Place of Presentment for Acceptance or Payment If the paper names a place of payment, presentment for payment must be made at the place designated. If several places are named, the presenter may elect the place. When no place of payment is named, presentment at the place of date is sufficient demand to charge the drawer or acceptor after notice of protest. When a bill or note made payable at a bank is present there, with the knowledge of the bank and ready to be delivered upon payment, such mere presence is a sufficient de mand. Banks in certain places have a custom of sending notices by mail to the payer a little before maturity, requesting him to come and pay at maturity; if the bill is payable at the bank, such mail notice (or no notice at all) is sufficient; if the bill is not pay able at the bank, such mail notice is held a proper presentment in some states but not in others; if it is the prevalent practice among the banks of the place and not simply the practice of a particular bank there, the usage would in principle bind persons of the place, provided the paper is payable in that place.
Person to Whom Presentment for Acceptance or Payment Is Made Presentment for payment must be made to the person who is to pay or to his authorized agent; if he is absent or inaccessible and has authorized no agent, presentment to his clerk, wife, or other person found at the place is sufficient. If joint promisors are partners, presentment to any one is sufficient; otherwise it is necessary to present to each and every promisor.
Protest • Where a bank, acting as collection agent, holds an indorsed check or draft, payment or acceptance of which has been refused, it is its duty, unless otherwise instructed, to have it protested. In this matter the bank uses its discretion; items are customarily not sent to protest if deposited and indorsed by its customers, since the bank wishes to save the customer from the expense of protest fees; but those sent from a distance for collection are protested unless there are instructions to the contrary. The bank also takes care to give payers every opportunity to save their paper from protest and protect their good names and credit, in this way gaining the favor of its customers. The purpose of protest is to bind the maker and indorser and secure reliable evidence of dishonor. The item is turned over to a notary who personally makes demand again and gets a refusal to accept or pay. The notary certifies that he had presented the document at such a place on such a date and that acceptance or payment was refused, for such a reason, or for no given reason, and makes a formal and solemn protest under his seal and signature. On that day or the next he gives notice of the facts to all indorsers in person or by mail. He then returns the item under protest to the bank. The bank returns it, with the certificate of protest, to the bank from which it came, and this bank in turn returns it to the de positor, who is charged with the protest fees, postage, and other charges incurred by the collecting bank and its agent.
The notice of protest consists of a statement sent by the holder to the maker or any indorser of a check, draft, acceptance, bill, or negotiable note, that the paper has been dishonored and that the person notified is looked to for payment. The notice may be
verbal or written and may be sent by messenger in all cases and by mail if the person notified resides elsewhere. It is not conclusively determined yet in the courts whether the bank is obligated to give notice of dishonor only to its principal, that is, the party from whom it received the paper for collection, or to the makers and all indorsers thereon, but it is safe to assume that notification to the principal is sufficient to acquit the bank. This may be varied by special agreement; for instance, the depositing bank may by ex press agreement waive its right to demand of payment and no tice of non-payment, or it may require notice to be given to all the parties, or to any particular party, on the paper.
Acceptable Tender Except by special agreement or prevailing usage, a bank has no right to accept anything but money in payment of paper it holds for collection. If the bank accepts a check by the drawee upon funds in the bank to his credit and the bank charges it off the account of the drawee, it is equivalent to the receipt of money. If it takes a check on another bank, it becomes ipso facto agent of the maker in collecting the check and has not completed its duty as agent of the customer until it has collected this check and is liable for any default in connection with it. Even if the check is certified and if it is customary to accept certified checks in pay ment of collections, the courts have not universally agreed that the usage justifies the taking of other things than money.
Drafts and bills payable are sometimes drawn payable "with exchange," "in exchange;" "in New York exchange," "in New York funds "—expressions which signify that the paper is to bear the exchange charges, the payer either remitting in par funds or paying the collecting agent enough extra to cover the exchange charges. The courts have decided that the insertion of these phrases does not render the instrument non-negotiable on the score of indefinite amount. Unless there are special instructions to insist upon collecting the exchange, the collecting bank gener ally ignores it. But when the bill is drawn "in New York ex change," the collecting bank insists upon a New York draft if it is short in New York funds, but does not demand such draft if it is long in such funds. If the bank is offered a check by the payer on his local bank to cover the exchange or a check on his New York account, the collecting bank must decide whether such checks can be accepted with safety; refusal to accept may result in a quarrel with the payer and a consequent loss of patronage. Bills drawn "in exchange" have been held by some courts non negotiable, being in terms of a commodity rather than in terms of money. On the whole, banks are warranted in refusing to handle items bearing these phrases as to exchange charges.