principal debtor made at or after the maturity of the instrument discharges the instrument. But a renunciation does not affect the rights of a holder in due course without notice. A renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon.

The doctrine of this section so far as it permits discharge without consideration, is peculiar to the law of bills and notes.79 An agreement for consideration to discharge a note, has of course equal effect,80 but no express statutory provision is needed to bring this about. A release of one joint maker coupled with a reservation of rights against other parties is not “absolute and unconditional" within the meaning of the section; 81 nor is an undelivered writing in the papers of a deceased holder of a note.82

§ 1193. Unintentional cancellation and alteration.

UNINTENTIONAL;

Section 123. [CANCELLATION; BURDEN OF PROOF.] A cancellation made unintentionally, or under a mistake or without the authority of the holder, is inoperative; but where an instrument or any signature thereon appears to have been cancelled the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake or without authority.83

Section 124. [ALTERATION OF INSTRUMENT; EFFECT OF.] Where a negotiable instrument is materially altered without the assent of all parties liable thereon, it is avoided, except as against a party who has himself made, authorized or assented to the alteration, and subsequent indorsers.

But when an instrument has been materially altered and is in the hands of a holder in due course, not a party to the

72 See infra, §§ 1829 et seq.

80 Whitcomb v. National Exch. Bank, 123 Md. 612, 91 Atl. 689.

81 Davis v. Gutheil, 87 Wash. 596, 152 Pac. 14.

82 Leask v. Dew, 102 N. Y. App. D. 529, 92 N. Y. S. 891. See also In re George, 44 Ch. D. 627. Cf. Pyle v. East, 173 Iowa, 165, 155 N. W. 283.

83 See Morris v. Reyman, 55 Ind. App. 112, 103 N. E. 423; In re Philpott's Est., (Iowa 1917), 164 N. W. 167; First Nat. Bank v. Gridley, 112 N. Y. App. D. 398, 98 N. Y. S. 445; Jones' Adm. v. Coleman, 121 Va. 86, 92 S. E. 910, and infra, §§ 1597, 1598.

alteration, he may enforce payment thereof according to its original tenor.84

Section 125. [WHAT CONSTITUTES A MATERIAL ALTERATION.] Any alteration which changes,

(1) The date;

(2) The sum payable, either for principal or interest;

(3) The time or place of payment;

(4) The number or the relations of the parties;

(5) The medium or currency in which payment is to be made;

Or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect, is a material alteration.85

§ 1194. Special rules governing bills of exchange.

TITLE II

BILLS OF EXCHANGE

ARTICLE I

FORM AND INTERPRETATION

Section 126. BILL OF EXCHANGE DEFINED.] A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer.

Section 127. [BILL NOT AN ASSIGNMENT OF FUNDS IN HANDS OF DRAWEE.] A bill of itself does not operate as an assignment of the funds in the hands of the drawee

84 Smith, Kline & French Co. v. Freeman (N. J. L.), 106 Atl. 22. In the Illinois Act the words "fraudulently or" (probably "and " was intended), are inserted before "materially" in line one and the words "by the holder" after "altered" in the

same sentence. In the Wisconsin Act the words "orally or in writing" are inserted after "assented" in the fifth line. See comment on this section, infra, § 1892.

85 See infra, §§ 1902-1908.

available for the payment thereof, and the drawee is not liable on the bill unless and until he accepts the same.86

Section 128. [BILL ADDRESSED TO MORE THAN ONE DRAWEE.] A bill may be addressed to two or more drawees jointly, whether they are partners or not; but not to two or more drawees in the alternative or in succession.

Section 129. [INLAND AND FOREIGN BILLS OF EXCHANGE.] An inland bill of exchange is a bill which is, or on its face purports to be, both drawn and payable within this State. Any other bill is a foreign bill. Unless the contrary appears on the face of the bill, the holder may treat it as an inland bill.

Section 130. [WHEN BILL MAY BE TREATED AS PROMISSORY NOTE.] Where in a bill drawer and drawee are the same person, or where the drawee is a fictitious person, or a person not having capacity to contract, the holder may treat the instrument, at his option, either as a bill of exchange or a promissory note.

Section 131. [REFEREE IN CASE OF NEED.] The drawer of a bill and any indorser may insert thereon the name of a person to whom the holder may resort in case of need, that is to say in case the bill is dishonored by nonacceptance or non-payment. Such person is called the referee in case of need. It is in the option of the holder to resort to the referee in case of need or not as he may see fit.

§ 1195. What amounts to an acceptance.

ARTICLE II

ACCEPTANCE

Section 132.-[ACCEPTANCE; HOW MADE, ETC.] The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee. It must not express that the drawee will perform his promise by any other means than the payment of money.

86 See supra, §§ 425, 426.

87

Prior to the enactment of the statute oral acceptances were often held good, but this was doubtless opposed to the best mercantile understanding, and, except as provided by Section 137, has been wisely changed by the statute.* A written admission that the drawee is indebted in an amount equal to the face of a bill drawn on him, is not an acceptance.89

Section 133. [HOLDER ENTITLED TO ACCEPTANCE ON FACE OF BILL.] The holder of a bill presenting the same for acceptance may require that the acceptance be written on the bill and, if such request is refused, may treat the bill as dishonored.

Section 134. [ACCEPTANCE BY SEPARATE INSTRUMENT.] Where an acceptance is written on a paper other than the bill itself, it does not bind the acceptor except in favor of a person to whom it is shown and who, on the faith thereof, receives the bill for value.90

Section 135. [PROMISE TO ACCEPT; WHEN EQUIVALENT TO ACCEPTANCE:] An unconditional promise in writing to accept a bill before it is drawn is deemed an actual acceptance in favor of every person who upon the faith thereof, receives the bill for value.91

87 See Scudder v. Union Bank, 91 U. S. 406, 23 L. Ed. 245; Hall v. Cordell. 142 U. S. 116, 35 L. Ed. 956, 12 Sup, Ct. 154; Jarvis v. Wilson, 46 Conn. 90, 33 Am. Rep. 18; Cook v. Baldwin, 120 Mass. 317, 21 Am. Rep. 517.

88 Faircloth-Byrd, etc., Co. v. Adkinson, 167 Ala. 344, 52 So. 419; Rambo v. First State Bank, 88 Kan. 257, 128 Pac. 182; Clayton Town Site Co. v. Clayton Drug Co., 20 N. Mex. 185, 147 Pac. 460; Izzo v. Ludington, 79 N. Y. App. Div. 272, 79 N. Y. S. 744; Frederick v. Spokane Grain Co., 47 Wash. 85, 91 Pac. 570. Cf. Gruenther v. Bank of Monroe, 90 Neb. 280, 133 N. W. 402.

89 Plaza Farmers' Union W. & E. Co. v. Ryan, 78 Wash. 124, 138 Pac. 651. See also Carmichael v. Tishomingo Banking Co., (Mo. App. 1917), 191 S. W. 1043.

90 See Jones v. Clumpler, 119 Va. 143, 89 S. E. 232.

91 A promise by telegraph is in writing within the meaning of the statute. Oil Well Supply Co. v. MacMurphey, 119 Minn. 500, 138 N. W. 784. Even though the sender telephoned the message to the operator. Selma Sav. Bank v. Webster County Bank (Ky.), 206 S. W. 870. See also the following cases where the writing was held to amount to an acceptance. North Atchison Bank v. Garretson, 51 Fed. 168; First Nat. Bank v. First Nat. Bank, 210 Fed. 542; Lehnhard v. Sidway, 160 Mo. App. 83, 141 S. W. 430; State Bank v. Bradstreet, 89 Neb. 186, 130 N. W. 1038, 38 L. R. A. (N. S.) 747; Johnson v. Clark, 39 N. Y. 216; First Nat. Bank v. Muskogee Pipe Line Co., 40 Okla. 603, 139 Pac. 1136, L. R. A. 1916 B. 1021. Cf. Soppe v. Mecha

Section 136. [TIME ALLOWED DRAWEE TO ACCEPT.] The drawee is allowed twenty-four hours after presentment, in which to decide whether or not he will accept the bill; but the acceptance if given, dates as of the day of presentation.

Section 137. [LIABILITY OF DRAWEE RETAINING OR DESTROYING BILL.] Where a drawee to whom a bill is delivered for acceptance destroys the same, or refuses within twenty-four hours after such delivery, or within such other period as the holder may allow, to return the bill accepted or non-accepted to the holder, he will be deemed to have accepted the same.92

The language of this section if taken literally seems open to objection. Aside from the inartistic terminology involved in calling what is really conversion an acceptance, it seems to follow that if such conversion is deemed an acceptance notice of dishonor need not be given to the drawer or indorser, an unfortunate result. Furthermore it is doubtful whether the words "within such other period" are intended to mean "within such longer period." Presumably they are so intended, but they do not say so. Accidental destruction is not within the scope of the section.93 Retention without more was held not to amount to an acceptance within the meaning of previous statutes from which this was taken; 94 but under the Negotiable Instruments Law it has been held that such retention does amount to an acceptance.95

ley (Neb.), 172 N. W. 35; Bank of Morganton v. Hay, 143 N. C. 326, 55 S. E. 811; Colcord v. Banco de Tamaulipas, 181 N. Y. App. D. 295, 168 N. Y. S. 710, where the writing did not amount to an acceptance. This section is held applicable to checks. Selma Sav. Bank v. Webster County Sav. Bank (Ky.), 206 S. W. 870.

92 This section is omitted in Illinois and South Dakota. In Pennsylvania and Wisconsin it is provided that mere retention is not an acceptance.

93 Bailey v. Southwestern Co., 12ỏ Ark. 257, 190 S. W. 430, 207 S. W. 34.

94 See St. Louis &c. Ry. Co. v. James, 78 Ark. 490, 95 S. W. 804; Dickinson v. Marsh, 57 Mo. App. 566; Matteson v. Moulton, 79 N. Y. 627.

95 State Bank v. Weiss, 46 N. Y. Misc. 93, 91 N. Y. S. 276; Wisner v. First Nat. Bank, 220 Pa. 21, 68 Atl. 955, 17 L. R. A. (N. S.) 1266 (changed by statute in Pennsylvania; see Union Nat. Bank v. Franklin Nat. Bank, 249 Pa. 375, 94 Atl. 1085); People's Nat. Bank v. Swift, 134 Tenn. 175, 183 S. W. 725. See also Standard Trust Co. v. Commercial Nat. Bank, 166 N. C. 112, 81 S. E. 1074.