some other reason; he may seek to avoid his debt. In any case, the fact of failure and refusal gives to the payee a "right of action" in the courts not only against the maker, but also against all "cosigners," "indorsers," and "guarantors," to compel them to make payment of the money promised and for which they became surety. To NEW YORK, 1921. You are hereby notified that a certain note made by in favor of... dated for $... and by you indorsed (or guaranteed), was this day presented to for payment and payment was refused. [Signed] FIG. 67. NOTICE OF NON-PAYMENT. Notice of non-payment.-The holder of a note which has been indorsed, or the payment of which has been guaranteed, must notify the indorser or guarantor if payment is not made when due. When one becomes surety for the fulfilment of another's credit contract, he is entitled to know of the non-payment in order that he may take steps to protect himself. If he receives no notice of non-payment he has a right to presume that the contract has been met and that he is released from the security. Above is shown the usual form of written notice sent. Waiver of demand and notice. This right to have demand made on the day that the note is due and to notice of non-payment, however, may be waived by indorsers and guarantors at the time the contract is entered into. "Callloan" notes and many of the "short-time" notes taken by banks very commonly have a clause in the instrument of this kind. The law simply protects the indorser in case he does not sign away his rights. When waiver is made the contract may be strictly enforced by a bona-fide holder. $500. LOGANSPORT, INDIANA, June 30, 1921. We, or either of us, promise to pay to the order of John Hartwell Bates, on July 30, 1921, the sum of Five Hundred Dollars, with interest at the rate of 6 per cent from date, for value received. And the cosigners and guarantors of the above note hereby severally and specifically waive all rights and exemptions that would accrue, for failure of the holder to present this note for payment when due, for notice of non-payment, notice of protest and of demand upon them for payments, in case this waiver and exemption had not been specifically made. LOUIS STRANGER. FIG. 68.-NOTE WITH WAIVER OF NOTICE ON NON-PAYMENT. Protest. An indorsed or guaranteed note which is presented for payment outside of the jurisdiction in which it is made, and is not paid, is usually protested; this is done to give formal evidence that the note was presented for payment and that payment was refused. Protest is a formal declaration made by a notary public into whose hands a note has been placed for official and formal presentation, together with a formal record of the fact by the notary. The notary usually attaches the certificate of protest to the note; he may also mark upon the face of the note the fact of its dishonor. When a note is sent to a bank or other agent for presentation and collection, the greatest precaution must be taken before protest; the bank or other agent should never have it put into the hands of a notary for official presentation and protest until it is made certain that the non-payment has not occurred $100000 Bethlehem, Pa., 1908 One Monde D days after date I promise to By Junery th Samuel Jol Pay to the orth of Saccal THE BEST NATIONAL BANK OF BETHLEHEM. Que Thousand in without defale ion for value received. له. Dollars, FIG. 69.-PROTESTED NOTE. through mistake; usually a messenger will be sent out with the note to the maker to make formal demand before turn PHILADELPHIA, July 17th 190/ MY Samuel Johnson. At the request of the Holder, The Centennial National Bank I, the undersigned, Notary Public for the Commonwealth of Penna. have this day protested a Note for $1000. dated Jane 17-1901. drawn by Alonzo Grey (the same being due, demanded and refused), and you as endorser, will be looked to for payment, of which you hereby have notice. Please notify the other parties D. S. LINDSAY, Real Estate Broker, No. 14 South Broad Street FIG. 70.-NOTARIAL NOTICE OF NON-PAYMENT. ing it over to a notary, even though the note is made payable at the bank. For self-protection, banks make it a rule to protest all paper received from another State for collec tion which is not paid when due, unless ordered not to do so by the owner; one wishing not to have protest made $1000000 | No. 14 South Broad Street, Rothschild Building. United States of America. (COPY) Bethlehem Pa June 17th 1901 One or outh after date I promise to pay to END. without defalcation for value received (Samuel Johnson 3.0 Address, Pittston, Penna BE IT KNOWN, That on the day of the date hereof, at the request of THE CENTENNIAL NAT. BANK, the holder of the original note of which a true copy is above written. I, the undersigned, Notary Public for the Commonwealth of Pennsylvania, by lawful authority duly commissioned by the Governor of Penna., and sworn, residing in the City of Philadelphia, during the usual hours of business for such purposes, caused the same to be presented at of Bethlehem The First National Bank and demand made for the payment thereof, which was refused and answer made "Not sufferent funds. " Whereupon, I, the said Notary, at the request aforesaid, have Protested, and do hereby solemnly Protest, against all persons and every party concerned therein, whether as Maker, Drawer, Drawee, Acceptor, Payer, Endorser, Guarantee, Surety, or otherwise howsoever against whom it is proper to protest, for all Exchange, Re-exchange, Costs, Damages and Interest suffered and to be suffered for want of payment thereof :-Of which demand and refusal I have duly notified the parties interested. notice by more to Samuel Johnso bymail SAY NOTARY Thus done and Protested at the City of Philadelphia, the day of July 1801 D.8. Lindsay. FIG. 71.-NOTARIAL CERTIFICATE OF PROTEST. Notary Pupfic. should instruct the bank to that effect. Such instructions are commonly attached to the left end of a note form, with the injunction that the instruction is to be clipped off before presentation. Notice of protest. It will be observed that the notice of protest is sent out by the notary public, to the maker of the note and to each of its indorsers and guarantors, making formal and official demand. The form of notice used in Pennsylvania is given on page 140. Advantages and disadvantages of using promissory notes. All forms of credit are contracts for the future delivery of money which have been "sold" or exchanged for something else of value. That which is received in exchange or "paid" for a credit contract is called the "consideration" or price. A promissory note, as a form of credit contract, has the advantage of being a formal agreement expressed in writing and signed by the party making it, as well as by the ones indorsing or guaranteeing it. It is therefore less likely to be disputed, and more likely to be complied with than is a simple verbal promise, for which there is no written evidence, or a memorandum of account made by the creditor and not signed by the promisor. Being a written agreement also, it may be protested; such public dishonor is likely to injure the credit of the maker and cause his future offers of credit to be less salable; on this account the maker will usually be more prompt. The disadvantages of a promissory note are found in the fact that delivery may not be enforced till the note is due. The only way that the holder can obtain funds on a note not due is to sell it again. When it does come due the maker of the contract may have sold everything that he owns and thus have defeated the enforcement of the contract. An open account, on the other hand, is due at any time. An overdue note (although dishonored) may be a better form of paper for the holder to obtain funds with than a note not due, because action for collection on an overdue note may be begun at once. But a note that |