ject to the provisions of this act, when the instrument is dishonored by non-payment, an immediate right of recourse to all parties secondarily liable thereon accrues to the holder.

1170. When an instrument matures.

Section 85. [TIME OF MATURITY.] Every negotiable instrument is payable at the time fixed therein without grace. When the day of maturity falls upon Sunday, or a holiday, the instrument is payable on the next succeeding business day. Instruments falling due [or becoming payable] on Saturday are to be presented for payment on the next succeeding business day, except that instruments payable on demand may, at the option of the holder, be presented for payment before twelve o'clock noon on Saturday when that entire day is not a holiday.5

Section 86. [TIME; HOW COMPUTED.] Where the instrument is payable at a fixed period after date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run, and by including the date of payment."

§ 1171. Date of maturity important for three questions.

At this point it is desirable to state more fully when an instrument is overdue. That is necessary for several purposes, and unfortunately under the Common Law an instru

5 The words in brackets [or becoming payable] have been inserted for the sake of clearness. They are found in the Florida, Indiana, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Utah, Virginia, and Washington Acts. This section having twice used the word "payable" then uses the words "falling due." This has raised doubts in the minds of some as to the rule if Friday is a legal holiday and an instrument matures on that day. These words were inserted to

remove any possible doubt, though they seem unnecessary. Sight drafts are excepted from abolition of days of grace in Massachusetts, North Carolina and New Hampshire. The provision of the section in regard to Saturday is omitted in Arizona, Kentucky, Vermont and Wisconsin. The section is further amended in Iowa and Massachusetts. See for a discussion of this section, 23 Harv. L. Rev. 603; 26 id., 592.

6 A note dated Nov. 8, 1908, payable in twelve months must be presented on Nov. 8, 1909. Lewy v. Wilkinson, 135 La. 105, 64 So. 1003.

ment may not be overdue for all these purposes at the same moment. The first question is-When can the holder sue the party primarily liable? The second question isWhen can the holder give effective notice of dishonor to parties secondarily liable that the instrument has been dishonored at maturity? The third question is After what moment does the instrument become subject to personal defences when purchased even by a bona fide purchaser for value.

§ 1172. In Europe an instrument is overdue for all purposes

at the same time.

Under the practice which prevails on the continent of Europe, of presentment by a notary who marks on the face of a bill the fact of its dishonor or of its payment on presentment, the difficulties that beset our law in regard to this matter do not occur. The answers to each of these three questions there will always be the same. As soon as there is a right of action against the maker then will always be the time to give notice, and thereafter the instrument will always pass subject to equities; and this time will be the moment on the day of maturity when the notary has thus indicated that the instrument is dishonored.

§ 1173. When right of action accrues in the United States. It is the rule in simple contracts that when a man contracts to do something on a given day he has until the last minute of that day to satisfy his obligation. That is true both of contracts to pay money and of contracts to do other things." If, therefore, by a simple contract one agrees to pay $1,000 on the 2d of January, he cannot be sued on that obligation until after the last minute of the 2d of January has expired, for until that last minute it is possible he may fulfill his contract. The result is that a right of action will not accrue until the 3d of January. That principle, unfortunately, has been applied rather generally to negotiable instruments. If a note is by its terms payable on the 2d of January the gen

7 Webb v. Fairmaner, 3 M. & W. 473, supra, § 857.

eral rule is that no action can be begun against the parties to it until the 3d of January.8

This is probably contrary to the theory and customs of bankers and merchants. Their theory is that the maker of the instrument agrees that he will pay it on presentment on the 2d of January, that the maker is not entitled to the last minute of the day, that he must be ready at the beginning of the business day, and that at whatever hour on that day the holder presents that instrument he is entitled to receive payment. The law in some States has to some extent recognized this custom. If there is an actual presentment and dishonor on the 2d of January a right of action against the maker it is held arises immediately in favor of the holder."

But it is law generally, in these States as well as elsewhere, that if presentment is not made on the 2d of January (and under the Negotiable Instruments Law there is no necessity of presentment except to charge the indorsers, and therefore a note without indorsers need not be presented) the maker is not liable to suit until the 3d of January; 10 unless the instrument is payable at a bank. In that event it has been held logically enough by some courts that as the maker could only comply with his promise during banking hours, a suit brought on the day of maturity after banking hours, was not premature." Even in such a case the general rule allowing the maker the full day of maturity is supported by other courts. 12

8 Kennedy v. Thomas, [1894] 2 Q. B. 759. And see cases in the following notes, and supra, § 857.

9 Leftley v. Mills, 4 T. R. 170; Heise v. Bumpass, 40 Ark. 545; Veazie Bank v. Winn, 40 Me. 62; Staples v. Franklin Bank, 1 Met. 43, 35 Am. Dec. 345; McKenzie v. Durant, 9 Rich. 61; Coleman v. Ewing, 4 Humph. 241. But even in such a case some courts hold that no right of action arises until January 3. Sutcliffe v. Humphreys, 58 N. J. L. 42, 32 Atl. 706; Oothout v. Ballard, 41 Barb. 33. Under Sec., 66 of the Act, the indorser, it is said, engages that the maker shall pay on presentment. It seems possible, therefore, that a right of action should

accrue against the indorser on the day of maturity if he is notified promptly. It would be odd if there should be a right of action against the indorser before there is against the maker.

10 Benson v. Adams, 69 Ind. 353, 35 Am. Rep. 220; Sturz v. Fisher, 38 N. Y. App. Div. 457, 459, 56 N. Y. S. 479; Hardon v. Dixon, 77 N. Y. App. Div. 241, 78 N. Y. S. 1061.

11 Sabin v. Burke, 4 Ida. 28, 37 Pac. 352; Exchange Bank v. Bank of North America, 132 Mass. 147, 148; Humphreys v. Sutcliffe, 192 Pa. 336, 43 Atl. 954, 73 Am. St. Rep. 819; Citizens Bank v. Lay, 80 Va. 436, 440.

12 Benson v. Adams, 69 Ind. 353, 35 Am. Rep. 220; Sutcliffe v. Humphreys,

The day of maturity is also affected by Sundays and holidays. If the day of maturity falls on Sunday or a holiday, the instrument is not payable until the next business day, and time instruments payable on Saturday must also be presented on the next business day in order to charge secondary parties.13 $1174. When an instrument is overdue for other purposes.

The second inquiry is this: When is an instrument overdue for the purpose of charging indorsers? For that purpose it is everywhere overdue as soon as it is presented and dishonored on the day of maturity (Sections 71, 83, 102), and the third inquiry is, when is it overdue for the purpose of letting in equities against a purchaser for value of the instrument? Everywhere but in Massachusetts, so far as it has been decided, the instrument is overdue for this purpose only on the day after that on which it falls due, that is, on the 3d of January, in the case above supposed.14

A purchaser on the 2d of January, unless he had notice that the instrument had been presented and dishonored, would be a holder in due course. In Massachusetts, however, one who purchases on the 2d of January is not a holder in due course, 15 unless Section 52 of the Negotiable Instruments Law has changed the law previously existing in that State.

§ 1175. When right of action accrues on demand paper.

A more troublesome question than that concerning the day of maturity of time paper is the day of maturity of demand paper, and here again the distinction must be made clear between these several questions of when a right of action arises, when the instrument is subject to equities, and when notice may be given to indorsers. On demand paper a right of action against the maker arises immediately as soon as it is delivered. By the terms of the paper it might be supposed

58 N. J. L. 42, 32 Atl. 706; Smith v. Aylesworth, 40 Barb. 104; Taylor v. Jacoby, 2 Pa. St. 495, 45 Am. Dec. 615.

13 See supra, § 1170.

14 Savings Bank v. Bates, 8 Conn.

505; Walter v. Kirk, 14 Ill. 55; Goodpaster v. Voris, 8 Ia. 334, 74 Am. Dec. 313; Fox v. Bank of Kansas City, 30 Kan. 441, 1 Pac. 789; Crosby v. Grant, 36 N. H. 273.

15 Pine v. Smith, 11 Gray, 38.

that demand was a prerequisite to such a right of action, and on theory it ought to be, but, as has been said, 16 in the United States and in England it is not.17

§ 1176. Maturity of demand paper to charge indorsers.

The holder may make a demand on the maker within a reasonable time after the issue of the instrument for the purpose of charging indorsers, the instrument maturing at any time within that limit at which the holder wishes to present it. (Section 71 of the Act). That is, he may demand payment at once of the party primarily liable, and on his refusal to pay and notice to the indorser, he will acquire a right of action against the latter (Section 66), or he may defer demand until a reasonable time has nearly elapsed. The limit of time within which a purchaser of the instrument can acquire a title free of equitable defences is the same at common law, 18 and remains the same under the statute unless Section 53 and the last clause of Section 71 when taken together produce a different result. 19

A check negotiated the day after its issue is certainly negotiated within a reasonable time, 20 and if a holiday intervenes, this will not make the following day unreasonable.21 A cashier's check not negotiated until five days after its issue was held negotiated within a reasonable time.22 The rule

16 Supra, § 1164.

17 Norton v. Ellam, 2 M. & W. 461; Hunter v. Wood, 54 Ala. 71; Bell v. Sackett, 38 Cal. 407; Fankboner v. Fankboner, 20 Ind. 62; Burnham v. Allen, 1 Gray, 496; Farmers' Nat. Bank v. Venner, 192 Mass. 531, 78 N. E. 540; Wheeler v. Warner, 47 N. Y. 519, 7 Am. Rep. 478; Hyman v. Doyle, 53 N. Y. Misc. 597, 103 N. Y. S. 778; Shuman v. Citizens' Bank, 27 N. Dak. 599, 147 N. W. 388, L. R. A. 1915 A. 728; Union Central Life Ins. Co. v. Curtis, 35 Ohio St. 357; Dominion Trust Co. v. Hildner, 243 Pa. 253, 90 Atl. 69; Dawley v. Wheeler, 52 Vt. 574. In Hebblethwaite v. Flint, 185 N. Y. App. D. 249, 173 N. Y. S. 81, the court stated that if a demand note was non

negotiable it must be presented to charge the maker; but the common-law rule that promises to pay on demand are payable without a demand does not depend upon negotiability. See infra, § 1289.

18 In Massachusetts prior to the passage of the Negotiable Instruments Law, a statutory rule subjected all demand notes to personal defences whenever transferred.

19 See supra, § 1165.

20 Matlock v. Scheuerman, 51 Or. 49, 93 Pac. 823, 17 L. R. A. (N. S.) 747.

21 Asbury v. Taube, 151 Ky. 142, 151 S. W. 372.

22 Singer Mfg. Co. v. Summers, 143 N. C. 102, 55 S. E. 522.