6. Effect of acceptance and refusal to accept.— When a bill is accepted, it may be held or may be ne gotiated until it matures. Upon maturity it is pre sented to the acceptor for payment. If he does not pay, the bill is dishonored for non-payment. Notice of dishonor must be given to the drawer and to each indorser, otherwise they are discharged. But when a bill is dishonored by non-acceptance, and notice of dis honor is not given, the rights of a holder in due course subsequent to the omission are not prejudiced by the omission. In the Province of Quebec, whether the bill is an inland or a foreign bill of exchange, it should be protested, to hold the drawer and any indorsers. Elsewhere in Canada only a foreign bill need be pro tested under these circumstances.
7. Drawer's contract.—The drawer is the person who addresses the bill. His contract, as we have seen, is not complete until delivery. The drawer of a bill by drawing it engages that on due presentment it shall be accepted and paid, according to its tenor, and that if it is dishonored he will compensate the holder or any indorser; he is compelled to pay it if the requi site proceedings on dishonor, as we have stated them, are duly taken. When drawing the bill, how ever, he may negative or limit his own liability to the holder, or he may waive as regards himself some or all of the holder's duties; for instance, he may waive no tice and protest. If he stipulates that he will not be liable on the bill, then the holder must look to the ac ceptor alone and to any indorser who may be liable. If he limits his liability as to the amount, he will be liable only to that extent. The drawer very infre quently makes such a stipulation, but as we have else where seen, an indorser very frequently adds to his indorsement the words, "without recourse," "no per sonal liability." The drawer of a bill therefore war rants that there is a drawee who will and can accept.
8. Indorser's indorser of a bill by indorsing it engages that on due presentment it shall be accepted and paid, according to its tenor, and that if it is dishonored he will compensate the holder or a subsequent endorsee, who is compelled to pay it, pro vided that the proper proceedings on dishonor are duly taken. Of course, in the case of an indorser of a note, there is no presentment for acceptance. But to hold the indorser of a bill there must be present ment to the acceptor, as a preliminary. Whether the instrument be a note or a bill, it must be presented for payment on the due date, and if it is dishonored, notice Must be given to the indorser, with protest when necessary, in order to hold the indorser liable. Pay ment by the indorser does not discharge the bill or note. He may again negotiate it by striking out his own and subsequent indorsements, and if it 'is in dorsed to him he must re-indorse.
9. Warranties of an indorser in dorses without qualification, he warrants to all sub sequent holders, and is precluded from denying, the genuineness and regularity of the drawer's signature and all previous indorsements. He is also precluded from denying, and therefore warrants, to his im mediate or a subsequent indorser that the bill was, when he indorsed it, a valid and subsisting bill, and that he had then a good title to it. So when a part ner, having authority to draw and indorse, raised money for firm use by drawing bills in fictitious names, and indorsed them in the firm name, his co-partner was liable to an indorsee. Nor could an accommoda tion indorser 1 in an action by a holder in due course plead that the signature of the maker is forged. It has also been held that the indorser of a note made by a corporation cannot allege that it is ultra vices. When a person indorses "without recourse" or merely transfers or assigns the instrument, he does not warrant that it is valid—he transfers no better rights than he himself has—but he does warrant that he knows of no defect which will invalidate or impair the validity of the instrument. He does not incur the liability of an ordinary indorser.
10. Liability of indorsers among themselves.— When there are two or more indorsements on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved. Each indorser therefore obliges himself to compensate the holder or a subsequent indorser who pays, if the usual formalities upon dishonor have been complied with. An agreement may exist as between the indorsers that they shall not be liable in this order. They may agree upon any order of liability. A bona fide holder may, however, call upon the indorsers for payment in the order of their signatures, even tho he knew, when he took the instrument, that there was an agreement between them that they would be liable in some other Gerstenberg and Hughes give the following example. A bill reads, "Pay to the or der of B $100. A." The following indorsements are found on the back thereof—"Pay to C. B"; "Pay to E without recourse. D"; "E." At maturity the bill is presented by the holder, F, and A refuses to pay. F notifies all the indorsers. He may sue any or all of them except D, unless there is a breach of one of the implied warranties spoken of in the previous section. If he recovers from E, E may recover from C, B or A. B may recover from A. It is usual for a holder who has a mature unpaid instrument to join all parties liable on the instrument as defendants in one ' suit.