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Overdue Paper


OVERDUE PAPER. A bill that is overdue, that is, whose time of payment has matured, and is not discharged may be negotiated as other bills, except that the fact of its being overdue is equivalent to notice to the holder of all facts which, if known before maturity, would destroy his title as a bona fide holder without notice. This characteristic of overdue paper is called an "equity attaching to the bill." (Kittle v. DeLameter, 3 Nebr., 325; Natl. Bank v. Texas, 20 Wall., .72.) Bills payable in installments are considered over due in toto, when any installment is past due, but not from the fact that interest is past due. (Field v. Tibbetts, 57 Me., 358; Kelley v. Whitney, 45 Wis., no.) A bill of exchange payable on demand and not dishonored by non-acceptance is not over due unless it appears on its face to have been in cir culation an unreasonable time. (La Due v. Bank, 31 Minn., 33.) Bills payable on demand are over due after the expiration of the last day of grace. (Chambiss v. Matthews, 57 Miss., 306.) The hold er's title after maturity will be as good as that of the previous holder, in case of a defective title in one of the parties. (Hereth v. Bank, 34 Ind., 380.) The existence of a set-off or matter of counter claim against the holder of a bill is not an equity which attaches to an overdue bill. (Richardson v. Daily, 34 Ia., 427; Young v. Schroner, 80 Pa. St., 463.) But this principle is denied by other author ities. (Armstrong v. Chadwick, 127 Mass., 156; Pugh v. Grant, 85 N. C., 39.) But if the transfer was without consideration, or in violation of an agreement not to negotiate after maturity, the equity attaches. But the lack of consideration as between an accommodation maker and the holder is not an equity attaching to the instrument. (Davis v. Miller, 14 Grat., I; contra, Kellogg v Barton, 12 Allen, 527.) Payment and other forms of dis charges disentitle the holder after maturity, but these are rather regarded as grounds of nullifying the instrument than as equities attaching to the bill. Part payment is regarded as an equity attaching to an overdue bill.

bill, holder and equity