Discharge of Bill.—Payment in due bill is discharged by pay ment in due course by or on behalf of the drawer or acceptor. " Payment in due course" means payment made at or after the maturity of the bill, to the holder thereof, in good faith and without notice that his title to the bill is defective. When the bill is paid by the drawer or an indorser it is not dis charged ; but (a) where a bill payable to, or to the order of, a third party is paid by the drawer, the drawer may enforce payment thereof against the acceptor, but may not reissue the bill ; (b) where a bill is paid by an indorser, or Where a bill payable to drawer's order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor or antecedent parties, and he may, if he thinks fit, strike out his own and subsequent indorsements, and again negotiate the bill. Where an accommodation bill is paid in due course by the party accommodated the bill is discharged.
Banker a bill payable to order on demand is drawn on a banker, and the latter pays it in good faith and in the ordinary course of business, the banker would not be liable in case the indorse ment has been forged or made without authority.
Acceptor holding at the acceptor is the holder of the bill in his own right at or after maturity, it is discharged. When the holder of a bill at or after its maturity absolutely and unconditionally renounces his rights against the acceptor, the bill is discharged. The renun ciation must be in writing, unless the bill is delivered up to the acceptor. The liabilities of any party to a bill may in like manner be renounced by the holder before, at, or after its maturity ; but all waiver by renunciation is without prejudice to the rights of a holder in due course without notice of the renunciation.
Cancellation.—Intentional apparent cancellation by the holder or his agent discharges the bill, and any party liable thereon is also discharged. In such a case any indorser who would have had a right of recourse against the party whose signature is cancelled is also discharged. Unintentional, mistaken, or unauthorised cancellation is inoperative ; and upon whoever claims the advan tage of an apparent, but disputed cancellation, lies the burden of proof of effective cancellation.
Alteration.—Material alteration without the assent of all parties liable on a bill, avoids the latter except as against a party who has himself made, autho rised, or assented thereto, and subsequent indorsers. But where a bill has been materially altered, the alteration not being apparent, and the bill is in the hands of a holder in due course, such holder may avail himself of the bill as if it had not been altered, and may enforce payment of it according to its original tenor. In particular the following alterations are material, namely,
any alteration of the date, the sum payable, the time of payment, the place of payment, and where a bill has been accepted generally, the addition of a place of payment without the acceptor's assent.
Acceptance and payment for honour.—Acceptance for honour.—Where a bill has been protested for dishonour by non-acceptance, or protested for better security, and is not overdue, any person, not being a party already liable thereon, may, with the consent of the holder, intervene, and accept the bill supra protest, for the honour of any party liable thereon, or for the honour of the person for whose account the bill is drawn. A bill may be accepted for honour for part only of the sum for which it is drawn. Such an acceptance in order to be valid must—(a) be written on the bill, and indicate that it is an acceptance for honour; (b) be signed by the acceptor for honour. Where such an acceptance does not expressly state for whose honour it is made, it is deemed to be an acceptance for the honour of the drawer. Where a bill payable after sight is accepted for honour its maturity is calculated from the date of the noting for non-acceptance, and not from the date of the acceptance for honour. The acceptor for honour, by accept ing, engages to pay the bill on due presentment, according to the tenor of his acceptance, if it is not paid by the drawee, provided it has been duly presented for payment, and protested for non-payment, and that he receives notice of these facts. He is liable to the holder and to all parties to the bill subsequent to the party for whose honour he has accepted. Where a dishonoured bill has been accepted for honour, or contains a reference in case of need, it must be protested for non-payment before it is presented for payment to the acceptor for honour, or referee in case of need. Where the address of the acceptor for honour is in the same place where the bill is protested for non-payment, the bill must be presented to him not later than the following its maturity ; and where the address of the acceptor for honour is in some place other than the place where it was protested for non payment, the bill must be forwarded not later than the day following its maturity for presentment to him. Delay is excused under the same circum stances as delay in presentment for payment or non-presentment for payment. There must be a protest upon dishonour by acceptor for honour.