If a man has a claim against you and you have also a claim against him, you call your claim a set-off', that is something to set or cancel off part or all of his claim. Under ordinary conditions it is impossible to have a set-off against a note not in the hands of the original payee.

Notice of Non-payment of a Note.

If the note has been discounted or is in a bank for collection, the bank will send notice to the indorsers to the effect that the note has been presented for payment and payment was refused. If the note is in the holder's hands and payment, upon presentation, has been refused, the holder should immediately send a written notice to the indorser, if any, stating that a certain note made by---------, for ---------, in favor of ---------dated ---------, and "by you indorsed" was "this day presented to--------for payment, and payment was refused." Such notice may be sent by mail.