wherefore I now, in the presence of G. H. and J. K., the said Bill of Exchange do protest N.B.-The Bill itself should be annexed, or a copy of the Bill, and all that is written thereon should be underwritten On the Order of Liability of the Parties to a Bill or Note 339. The parties on a Bill are never, and the parties on a Note are very frequently not, liable in an equal degree In a Bill the acceptor, and in a Note the maker, is the principal debtor, liable always and in any case to the holder; the drawee of the bill or the payee of the note, and the indorsers in either case, are only sureties, liable only to pay on certain conditions and a release of the debt to the principal is in all cases a discharge to the sureties : Each party in succession is a principal debtor to the holder, and the subsequent parties are his sureties Thus the acceptor or maker is the principal debtor to the holder; and the drawer, or payee, and the indorsers are his sureties Between the holder and the drawee or payee and subsequent indorsers, the drawee or payee is the principal debtor, and the indorsers are his sureties So the first indorser is a principal debtor to the holder, and the subsequent indorsers are his sureties; and so on in succession Where the payee is a different person from the drawer he stands in the position of first indorsee of a bill payable to drawer's order Claridge v. Dalton, 4 M. & S., 226 340. A discharge to any party is a discharge to all subsequent parties, because they are merely his sureties but a discharge to a surety is no discharge to a principal Smith v. Knox, 3 Esp., 46. Claridge v. Dalton, 4 M. & S., 226. 341. If the holder of a bill has notice that it is an accommodation bill and given without value to the drawer he must consider the drawer as his principal debtor, and the acceptor as his surety Davies v. Stainbank, 6 De G. M. & G., 679. Bailey v. Edwards, 4 B. & S., 671 342. "Every person who being surety for the debt or duty of another, or being liable with another for any debt or duty, shall pay such debt, or perform such duty, shall be entitled to have assigned to him, or to a trustee for him, every judgment, specialty, or other security which shall be held by the creditor in respect of such debt or duty, whether such judgment, specialty, or other security shall or shall not be deemed at law to have been satisfied by the payment of the debt or the performance of the duty; and such person shall be entitled to stand in the place of the creditor, and to use all the remedies, and, if need be, and upon a proper indemnity, to use the name of the creditor in any action or other proceeding at law or in equity, in order to obtain from the principal debtor, or any co-surety, co-contractor, or co-debtor, as the case may be, indemnification for the advances made and loss sustained by the person who shall have so paid such debt or performed such duty and such payment or performance so made by such surety shall not be pleadable in bar of any such action or other proceeding by him: provided always that no co-surety, co-contractor, or co-debtor shall be entitled to receive from any other co-surety, co-contractor, or co-debtor, by the means aforesaid, more than the just proportion to which, as between those parties themselves, such last-mentioned person shall be justly liable " 19 & 20 Vict. (1856), c. 97., s. 5 343. In a joint and several note one party is frequently the principal and the others the sureties Evidence may be given that the holder has possession of the instrument with this knowledge: and therefore he must deal with the parties as principal and sureties Pooley v. Harradine, 7 E. & B., 431. Taylor v. Burgess, 5 H. & N., 1. Mutual Loan Fund Asso. v. Sudlow, 28 L. J., C. P., 108. Rayner v. Fussey, 28 L. J., Ex., 132. Greenough v. McClelland, 30 344. A legal agreement founded upon a good consideration to give the principal debtor time to pay, or taking a new bill from him in lieu of the former one, without the consent of all the sureties, will discharge them Unless the agreement contains a stipulation that the holder shall, on default, have judgment at as early a period as if he had sued him (a) Moss v. Hall, 5 Exch. 46. Gould v. Robson, 8 East., 576. Pooley v. Harradine, 7 E. & B., 431. Taylor v. Burgess, 5 H. & N., 1. Michael v. Myers, 6 M. & G., 702 (b) Kennard v. Knott, 4 M. & G., 474. Hall v. Cole, 4 A. & E., 577. Price v. Edmunds, 10 B. & C., 578. Hulme v. Collins, 2 Sim., 12 345. But a mere forbearance to sue; or a promise not to sue; or an offer to give time not acted upon; is no discharge to the sureties, because it is a nudum pactum revocable at will Philpot v. Briant, 4 Bing., 717. Bell v. Banks, 3 Scott, N. R., 497. Hewet v. Goodrick, 2 C. & P., 468. Badnall v. Samuel, 3 Price, 521. Walwyn v. St. Quentin, 1 B. & P., 652 346. So, if the creditor takes a new bill, or other security, as a mere collateral security, and in addition to and not in lieu or substitution of the old one, the sureties are not discharged Pring v. Clarkson, 1 B. & C., 14. Twopenny v. Young, 3 B. & C., 208. Bedford v. Deakin, 2 B. & Ald., 210. Bell v. Banks, 3 M. & G., 258 347. If the acceptor or any party is discharged by operation of law, as by the Bankrupt Act, it does not discharge the sureties Browne v. Carr, 7 Bing., 508. Langdale v. Parry, 2 D. & R., 337. Nadin v. Battie, 5 East., 147 348. So, if the creditor expressly agrees with the principal debtor that the sureties shall not be discharged, they are not 349. If the creditor agrees with the principal debtor to give time to the surety, the surety is discharged Oriental Financial Co. v. Overend, Gurney & Co., L. R., 17 Ch., Ap. 142 On Foreign Bills, and Bills drawn in Sets, Parts, or Copies 350.* 1. Where a bill is drawn in a set, each part of the set being numbered, and containing a reference to the other parts, the whole of the parts constitute one bill 2. Where the holder of a set indorses two or more parts to different persons, he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed, as if the said parts were separate bills 3. Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first accrues is as between such holders deemed the true owner of the bill; but nothing in this sub-section shall affect the rights of a person who in due course accepts or pays the part first presented to him 4. The acceptance may be written on any part, and it must be written on one part only If the drawee accepts more than one part, and such accepted parts get into the hands of different holders in due course, he is liable on every such part as if it were a separate bill 5. When the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be delivered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereof 6. Subject to the preceding rules, where any one part of a bill drawn in a set is discharged by payment, or otherwise, the whole bill is discharged 351. Every transferor ought to deliver over to his transferee all the parts in his possession: but if a subsequent transferee takes one part from his transferor without demanding the remaining parts, he cannot sue an indorser prior to his own who has not got them Pinard v. Klockman, 3 B. & S., 388 352. If the drawee pays one part of the bill with a forged indorsement, he is still liable to pay the real holder of another part Cheap v. Harley, 3 T. R., 127 353. If a foreign bill is refused acceptance or payment, it is necessary, in order to charge the drawer, to have it protested (a) But a protest is not necessary on a foreign promissory note (b) (a) Borough v. Perkins, 2 Ld. Raym., 993. Rogers v. Stephens, 2 T. R., 713. Gale v. Walsh, 5 T. R., 329. Orr v. Maginnis, 7 East., 359. Vandewall v. Tyrrell, M. & Mal., 87. Geralopulo v. Wieler, 10 C. B., 690 (b) Bonar v. Mitchell, 5 Ex., 415 Conflict of Laws 354. Where a bill drawn in one country is negotiated, accepted, or payable in another, the rights, duties, and liabilities of the parties thereto are determined as follows: 1. The validity of a bill as regards requisites in form is determined by the law of the place of issue, and the validity as regards requisites in form of the supervening contracts, such as acceptance, or indorsement, or acceptance supra protest, is determined by the law of the place where such contract was made Provided that (a) Where a bill is issued out of the United Kingdom it is not invalid by reason only that it is not stamped in accordance with the law of the place of issue: (b) Where a bill, issued out of the United Kingdom, conforms, as regards requisites in form, to the law of the United Kingdom, it may, for the purpose of enforcing payment thereof, be treated as valid as between all persons who negotiate, hold, or become parties to it in the United Kingdom 2. Subject to the provisions of this Act, the interpretation of the drawing, indorsement, acceptance, or acceptance supra protest of a bill, is determined by the law of the place where such contract is made Provided that where an inland bill is indorsed in a foreign country, the indorsement shall, as regards the payer, be interpreted according to the law of the United Kingdom 3. The duties of the holder with respect to presentment for acceptance or payment, and the necessity for or sufficiency of a protest, or notice of dishonour, or otherwise, are determined by the law of the place where the act is done or the bill is dishonoured |