third indorsee look to the maker and the two indorsers before him for payment; in like manner the second indorser can look to the maker and the first indorser, while the first indorser can look only to the maker for payment.

15. Presentation Of Checks For Payment

In presenting checks for payment two rules must he observed : first, if the person who receives the check and the hank on which it is drawn are in the same place, the check must. in the absence of special circumstances, he presented the same day, or at latest, the day after, it is received. Second, if the person who receives the check and the hank on which it is drawn are in different places, in the absence of special circumstances the check must be forwarded for presentment, at the latest, on the day after it is received. An agent to whom it is forwarded in like manner must present it at the latest on the day after receiving it.

16. Presentation Of Notes And Bills Payable At A Fixed Date

In presenting notes and bills payable at a fixed date, they must he presented to the maker or acceptor, or in his absence to his clerk or agent, at maturity. An earlier demand is worthless.

A hill of exchange, payable at sight or on demand, must be presented within a reasonable time. Payment of a note or bill payable on demand may be demanded as soon as it is signed; but the condition on which the indorser is liable is that payment shall be demanded within a reasonable time, and the earliest notice possible be given of the maker or drawee's refusal. On one occasion an eminent judge remarked, concerning a bill payable on demand or .it sight, that it was impossible to fix any precise time; payment must be demanded and notice given as soon as these things can be conveniently done, taking into view all the circumstances of the holder and drawer.

A bill of exchange payable at anytime is payable immediately, and to charge the drawer or indorser it must be presented for payment in a reasonable time after receiving it. A delay of eight months, for example, is too long; and when the holder of a bill payable immediately has taken it from the payee, not in the usual course of business, but long after the reasonable and proper time for presentment, he is affected with notice of all the facts known by the payee at the time of the transfer.