Many men have lost through their ignorance of this essential transaction.
CHAPTER XXVI
LOOK BEFORE YOU LEAP
We are not quite through with the note.
When making a payment of principal or interest on a note, be sure to take a receipt for the amount, stating specifically what the payment is to be credited to. In addition, if it be possible, see that the sum paid be endorsed on the back of the note itself.
The endorsement of the sum paid on the back of the note bars its being negotiated for more than the amount actually due.
Sometimes the owner and the maker of a note live at points some distance apart. If you were the maker of the note, and wanted to make a payment, but wished to avoid the expense and annoyance of a trip, what should be done?
In this case a good plan would be to write to the owner of the note, asking him to send it by a certain bank in your neighborhood where you can pay. The bank will receive the cash, make the endorsement in your presence, and then send its check for the amount with the note to the owner.
You must pay the cost of this transaction.
Or you may send the amount to be credited on your note, through a bank draft, as already indicated.