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bona fide holders of the instrument." Others require a surrender of all parts that have been accepted and indorsed, 254 or protested,255 or of all parts that have been received.? But if a bill has been lost, the holder may demand a deposit of the amount, and may protest the bill if it is refused. 25



253 HOLLAND (Exch. Law, art. 161). 264 HUNGARY (Exch. Law, $ 120). 255 DENMARK (Exch. Law, $ 63). 256 CHILI (Code Com. art. 721). 257 BOLIVIA (Code Com. art. 406); COLOMBIA (Code Com. art. 461); COSTA RICA (Code Com. art. 454); DENMARK (Exch. Law, $ 62); ECUADOR (Code Com., as in "Spain"); MEXICO (Code Com. art. 399); SALVADOR (Code Com. art. 460); SPAIN (Code Com. art. 507).



1420. Payment by Acceptor.
1421. By Accommodation Acceptor.
1422. Reissue by Acceptor.
1423. Payment or Purchase-Question of Intention,
1424. Discount by Drawee.
1425. Payment by Maker.
1426. By Joint Maker.
1427. By Drawer.
1429. By Indorser.
1431. Action by Indorser.
1432. Payment by Indorser after Judgment.
1433. Acceptor Liable to Indorser.
1434. Reissue by Indorser.
1435. Payment by Principal-Surety.
1437. Supra Protest.
1438. By Stranger.
1441. Place of Payment-As Agent.
1442. Funds Provided and Lost.

Payment by Acceptor.

$ 1420. The payment of a bill or note, in order to be a discharge of the instrument, should be made by the acceptor or maker, or by some one for him. 258 In general, payment made by the acceptor extinguishes the bill,259 and discharges all parties to it.260

And even if the amount paid by him is less than the face of the bill, it will discharge the drawer,261 although, if paid by the acceptor in a suit pending against acceptor and drawer jointly, the drawer might still

258 Byles, Bills, 224; Benj. Chalm. Dig. art. 234; Chit. Bills, 442; 2 Pars. Notes & B. 216. If made by the acceptor, he is sometimes said to "retire" the bill. 2 Daniel, Neg. Inst. 269; 2 Edw. Bills & N. & 725. 259 Elsam v. Denny, 15 C. B. 87.

260 Benj. Chalm. Dig. art. 234; Story, Bills, 410; including a co-acceptor, who may, however, be liable for contribution, Harmer v. Steele, 4 Exch. 1. And see Robertson v. Smith, 18 Johns. (N. Y.) 459; Boardman v. Paige, 11 N. H. 431.

261 Tassell v. Lewis, 1 Ld. Raym. 743; especially if received from the acceptor under an agreement on the holder's part that the acceptor should not be called upon to pay more, De La Torre v. Barclay, 1 Starkie, 7.

remain liable for costs.26 2 Part payment, however, through a sale of collateral received from the acceptor, and surrender and cancellation of the bill by him, will not prevent the holder from proceeding to en force other collateral received from the drawer, although the ultimate remedy of the drawer against the acceptor may have been impaired by the surrender and cancellation of the bill.263 But if the acceptor pays part of the bill, and gives his bond and warrant for the balance, the indorser will be discharged.2


Payment by Accommodation Acceptor.

§ 1421. Payment by an accommodation acceptor extinguishes the bill, even as against the drawer who has been accommodated by the acceptance, so far as regards the acceptor's rights against the drawer on the bill.265 But such acceptor may hold the drawer liable on an implied contract for his indemnity, if none is expressed.266 And he may recover against all the drawers, although one was a surety for the others, and was known to the acceptor to be such when he accepted the bill.2 If, on the other hand, he has paid the bill out of the funds of the principal drawer in his hands, it will discharge an accommodation drawer also.268

The law implies a contract on the drawer's part to indemnify one, who accepts a bill for his accommodation.269 And if the drawer is


262 London & Suburban Bank v. Walkinshaw, 25 Law T. (N. S.) 704.
263 Yglesias v. Bank, 3 C. P. Div. 60.
264 English v. Darley, 2 Bos. & P. 61.

265 2 Daniel, Neg. Inst. 263; 2 Edw. Bills & N. & 722. And he cannot recover interest after payment at the rate expressed in the draft, but only at the rate fixed by law. Martin v. Muncy, 40 La. Ann. 190, 3 South, 640.

266 Benj. Chalm. Dig. art. 230; 2 Edw. Bills & N. $ 722; Story, Bills, s. 420; Christian v. Keen, so Va. 369. And in such action the bill is evidence. of the amount paid. 2 Daniel, Neg. Inst. 264. But where the drawer requested him to accept and charge to a third party, he cannot look to the drawer, unless he acted as his agent. Bell v. Davidson, 3 Wash. C. C. 328.: Fed. Cas. No. 1,248.

267 Suydam v. Westfall, 2 Denio (N. Y.) 205, reversing 4 Hill (N. Y.) 211, and overruling Wing v. Terry, 5 Hill (N. Y.) 160. See, too, Griffith v. Reed. 21 Wend. (N. Y.) 502; Story, Bills, $ 420.

268 Brander v. Phillips, 16 Pet. 121. 269 Dickerson y. Turner, 15 Ind. 4. But the right of action does not arise


or sue on

insolvent, the accommodation acceptor may, on payment by him, be subrogated in equity to the position of the holder.270 And after payment he may enforce collateral pledged for his security, a mortgage given to indemnify him.272 But until he has paid the bill he can neither sue the drawer nor foreclose a mortgage given for his security.273

An acceptor may also bring suit against the person for whose account the bill was drawn, where such person requested him to accept the bill "against properly indorsed bills of lading of 8,000 bushels of wheat per Anna on our account," although the bills of lading on the strength of which the acceptance was given) proved to have been forged by the drawer of the bill of exchange.276

Reissue by Acceptor.

§ 1422. If the bill is in the acceptor's possession at maturity, it is prima facie evidence of its payment,275 although he may be only one of several joint acceptors.276 And after an acceptor has paid a bill

until the acceptor has paid and thereby discharged the drawer. Porter v. Sandidge, 32 La. Ann. 449.

270 Bank of Toronto v. Hunter, 4 Bosw. (N. Y.) 646. And the maker of a collateral mortgage cannot object to the payment after 16 years, although the bill is slightly misdescribed in the mortgage. Byers v. Fowler, 14 Ark. 86.

271 Even against an attaching creditor of the drawer. Printup v. Johnson, 19 Ga. 73.

272 Spiller v. Creditors, 16 La. Ann. 292: but only if the mortgage (made by the drawer of the bill) is expressly for his indemnity, since the bill is presumptively the debt of the acceptor, Salaun v. Relf. 4 La. Ann. 575. So, if the payment was made by the drawer's note with the acceptor and indorser of the original bill as sureties, and the acceptor paid the note, and the mortgage was made to the indorser for his personal indemnity. Gomez v. Lazarus, 16 N. C. 205.

273 Planters' Bank v. Douglass, 2 Head (Tenn.) 699; nor can the holder foreclose such mortgage. And an acceptor cannot sue a third party on an express guaranty until he has paid the bill. Chilton v. Whiffen, 3 Wils. 13.

274 Woods v. Thiedemann, 1 Hurl. & C. 495. The acceptor had, in this case, charged the payment in his account, and it was not disputed for two years.

275 Hays v. Samuels, 55 Tex. 560; even though he holds it as executor, Benj. Chalm. Dig. art. 238.

276 Benj. Chalm. Dig. art. 238; Story, Bills, $ 413; Harmer v. Steele, 4 Exch. 1.

of exchange he cannot reissue it as against a co-acceptor 277 or draw


If, however, the acceptor discounts or purchases a bill before its maturity (as he may do), he can reissue or transfer it like any other purchaser, and prior parties will remain liable to his indorsee. 279 But if the acceptor purchases a bill before its maturity, and the drawer afterwards, before maturity, countermands its payment because of failure of consideration, the bill will be subject to such defense in his hands.28


Payment or Purchase-Question of Intention.

§ 1423. Where a bill is discounted by the bank at which it is payable by the terms of the acceptance, and is afterwards transferred by indorsement, before maturity, and paid by the bank at maturity, it is a question for the jury to determine whether the bank paid it as agent for the acceptor or as indorser; 281 and, in the latter case, suit would lie against the drawer, but not in the former. And where the bank takes a general receipt, it may be evidence of a purchase instead of a payment as agent for the acceptor or drawer. 28

Whether a transaction of this sort amounts to a payment or a purchase of the bill is purely a question of intention for the jury to determine; 283 and the intention of both parties must concur in a pur


277 Harmer v. Steele, supra.

278 2 Daniel, Neg. Inst. 265. But where the acceptor gave a mortgage to the drawer, and received back the uncanceled bill, and transferred it to a bona fide holder, it has been held that the drawer is liable to such holder, the acceptor's action not amounting to a payment. Morley v. Culverwell, 7 Mees. & W. 174.

279 So held, as to the drawer, in Attenborough v. Mackenzie, 25 Law J. Exch. 244; and as to an indorser who indorsed before acceptance, in Rogers v. Gallagher, 49 Ill. 182; Swope v. Ross, 40 Pa. St. 186.

280 Stark v. Alford, 49 Tex. 260. 281 Byles, Bills, 226; Benj. Cbalm. Dig. art. 231; Pollard v. Ogden, 2 El. & Bl. 459. In this case the acceptor's account was overdrawn, and he failed on the day the bill became due, and the jury found that the bank paid as indorser, which the bank might do without so informing the holder.

282 Graves v. Key, 3 Barn. & Adol. 313; Hubbard v. Jackson, 4 Bing. 390; 1 Moore & P. 11.

283 Kyne v. Erskine, 7 Mo. App. 591; Dougherty v. Deeney, 45 Iowa, 443; although the payment is made by one who is not a party to the bill, Wil

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