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Miller v. Kreiter, 76 Pa. St. 78; Eckert v. Cameron, 7 Wright, 120. When the holder of a bill of exchange, accepted for the accommodation of the drawer, sends it to a bank for collection, and the bank, when the bill comes to maturity, pays the amount thereof to the credit of the holder, this is not such a payment as discharges the acceptor; but the bank succeeds to the right of the holder, and may maintain an action on the bill against the acceptor. Pacific Bank v. Mitchell, 9 Met. 297. The surrender of a genuine note of a town in exchange for an instrument purporting to be a renewal note forged by the treasurer of the town does not extinguish the surrendered note, which, although not to be found, still can be sued upon by the holder thus induced to give it up. Bass v. Inhabitants of Wellesley, 192 Mass. 526. Where the defendant admits the execution of a note, the burden of showing payment is on him. Guano Company v. Marks, 135 N. C. 59.

(b) A payment made to the holder of a promissory note by an indorser, not as agent for the maker, but simply in discharge of his obligation as indorser, where the note was executed by the maker for value, does not enure to the benefit of the latter, and in an action upon the note he is liable for the whole amount thereof, notwithstanding the payment. Madison Square Bank v. Pierce, 137 N. Y. 444. In the case cited it was said: "To the extent of the money paid, the indorser becomes equitably entitled to be substituted to the rights and remedies of the holder, and becomes, pro tanto, the beneficial owner of the debt; so that the maker's obligation to pay the note in full, at first due the holder solely in his own right, becomes, after the part payment by the indorser, still wholly due to the holder, but partly in his own right and partly as trustee for the indorser. A court of law cannot split the note into parts, and must act upon the legal interest and ownership." For cases where payment made by person secondarily liable, see section 202.

(c) See section 204.

(d) Thus, the release of one joint maker will operate to discharge the other joint parties. Crawford v. Roberts, 8 Oregon 324. But to have this effect the release must be under seal. Shaw v. Pratt, 22 Pick. 305.

(e) Statute applied in Schwartzman v. Post, 94 App. Div. (N. Y.) 474, 477. The words "in his own right" merely exclude such a case as that of a maker acquiring the instrument in a

purely representative capacity. (Id.) If he should become the holder in a representative capacity, for example, as executor, the instrument would not be discharged. Nash v. DeFreville (1900), 2 Q. B. 72. See section 80.

§ 201. When persons secondarily liable on, discharged. -A person secondarily liable on the instrument is discharged:

1. By any act which discharges the instrument;

2. By the intentional cancellation of his signature by the holder;

3. By the discharge of a prior party (a);

4. By a valid tender of payment made by a prior party (b);

5. By a release of the principal debtor, unless the holder's right of recourse against the party secondarily liable is expressly reserved (c);

6. By any agreement binding upon the holder to extend the time of payment or to postpone the holder's right to enforce the instrument* (d), unless the right of recourse against such party is expressly reserved (e).

(a) Shutts v. Fingar, 100 N. Y. 539; Spies v. National City Bank, 174 N. Y. 222; Couch v. Waring, 9 Conn. 261; Gennis v. Weighley, 114 Pa. St. 194. It is a general rule that whatever discharges the maker or acceptor discharges the drawer and indorser, who are sureties, for the contract which they undertook to assume thus passes out of existence by the act of the beneficiary. And whatever discharges a prior indorser discharges all subsequent indorsers, for the reason that he stood between them and the holder, and on making payment each one could have had recourse against him, but from which his discharge precludes them. The contracts of the parties are said to be like the links of a pendant chain; if the holder dissolves

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* By an error in engrossing, the words "unless made with the assent of the party secondarily liable, or after the word instrument are omitted in the New York Act. They were not supplied by Laws 1898, Chap. 336. These words are included in the section as passed in all the other states.

the first, every link falls with it. Shutts v. Fingar, supra. But this rule, of course, does not apply where a prior party has been discharged by the laches of the intermediate indorser; for the holder need give notice only to his immediate indorser. West River Bank v. Taylor, 34 N. Y. 128, 131. And after the responsibility of an indorser has been fixed no act or dealing of the holder with the maker will discharge the indorser, except it be such an act as will defeat, impair or delay the right of the indorser, on paying the note, to recover against the maker. Farmers' Bank v. Sprigg, 11 Md. 390. Where the holder of a note, with several indorsers in blank, sues the maker and writes over the name of the first indorser an order to pay to himself, the holder, but without striking out the names of the subsequent indorsers, he does not thereby discharge them, and therefore one of them who pays the amount of the note to the holder may sue any of the prior parties. Cole v. Cushing, 8 Pick. 48. An indorser is discharged where the holder has allowed the statute of limitations to run against the maker. Shutts v. Fingar, 100 N. Y. 539. (b) Spurgeon v. Smiths, 114 Ind. 453.

(c) By an express reservation of the holder's rights against the drawer or indorsers, their rights against the maker or acceptor are reserved by implication. Gloucester Bank v. Worcester, 10 Pick. 528; Tombeckbe Bank v. Stratton, 7 Wend. 429; Stewart v. Eden, 2 Cai. 121. The giving of a judgment or other security by the maker or a prior indorser does not discharge a subsequent indorser. First Nat. Bank v. Peltz, 176 Pa. St. 513; Guarantee Co. v. Craig, 155 Pa. St. 343.

(d) Statute applied in Deahy v. Choquet (R. I.) 67 Atl. Rep. 421. Any extension, no matter how short, by a valid agreement, will discharge the indorser or surety. Cary v. White, 52 N. Y. 138; Nightingale v. Meginnis, 34 N. J. Law, 461; Siebeneck v. Anchor Savings Bank, 111 Pa. St. 187; In re Bishop's Estate, 195 Pa. St. 85; Friedenberg v. Robinson, 14 Fla. 130. But there must be an enforcible agreement to this effect, either expressed or implied. (Id.) Ordinarily the taking of a new note from the debtor, payable at a future day, suspends the right of action upon the original demand until the maturity of the new note, and hence discharges a non-assenting surety. Hubbard v. Gurney, 64 N. Y. 450; Place v. McIlvain, 38 N. Y. 960; Fridenberg v. Robinson, 14 Fla. 130. But when the new security is payable on demand no presumption arises of an agreement. Board of

Education v. Fonda, 77 N. Y. 350, 362. And where new security is taken merely as collateral, the fact that the collateral may not be enforcible until a definite time in the future does not operate to extend the time of payment of the principal debt or suspend the right to sue on the original security. Falkill National Bank v. Sleight, 1 App. Div. 189, 191; United States v. Hodge, 6 How. (U. S.) 279. Mere indulgence to the maker or acceptor will not discharge a drawer or indorser; there must be an agreement to extend the time of payment binding upon the holder. Smith v. Erwin, 77 N. Y. 466; Bank of Utica v. Ives, 17 Wend. 501; Crawford v. Millspaugh, 13 Johns. 87; Lockwood v. Crawford, 18 Conn. 376; Friedenberg v. Robinson, 14 Fla. 130. And for this purpose the contract must be supported by a valid consideration. Cary v. White, 52 N. Y. 138. A part payment by the maker is not such a consideration, Halliday v. Hart, 30 N. Y. 474; nor is an agreement to pay interest, since it is merely a promise to do what the party is already bound to do. Wilson v. Powers, 130 Mass. 127; Stuber v. Schack, 83 Ill. 192. An indorser is not discharged by extending the maker's time to answer. German-Am. Bank v. Niagara Cycle Co., 13 App. Div. (N. Y.) 450.

The ground upon which an agreement to give time to the maker, made by the holder without the consent of the indorsers, upon a valid consideration, is held to be a discharge of the indorsers, is solely this, that the holder thereby impliedly stipulates not to pursue the indorsers, or to seek satisfaction from them in the intermediate period. It can never apply to any case where a contrary stipulation exists between the parties. Hence, if the agreement for delay expressly saves and reserves the rights of the holder in the intermediate time against the indorsers, it will not discharge the latter. In such case the very ground of the objection is removed, for their rights are not postponed against the maker if they should take up the note. Hagey v. Hill, 75 Pa. St. 108, 111. The burden of showing that the indorser assented to such extension of time is on the party seeking to charge him. Siebeneck v. Anchor Savings Bank, 111 Pa. St. 187.

(e) Wagman v. Hoag, 14 Barb. 233, 239; Rockville National Bank v. Holt, 58 Conn. 526; Bank v. Simpson, 90 N. C. 469; Minir v. Crawford, L. R. 2 Scotch Appeals, 456; Kenworthy v. Sawyer, 125 Mass. 28; Morse v. Huntington, 40 Vt. 488; Hagey v. Hill, 75 Pa. St. 108. In the previous editions of this work, the author expressed the opinion that, under the statute, an

accommodation maker will not be discharged by an extension of time granted to the indorser, for the reason that a maker, even for accommodation, is, by virtue of section three, primarily liable upon the instrument. And this view has been adopted by the Court of Appeals of Maryland and the Supreme Court of Oregon. Vanderford v. Farmers & Mechanics Nat. Bank, 66 Atl. Rep. 47; 10 L. R. Ann. N. S. 129; Cellers v. Lyons, 89 Pac. Rep. 426; 10 L. R. Ann. N. S. 133. In the Maryland case, it was said: "Since the passage of the negotiable instruments law, this is the first time that the precise question raised by the pleadings in this case has been presented to this court for decision; but the intention of the legislature, as expressed in the section of the Code we have quoted, would seem to be obvious. That intention is to be ascertained by the words used to express it; and when its meaning, as gathered from the words employed, is plain and intelligible, the court should give it effect. When the legislature has declared, as it has done in these sections, that a negotiable instrument signed by a party who is primarily liable thereon, as that liability is defined by the act, may be discharged in one of the five specified methods, it would seem plain that it meant that the particular method prescribed for the accomplishment of that result should exclude a discharge by any other, or different, method, upon the familiar maxim that the express mention of one thing implies the exclusion of another." And in the Oregon case, the court said: "What is expressed in an act is deemed exclusive, when it is creative, or in derogation of some existing law, or of some of the provisions of a particular act. 2 Sutherland, Stat. Constr. Lewis's 2d Ed. § 491. It is indicated in the title of the act under consideration that its purpose is "to establish a law uniform with the laws of other States on that subject." Inasmuch as the enactments relating to negotiable instruments differed in the various States, and as the decision interpreting both the common-law and legislative provisions were far from being harmonious, it must be inferred, from the language constituting the title of the act, that it was intended to provide a complete and comprehensive law on this subject; and, since it defines an accommodation maker, making him. primarily liable, and in one section designates how negotiable instruments may be discharged, but contains no provision whereby a person primarily liable can be released, except by payment, etc., and in the section following specifies the manner in which persons secondarily liable

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