Sec. 42a-3-304. Overdue instrument. - Connecticut Statutes

      Sec. 42a-3-304. Overdue instrument. (a) An instrument payable on demand becomes overdue at the earliest of the following times:

      (1) On the day after the day demand for payment is duly made;

      (2) If the instrument is a check, ninety days after its date; or

      (3) If the instrument is not a check, when the instrument has been outstanding for a period of time after its date which is unreasonably long under the circumstances of the particular case in light of the nature of the instrument and usage of the trade.

      (b) With respect to an instrument payable at a definite time the following rules apply:

      (1) If the principal is payable in installments and a due date has not been accelerated, the instrument becomes overdue upon default under the instrument for nonpayment of an installment, and the instrument remains overdue until the default is cured.

      (2) If the principal is not payable in installments and the due date has not been accelerated, the instrument becomes overdue on the day after the due date.

      (3) If a due date with respect to principal has been accelerated, the instrument becomes overdue on the day after the accelerated due date.

      (c) Unless the due date of principal has been accelerated, an instrument does not become overdue if there is default in payment of interest but no default in payment of principal.

      (1959, P.A. 133, S. 3-304; P.A. 91-304, S. 30.)

      History: P.A. 91-304 substantially revised provisions of former Subsecs. (3) and (4)(f) re overdue instruments and deleted remainder of former provisions re when the purchaser has notice of a claim or defense.

      See Sec. 42a-3-302(a)(1), 42a-3-302(a)(2)(iii), 42a-3-302(b) and 42a-3-307 for successor provisions to Sec. 42a-3-304, revised to 1991, re when a purchaser has notice of a claim or defense.

      Annotations to former statutes:

      1958 Rev., S. 39-46: This presumption (re date of negotiation) is rebuttable. 105 C. 78.

      1958 Rev., S. 39-56: Maker of note is not affected by usurious agreement between payee and pledgee. 91 C. 560. Defense of usury is personal to debtor and to those in privity with him. Id., 560.

      Cited. 16 CS 293; 18 CS 15.

      1958 Rev., S. 39-57: Bad faith must be more than negligence. 42 C. 146; 54 C. 383; 106 C. 150. No presumption that endorsee knew of fraud. 71 C. 61; Id., 668. Knowledge of officer of bank taking note as to fraud not imputable to it, when. 72 C. 666; 79 C. 348. Facts consistent with valid title in endorser not enough to put endorsee on notice. 72 C. 576. If endorsee has knowledge of such facts that his action amounts to bad faith, he cannot recover. 78 C. 184. Knowledge is question of fact. 91 C. 263. Inadequacy of consideration as bearing on question of bad faith. 106 C. 150. Cited. 118 C. 117. No duty on purchaser of note to inquire into purpose for which it was given, or to maker's or endorser's responsibility, or existence of possible defenses. 119 C. 371. Bank, which gives depositor draft for amount of account and later cashes it after account has been garnisheed, is chargeable with knowledge of defect. 122 C. 171.

      Cited. 16 CS 294. Cited. 18 CS 15. Notice does not have to be express from the face of the instrument. 19 CS 124.

      Annotations to present section:

      Cited. 182 C. 437.

      Where plaintiff bank had no notice of complaint of defendant as to performance by freezer-food company of underlying contract at time it bought the note, this defense could not be raised against plaintiff, a payee holder in due course. 4 Conn. Cir. Ct. 620. Cited. 5 Conn. Cir. Ct. 413.

      Former Subsec. (4):

      Former Subdiv. (e) cited. 185 C. 463.

      Subsec. (b):

      Subdiv. (2) cited. 231 C. 441.