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made to any one of them, even though there has been a dissolution of the
firm.
Each partner is an agent of the partnership or his co-partners and is
presumed to have authority to act for the others. A dishonor by one is a
dishonor by all.
The same rule applies even though there has been a dissolution of the
partnership. This if a partner dies before maturity of a partnership note, a
demand on the surviving partner will be sufficient.
Sec. 78. Presentment to joint debtors.
Where there are several persons, not partners, primarily liable on the
instrument, and no place of payment is specified, presentment must be
made to all of them.
If the parties primarily liable are not partners, their liability is only joint.
Sec. 79. When presentment not required to charge the drawer.
Presentment for payment is not required in order to charge the drawer
where he has no right to expect or require that the drawee or acceptor will
pay the instrument.
If the person to make payment has no funds in the bank to meet the
payment any time during the day, presentment at any hour before the bank
is closed is sufficient to hold persons secondarily liable. The reason is that
even if presentment was made during banking hours, the instrument could
not have been paid just the same.
But presentment may be dispensed with if, with the exercise of reasonable
diligence, no personal representative can be found. However, the holder is
not excused from giving notice of dishonor to the indorser, if he wishes to
hold the latter liable on the instrument.
*The reason for the rule is that the accommodated payee-indorser is the real
debtor and not the maker or acceptor. Hence, he is not discharged even if no
presentment for payment is made to the maker or acceptor who, in
substance, is a surety for the debt.
Circumstances beyond the control of the holder are events which could not
be foreseen, or which, though foreseen, are inevitable.
The burden of proving due notice or that notice was waived or excused is on
the holder.
The loss of the note does not excuse compliance with Section 89.
Each indorser and any indorser include any kind of indorser. Hence, an
accommodation indorser is entitled to notice, and also an irregular indorser,
being likewise an indorser. The holder of a check is entitled to an unqualified
notice of dishonor by the drawee before he is required, in order to hold an
indorser liable, to notify him that payment has been refused.
The general rule enunciated in section 89 is not applicable in the cases
mentioned under sections 109, 111, 112, 114, 115, 116, and 117.
The maker or acceptor do not have to be notified because they are the very
ones who dishonored the instrument.
Sec. 90. By whom given.
Under this section, the notice may be given:
1. By the holder; or
2. Another in behalf of the holder; or
3. By a party to the instrument who may be compelled to pay it to the
holder and who, upon taking it up, would have a right to
reimbursement from the party to whom the notice is given; or
4. Another person in behalf of such party.
So, notice by a mere stranger is ineffectual, unless he is acting as agent of a
party who is entitled to give notice of dishonor. It has been held that the
drawee who refuses to accept is not a party or chargeable on the bill, and
notice from him of non-acceptance is no degree better than from any other
stranger.
Example:
M makes a note payable to the order of P. The note is indorsed successively
by P to A, by A to B, by B to C, and by C to D, the present holder. Suppose
the note is dishonored in the hands of D.
D or his agent may give notice of dishonor to P, A, B, and C, the parties
secondarily liable.
If D notifies only C, the latter, who thereby can be compelled by D to pay,
may, in turn, notify P, A, ad B.
B may give notice to A and P whom he can hold liable. Likewise, A may give
notice to P. But A cannot give notice to B because A is the one liable to B who
is a subsequent party, and, therefore, A has no right to reimbursement from
B. For the same reason, P would have no right to notify A.
If D gives notice only to B, the effect is to discharge C due to lack of notice
since B would have no right to notify C.
If B, after having been given notice by D, does not choose to notify P and A,
then the latter would also be discharged from the instrument.
Upon his discharge, C becomes a total stranger and as such, he is not
entitled to give notice, unless he is acting as an agent of a party who can
give proper notice of dishonor.
Sec. 91. Notice given by agent.
Notice of dishonor may be given by an agent either in his own name or in the
name of any party entitled to give notice, whether that party be his principal
or not.
The agent need not be authorized by the principal to give the notice. Under
this section, any person can be an agent of any party entitled to give notice.
Sec. 92. Effect of notice on behalf of holder.
Where notice is given by or on behalf of the holder, it inures to the benefit of
(1) all subsequent holders and (2) all prior parties who have a right of
recourse against the party to whom it is given.
Notice of dishonor given by or on behalf of the holder inures to the benefit
of:
1. All holders subsequent to the holder who was given notice; and
2. All parties prior to the holder but subsequent to the party whom
notice has been given and against him whom they have a right of
recourse.
Example:
M makes a note payable to P or order. The following are the indorsers of the
note in the order of their indorsements.
P
A
B
C
D Holder
E subsequent holder
2.
3.
Sec. 118. When protest need not be made; when must be made.