BILLS AND NOTES - EFFECT OF UNREASONABLE DELAY IN PRESENTMENT FOR PAYMENT OF DEMAND NOTES AND BILLS OF EXCHANGE

The Negotiable Instruments Law, section 71, provides: "Where [the instrument] is payable on demand, presentment must be made within a reasonable time after its issue, except that in the case of a bill of exchange, presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof." This section raises some extremely complex problems: (1) Can the discharge of the contractual liability of the drawer and all indorsers of a demand bill of exchange be indefinitely postponed by successive negotiations, each within a reasonable time after the last? (2) Can the liability of the drawer and all indorsers, once discharged by unreasonable delay, be revived by a subsequent negotiation and prompt presentment for payment? (3) What rights does the indorsee of a demand note, which has been outstanding an unreasonable time after its execution, acquire against his indorser upon prompt presentment, dishonor and due notice? These problems will be discussed in the light of other provisions of the Negotiable Instruments Law and similar provisions of the earlier English Bills of Exchange Act, of the decided cases, and of the opinions of writers.