come 14. The same principle is applied in the case of a bill Being transferred overdue; for such a bill is said to “ disgraced to the indorsee," who takes it at his peril and "subject to all the equities with which it may be encumbered." For instance, suppose a bill, drawn on a person for a gaming debt and accepted, were indorsed by the drawer, when overdue to an innocent indorsee for value, the latter could not recover against the acceptor; for the indorsee took the bill under circumstances of suspicion, and solely on the credit of his indorser. But, if the same bill had been indorsed in the same way before it was due, the indorsee could have recovered against the acceptor, as well as against the person from whom he took the bill. The above is a case where the person who indorsed the bill overdue could not himself recover upon it, but if the indorser be able to sue upon the bill, so can his indorsee. As if for instance, in the above case, the drawer had indorsed the bill to an innocent indorsee for value before it was due, and then the indorsee had indorsed to another after due, the latter could recover. But an indorsee of a bill or note overdue takes subject only to the equities attaching upon the instrument itself, and he is not affected by those which are only collateral to it, as, for instance, a set-off due from the payee to the maker of a note. 15. A note payable on demand is not to be considered overdue unless there be some evidence of payment having been refused, for such notes are often intended to be a continuing security, and interest is often paid on them for many years. 16. When once paid at maturity by the acceptor or maker, bills and notes are extinguished, and cannot again be negotiated; but if paid before maturity, they will still be good in the hands of a bona fide indorsee for value, who has taken them without notice of their having been paid. They should therefore, on payment by the acceptor or maker, be given up to them. An accommodation bill paid by the drawer at maturity cannot be re-issued by him. But, with this exception, until a bill is paid by the acceptor, and a note by the maker, they remain negotiable. Therefore, the drawer or indorser who has taken up a dis honored bill at maturity, can, instead of himself suing the acceptor, indorse the bill to another person, who will have that right. When the acceptor or maker has made a partial payment at maturity, the balance only can be recovered by the holder. The holder of a note, on which part of the consideration has been paid, can only indorse for the whole of the balance. When a bill is transferred for part only of the sum due upon it, if this fact appears on the bill itself, the indorsee must sue in the name of the person who transferred to him; but if the indorsement do not mention the fact, and there be no memorandum of it on the bill, the indorsee can sue and recover in his own name the whole amount of the bill, and will be a trustee of the surplus for his transferor. After taking a release for the bill, or after bringing an action on the bill, the holder cannot indorse so as to confer a title on any one who knows of the release or the action, as the case may be. 17. If the bill or note be under £5, it must only have twenty-one days to run. No indorsement must be made after the bill or note is due; each indorsement must be dated; and the date must be at or not before the time of making, must specify the name and place of abode of the indorsee, and be attested by one subscribing witness at least. CHAPTER V. HOW FAR A BILL OR NOTE IS CONSIDERED AS PAYMENT. 1. Rights of Creditor who has taken a Bill or Note for a Debt. 2. Rights of Parties taking Instruments payable to Bearer without Indorsement.—Sale of Bill or Note. 3. Creditor of a Firm taking separate Bill or Note of one Partner. 4. Loss of Bill received for a Debt. 5. Lien ceases on taking a Bill. 6. Miscellaneous matters connected with payment. 1. It has already been stated that if a creditor take a bill or note payable at a future day from his debtor, or from a third party for the debtor, the debt is not paid, but no action can be brought for it till the bill or note is mature and dishonored. If the bill or note is paid, or if it is lost or discharged by the negligence of the creditor, the debt is satisfied; but see sec. 4. If it is in the hands of the creditor overdue and dishonored, he has his remedy, either on the bill or the original debt; and though he may have parted with the bill, the creditor will, in case it be dishonored. still have his remedy for the original debt. I have spoken of the debt being discharged by the negligence of the creditor who has taken the bill; this refers to the case where the debtor, giving the bill for the debt, is drawer or indorser, and must have punctual notice of dishonor (see chapter xiii). If the debtor were acceptor or maker of a bill or note, he cannot be discharged by the creditor's negligence. The law will be the same if the debtor request the creditor to take a bill or note of a third person, and the bill or note is dishonored; the creditor may sue his original debtor. The same where, not having the option of taking cash, he takes a bill of the debtor's agent. 2. We have seen (chap. iv, sec. 9) that where a bill or note made or become payable to bearer, is given, though without indorsement, for a pre-existing debt or past consideration to a creditor who is entitled to money, the creditor may still sue his debtor if the bill is dishonored. But if the payment of such a bill be made, not for a past debt, but for an immediate consideration, such as the sale of goods then and there, the seller is supposed to consent to take the bill in exchange for the goods, and as he has not insisted on indorsement, he cannot sue the buyer if the bill turns out worthless, for the bill has been simply exchanged, with all its faults, for the goods. As to the case of some of the signatures being forged, &c., see chap. iv, sec. 10. But a bill may in the same way, by agreement between the parties, be taken, not only upon such a bargain as that just mentioned, but for a pre-existing debt. In fact, a debtor may, by express agreement with his creditor, give him a bill payable to bearer without indorsing it, so as to be at once, and whether eventually paid or not, a satisfaction and payment of the debt. 3. But though, in the absence of an agreement, a creditor does not receive payment of a debt by simply taking the bill or note of his debtor, yet if his debtor be a firm, and he takes the separate note of one of the partners, he will be taken to have discharged the firm, and to rely solely upon the single partner, unless, of course, there were an express agreement that the others should remain liable. This is because, in the case of the bankruptcy of the firm, or the death of the partner, the creditor might be in a far better position than if he had the whole firm as bis debtors, and this advantage amounts to a consideration. 4. If the bill or note be lost, the debt is discharged; but by a recent Act the owner may sue on the instrument, and recover the money, on giving an indemnity to the satisfaction of the Court. 5. Where a man has a lien on goods, and he takes a bill or note for the debt, the lien on the goods ceases, and he must give them up to the owner, unless there is an express agreement for him to keep them. 6. When a renewal bill or note is dishonored, the right to sue on the old bill or note revives. Where a man is bound by deed to pay money, the taking a bill or note from him does not extinguish or suspend the right to sue him upon the deed. If he owe money for rent, and give a promissory note for it, the landlord may still distrain at any time till the note is paid. If on borrowing money a man covenant to pay it by deed, as by giving a mortgage, and give a bill or note at the same time by way of collateral security, the creditor may sue either on the deed or bill; but where it is not so intended, the right to sue on the bill is merged or swallowed up in the right to sue on the deed. OF CHAPTER VI. АССЕРТANOE. 1. Meaning and nature of. 2. General Acceptance. 5. When Bill may be accepted-date. 6. Delivery must accompany Acceptance. 7. What may be treated as a refusal to accept. 8. Acceptance for honor of Drawer. 9. What is admitted by Acceptance. 10. How Acceptor may be discharged. 11. Who must accept? 1. Acceptance only applies to bills. When the drawee irrevocably assents to pay the bill in money when due, he is said to accept. Acceptance in this country of bills, whether inland or foreign, must be by writing on the bill, signed by the acceptor, or some person duly authorized by him in his name. Acceptances are of three kinds, general, special, and qualified. 2. A general acceptance may be by writing, "Accepted," or "Accepted, payable at Drummond's bank," or by similar words, followed by the acceptor's signature. As to the presentation of a bill so payable, see chap. viii, sec. 4. 3. A special acceptance is where the word "Accepted," is followed by words which do not merely indicate, as in the last instance given, the place where the bill is to be payable, but restrict its payment to that particular place and no other; as, for instance, "Accepted, payable at Drummond's bank, and there only," or similar words. 4. A qualified acceptance is where a man accepts a bill for only a portion of the amount for which it is drawn; and this may be done by writing "Accepted for £100 only." If a bill were drawn payable at three months, and were accepted "payable at six months," or condition of its being renewed for three months," or with other words to the like effect appearing on the face of the bill, this would be a partial acceptance. on There is also a kind of acceptance called conditional, by which the bill is made payable only on the happening of a certain event; but now that acceptances must be in writing, it is necessary that the condition (if any) should appear on the face of the acceptance. 5. A bill may be accepted when the time at which it is made payable has elapsed, and then the acceptor will be liable immediately. If the bill be drawn payable |