Story Case

A note, dated January 23, payable thirty days after date, was indorsed by the payee, Henry West, to Andrew Hollingsworth. The thirty days expired on February 22, which in that year came on Saturday. Hollingsworth knew that he could not demand payment on Washington's birthday, a holiday, or on Sunday which followed it. It seemed best to him to be a little early rather than wait two days, until Monday, February 24, and he, accordingly, presented the note for payment on Friday, February 21. The maker so positively refused to pay it or to make any attempt to meet it that Hol-lingsworth felt satisfied that any further presentment to him would be futile. He sent notice at once to "West of the dishonor of the note. When he later insisted of West that he pay the note, according to his indorsement of it, he was met with the reply that West considered himself wholly discharged from liability by reason of the absence of presentment and notice on the February 24. Hollingsworth, realizing that his continued demands for payment were not producing results, started suit, contending that his presentment on Friday served all the purposes that could possibly be filled by a presentment on Monday, and that the attitude of the maker on Friday showed plainly that a second presentment on Monday would be useless.

Is Hollingsworth entitled to recover from West, or is the defense made a valid one?

Ruling Court Case. Edgar Vs. Greer, Volume 8 Iowa Reports, Page 394. Volume 74 American Decisions, Page 316

This was an action on a promissory note, brought by Edgar, the indorsee, against Greer, an indorser. The note was dated June 16, and was due in three months. Edgar presented the note to the maker on September 17, and demanded payment; it was refused. He then gave notice of such refusal to Greer, the indorser. Greer refused to pay it, and this action was brought thereupon.

Greer contended that the note was prematurely presented, because the three days of grace, to which the maker was entitled, had not expired. He insisted that he was not liable for the reason given.

Mr. Chief Justice Wright said: "In order to charge a party of secondary liability, the instrument must be presented to the party of primary liability upon the very day it is payable, if possible. Accordingly, presentment of an instrument for payment before the last day of grace, as in this case, is premature, as the instrument is not due until then. When such is the case, persons of secondary liability are discharged." Judgment was given for Greer.

Ruling Law. Story Case Answer

When an instrument is made payable on a day certain, it is obvious that presentment for payment must be made on that very day. Presentment a day later is to hold the indorser, if payment by the party primarily liable is refused. In the Court Case of Edgar vs Greer, the instrument was payable on September 16, but the instrument was entitled to days of grace; before the days of grace had elapsed, presentment for payment was made; this was premature, and since no presentment was again made on the proper day, the indorser was discharged.

It is immaterial that in all probability a demand for payment on the proper day would not have changed the situation. This is not a question of reasonable protection, but is a fixed and definite rule of law, with equally fixed and definite exceptions and excuses. If the day of maturity is a holiday, or a Sunday, presentment must be made on the following day. This means that Hollingsworth was bound to present the note on Monday. His belief, or even the fact, as to the intention of the maker to pay it or not to pay it cannot be considered. The indorser is liable, only on the condition implied by the Law Merchant. A presentment on any other day is not the same as a presentment on Monday February 24, and since he can not show such a presentment, Hollingsworth has lost all right of recourse upon the indorsement. West is discharged, and should be given judgment.