The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1900-01-24
DESK STUDIES FOR GIRLS:
MONEY AFFAIRS.
VI. SOLE LAW POINTS FOR GIRLS
PromissOry Notes.

y
ise to pay a definite sum Of money.
Any such promise is really a promfs-
sorry note. AT the time when such
promise is written there are two par
ties connected with 1.-THE one who
makes the promise and the one to
whom the money is to be paid 7
promise to pay Charles Brown SO.
(Signed) John Smith" This is a prom
is5ory note John Smith is the maker
and Charles Brown is the payee, that
is, the person to whom the money IS to
be paid. Such a promise should be
dated ard it should also state when
the money is 10 be paid-in one month,
or in three months, or on demand. If
Charles Brown wanted to turn this
note over to his grocer in payment Of a
bill he ought to have it worded differ
emily It should read, Il promise to
pay to the order Of Charles Brown; "
that is, John Smith viii pay the SO to
Charles Brown or to the baker or gro
Ger or anybody Charles Brown orders"
it paid TO. The note is then ''negOtia-
BILE" All United states bills are nego-
table They read, 1.-THE United States
viii pay bearer" that is, viii pay any
body bearing or holding the bills. A
note may be written on any kind Of
paper in ink or in pencil.
The words Value Received" are not
legally necessary, although they usu-
ally appear on ordinary prOmiSsory
notes. Thousands Of good notes made
without any value consideration are
handled daily. The promise to pay Of a
negotiable note must be unconditional.
It cannot be made to depend upon any
contingency whatever. A note made
payable in anything but money is sim
ply a form Of contract and is not a
negotiable instrument.
Notes and acceptances that are made
In settlement OF genuine business
transactions come under the head of
regular legitimate business paper. An
accommodation note, or acceptance, is
one which is signed, or endorsed, or
accepted simply az an accommodation
and not in set tiement of an account Or
in payment of an Indebtedness. With
banks. accommodation paper has d de-
servedly hard reputation. However.
there are all grades and shades of ac-
cOmmOdatiOn paper, though it repre-
s6ntS no actual business transaction
between the parties to it and rests upon
no other foundation than that Of mU-
tual agreement. No contract is good
without a consideration. but this is
only true between the original parties
y
receiver or holder Of 81 note has a good
title and can recover its value, even
though it was originally given without
a valuable consideration. An innocent
holder of a note which had been Origi-
nally lost or stolen has a good title TO
it if he received it fer value
A note does not draw interest until
after maturity, unless the words with
interest appear on the face. Notes
draw interest after maturity and unil
paid at the legal rate.
An indOrssr Of a note is any pera1n
who writes his name on the back of
it. and by so doing guarantees its
payment. Endorsements on notes are
usually made in blank, that is, with
out the words Of Pay to the order
Of" The receiver Of the note is then
free to ind0rse it or not at his pleasure
if ne wishes to transfer it. The in
dOrser is liable for its payment if tho
maker fails to meet it. If an indOrser
anould be compelled to pay motto be
has q good claim against the maker
and against each indorser whose name
appears above his own An indorser
to whose order a note is drawn or in
dOTSSd can transfer il without bscOm-
ing liable for its payment by writing
the words without recourse" before or
after his name on the back. a person
who receives promissory note in good
faith for fair value before the day Of
maturity takes it free from all de-
fects Of title and from all claims that
might be set up against any preceding
holders. This is not true of notes
transferred after maturity.
A note should be presented on the
exact day Of maturity. Notes made
payable at bank or at any other
place must be presented for payment
at the place named. When no place is
specified the note is payable at the
makers place of business or at his
residence. The note must not be pre-
sented before or after maturity. but
upon the exact day of maturity If tho
indoTsers are to be held liable for its
non-payment.
When a note is presented for pay
ment at maturity and is not paid #
is usually protested; that is. a notary
public makes a formal statement that
the note was presented for payment
and payment was refused. Notice of
such protest is sent to the maker and
to each indOrssr.
If a payment is made to aD-
ply on a note. such payment
should always be Endorsed on the back
Of the note. Such Endorsement re-
quires no signature The usual form
is to give the date and write Received
on within note" stating the amount.
An ordinary separate receipt is not
sufficient. Each amount indorsed on
the back reduces the face value.
It is generally understood that a
debtor is more likely to pay a promis-
sorry note than he is TO keep a simple
verbal promise. 1t will in-jure his
he al h
protest. It is difficult. too. to dispute
q claim after a note has been given in
settlement. The note may be used by
the creditor in raising money for his
own use; that is, he may get it dis
counted-Sell it TO a note broker or to
a bank. But there are some disad-
vantages. If note is accepted from
a debtor the account cannot be col
lected until the day Of maturity of the
note. You may hold a note against a
debtor and if your note is not due you
cannot by any process of law prevent
your debtor from selling everything
he owns and leaving for parts un-
known. A note that is overdue is
in some particulars better than a note
not yet matuTed. An overdue note
draws interest at the legal rate from
the date Of maturity, and legal steps
to collect it may be taken at any mo-
ment.
To discount a note or draft is to sell
It Mt discount. The rates Of discount
vary according to the security offered
or the character of the loan. or the
state Of the money market. For or6in-
airy commercial paper the rates run
from 10 per cent Notes received
and given by commercial houses are
not usually for q longer period than
four months.
Negotiable paper, whether made for
accommodation OF otherwise. nav he
transferred by Endorsement and de-
livery or by delivery alone. either be
fore it has fallen due or afterward
There is a difference, however. in the
liability attached to indorsers. and
the value Of the paper may be affected
BY the defenses existing between The
original parties. It would be we'll ia
consult a lawyer before accepting over
due paper, particularly If it has in