5. The indorser of a bill writes to the drawer of a bill, pro- $ 59. mising to "retire" it, and accordingly takes it up before maturity. It is not discharged: Elsam v. Denny, 15 C. B. at p. 94 (1854).

6. The drawer or indorser of a bill who pays, is a quasisurety for the acceptor, and as such is entitled to the benefit of any securities deposited with the holder by the acceptor: Duncan v. N. & S. Wales Bank, 6 App. Cas. 1 (1880).

dation bill.

3. Where an accommodation bill is paid in due Accommocourse by the party accommodated, the bill is discharged. Imp. Act, s. 59 (3).

An accommodation bill is one which the drawee has accepted for the accommodation of the drawer or some other person. The person thus accommodated may or may not be a party to the bill. For a definition of an accommodation party and his liabilities, see section 28.

The principle on which the bill is discharged is, that it has been paid by the person who is in reality primarily liable for the debt; and having no rights against any person, he could not by a transfer after maturity give any rights to another holder: Solomon v. Davis: 1 C. & E. 83 (1883).

If the bill was for the accommodation of several parties, and it is paid by one of them, the bill is discharged, but the party who has paid has his recourse against the others.

If several persons indorse a bill or note for the accommodation of the acceptor or maker, and one of them pays it, the whole circumstances attendant upon its making, issue and transference, may be legitimately referred to for the purpose of ascertaining the true relation to each other of the parties who put their signatures upon it, and reasonable inferences from these facts and circumstances are admitted to the effect of qualifying, altering, or even inverting the

$ 59. relative liabilities which the law merchant would otherwise assign to them: Macdonald v. Whitfield, 8 App. Cas. 733 (1888).

Acceptor the holder

ILLUSTRATIONS.

1. Where the payee for whose accommodation the bill was made pays it after maturity, the bill is discharged: Watson v. Porter, 5 N. B. (8 Kerr) 137 (1846).

2. Plaintiff took a bill of sale of A's goods, undertaking to pay his borrowed money and accommodation notes. The note sued on was made by defendant for A's accommodation and indorsed by him and discounted in a bank. Plaintiff paid it at maturity and sued the maker. Held, that although plaintiff did not know it was an accommodation note, it was discharged on his paying it for A. and his action was dismissed: Peters v. Waterbury, 24 N. B. | 154 (1884).

3. A bill is accepted for the accommodation of the drawer. He negotiates it, and at maturity takes it up. Subsequently he re-issues it. The holder cannot sue the acceptor, for the bill was discharged when the drawer paid it: Cook v. Lister, 32 L. J. C. P. at p. 127 (1863). See also Lazarus v. Cowie, 3 Q. B. 459 (1842); Ralli v. Dennistoun, 6 Ex, at p. 493 (1851); Parr v. Jewell, 16 C. B. at p. 709 (1855); Strong v. Foster, 17 C. B. at p. 222 (1855).

60. When the acceptor of a bill is or becomes at matur the holder of it at or after its maturity, in his own right, the bill is discharged. Imp. Act, s. 61.

ity.

If the person who has accepted a bill in his own name at maturity, is the holder in his capacity of executor, administrator, trustee, assignee, tutor, curator, or the like, the bill is not discharged. Such a bill he would need to hold "in his own right" in order that it might be discharged under the present section.

If the acceptor becomes the holder of the bill before § 60. its maturity it is not discharged, but he may re-issue and further negotiate it; but he is not entitled to enforce payment of it against any intervening party to whom he was previously liable: section 37. When a bill is discharged, all rights of action on it are extinguished; it ceases to be a bill.

At common law if the acceptor or maker became the administrator of the holder, the bill or note was not discharged; but if he became the executor of the holder, it was discharged, though he had to account for the amount of it as assets: Freakley v. Fox, 9 B. & C. 130 (1829). The discharge of the bill freed the indorsers: Jenkins v. McKenzie, 6 U. C. Q. B. 544 (1849); Lowe v. Peskett, 16 C. B. 500 (1855).

The principle of this section is what is known in the Confusion. civil law as "confusion." The law of Quebec on the subject is contained in the following Articles of the Civil Code:"1198. When the qualities of creditor and debtor are united in the same person, there arises a confusion which extinguishes the obligation.-1199. The confusion which takes place by the concurrence of the qualities of creditor and principal debtor in the same person, avails the sureties." It only takes place when the person is both creditor and debtor personally, in his own right, or when he is both debtor and creditor in the same capacity or quality.

If a bill, accepted by two or more joint acceptors, is held by one of them at or after maturity, it is discharged; but such acceptor does not thereby lose his recourse or right of contribution against his co-acceptors: Harmer v. Steele, 4 Ex. 1 (1849). See Neale v. Turton, 4 Bing at p. 151 (1827).

waiver as

61. When the holder of a bill at or after matu- Express rity, absolutely and unconditionally renounces his against

M'C.B.E.A.-23

acceptor.

§ 61. rights against the acceptor, the bill is discharged : the renunciation must be in writing, unless the bill

by partial

is delivered up to the acceptor.

Imp. Act, s. 62, (1).

The principle of this section in allowing a bill to be discharged by accord alone, without satisfaction, is contrary to the ordinary rule of the common law with respect to contracts. It was embodied in the law merchant from the civil law. In French law it is called remise: Pothier, Change, No. 176; Nouguier, §§ 1043-1052.

In England an express renunciation by parol was formerly sufficient: Dingwall v. Dunster, 1 Dougl. 247 (1779); Whatley v. Tricker, 1 Camp. 35 (1807); Foster v. Dawber, 6 Ex.at p. 851 (1851). The clause making a writing necessary was inserted in the Imperial Act from the Scotch law.

Discharge Where there is a payment of a sum less than the amount payment. of the bill, the bill may in Quebec or Ontario, be discharged under the provisions of the present section; or, it may be considered as discharged by payment under section 59. This was always the rule of the civil law; and it has been in effect adopted in Ontario by R. S. O. c. 44, s. 53, s-s. 7, which altered the rule of the common law as to accord and satisfaction, and provides that "part performance of an obligation, either before or after a breach thereof, when expressly accepted by the creditor in satisfaction, or rendered. in pursuance of an agreement for that purpose, though without any new consideration, shall be held to extinguish the obligation." In any of the other provinces where the common law rule is still in force, part payment would only operate as a discharge when the conditions of the present section are complied with.

The bill is discharged only when the renunciation by the acceptor is at or after maturity, and when it is absolute and unconditional. For the consideration of the questions that

may arise, where the holder reserves his rights against § 61. other parties to the bill, see the notes on the following sub-section.

Discharge

waiver.

2. The liabilities of any party to a bill may in of party by like manner be renounced by the holder before, at or after its maturity; but nothing in this section shall affect the rights of a holder in due course without notice of renunciation: Imp. Act, s 62 (2).

"In like manner."-That is, absolutely and unconditionally; and in writing, unless the bill is delivered up.

If the acceptor or any other party to a bill is discharged by the holder before maturity, and no entry be made of it upon the bill, and it come into the hands of a bona fide holder for value before maturity without notice, the party so released would be liable to him.

Principal and Surety.-Where the parties to a bill stand in the relation of principal and surety to each other, the nature of the renunciation of his rights by the holder against the party who stands in the relation of principal to other parties, becomes a matter of great importance. The question arises most frequently in connection with composition and discharge, or the granting of time by taking a renewal.

law.

At common law where parties to a bill stand in the At common relation of principal and surety to each other, if the holder, being aware of the fact, grants a discharge to the principal debtor or gives him time, the sureties are discharged, unless the holder has expressly reserved his rights againstthe sureties, or has reserved their rights against the principal debtor: Owen v. Homan, 4 H. L. Cas. 997 (1853); Oriental Corporation v. Overend, L. R. 7 Ch. 142 (1871); Polak v. Everett, 1 Q. B. D. at p. 678 (1876); Munster &