Accommodation paper is now governed by the same rules as other paper. This is the latest and the best

v. Reynolds, 2 Adol. & Ellis, N. S. 195. So, if a bank pay a forged check, the holder being innocent, the bank must bear the loss; and on the same principle the bank is bound to know the hand of its own customers, and a want of due diligence and caution exists. Levy v. Bank U. S., 1 Binney, 27. Smith v. Mercer, 6 Taunton, 76. Bank of St. Albans v. F. & M. Bank, 1 Shaw's Vermont Rep. N. S. 141. The courts consider the case of Price v. Neal as decisive. So, payment to a bank innocently in its own forged paper, binds the bank. It is bound to know its own paper. U. S. Bank v. Bank of Georgia, 10 Wheaton, 333. On the other hand the general rule is, that payment of a debt in a forged note, both parties being innocent, is no payment, and the same rule applies if a forged note be discounted. Markle v. Hatfield, 2 Johns. Rep. 455. Young v. Adams, 6 Mass. Rep. 182. Eagle Bank v. Smith, 5 Conn. Rep. 71. Jones v. Ryde, 5 Taunton, 488. United States Bank v. Bank of Georgia, 10 Wheaton, 333. Canal Bank v. Bank of Albany, 1 Hill's N. Y. Rep. 287. In this last case the plaintiffs paid a draft, when the name of the payee or first endorser was forged, and the defendants were held bound to refund, as they had no title to the instrument or money obtained under it. None but the payee can assert any title to a negotiable bill or note, without his endorsement. But the loser cannot recover back, unless he uses diligence to detect the forgery, and give notice, and there be no unreasonable delay after discovery of the forgery. Gloucester Bank v. Salem Bank, 17 Mass. Rep. 33. Pope & Hickman v. Nance, I Minor's Ala. Rep. 299. Canal Bank v. Bank of Albany, sup. Nor can he recover, if he agrees at the time of the bargain and sale to receive certain notes drawn and endorsed by third persons in payment, for he took the risk. Ellis v. Wild, 6 Mass. Rep. 321. It is held in one case, (Ontario Bank v. Lightbody, 13 Wendell's Rep. 101,) that payment of a debt in bills of an insolvent bank, both parties being ignorant of the fact, is no payment. See, also, Wainwright v. Webster, 11 Vermont R. 576. Gilman v. Peck, ibid. 516. Fogg v. Sawyer, 9 N. H. R. 365. Frontier Bank v. Morse, 22 Maine R. 85, to S. P. But there are decisions in other cases (Lowrey v. Murrell, 2 Porter's Ala. Rep. 280; Scruggs v. Gass, 8 Yerger, 175) directly to the contrary, and the point remains unsettled in our American law. In Bayard v. Shunk, 1 Watts & Serg. 92, the decision agrees with those in the two last cases; and Ch. J. Gibson gives a strong and vigorous opinion, that a payment (not in forged notes, but in current bank notes) discharges the debt, though the notes were of no value, as the bank had previously failed, of which both parties were ignorant. Mr. Justice Story (Story on Bills, p. 248. Story on Promissory Notes, 477,) says, that this disputed point resolves itself more into a question of intent than of law, and that is whether, taking all the circumstances together, the bill was taken as absolute payment by the holder, at his own risk, or only as conditional

doctrine, both in England and in this country.

These

are the strict obligations of the acceptor in relation to the other parties to the bill; and they do not apply in all their extent as between the drawer and the party who endorses or lends his name to the bill as surety for the accommodation of the drawer. In such a case, the party who endorses is not entitled to damages from the drawer beyond what he has actually sustained. If the acceptor alters the bill on acceptance, he vacates it as against the drawer and endorsers; but if the holder acquiesces in such alteration and acceptance, it is a good bill as between the holder and acceptor.c

A third person, after protest for non-acceptance *87 by the drawee, may intervene, and become a

party to the bill, in a collateral way, by accepting and paying the bill for the honour of the drawer, or of

payment, he using due diligence to demand and collect it. And he concludes that the weight of reasoning and authority are in favour of the pay. ment in such cases being considered as null. Story on Promissory Notes, 125. 477. 641.

a Fentum v. Pocock, 5 Taunton, 192. The Governor and Company of the Bank of Ireland v. Beresford, 6 Dow's Parl. Cas. 234. Bank of Montgomery County v. Walker, 9 Serg. & Rawle, 229. Murray v. Judah, 6 Cowen, 484. Clopper v. The Union Bank of Maryland, 7 Harr. & Johns. 92. Church v. Barlow, 9 Pick. 547. Grant v. Ellicot, 7 Wendell, 227. Marr v. Johnson, 9 Yerger, 1. Wilde, J., in Comm. Bank v. Cunningham, 24 Pick. 274. Indorsers for the accommodation of the maker of a note, do not stand in the relation of co-sureties to each other, so as to create between them a liability to contribution, though they may engage between themselves for contribution. Aiken v. Barkley, 2 Speer's S. C. Rep. 747. It is also settled that the drawer is not entitled to notice of non-payment by the acceptor, if the bill was accepted merely for his accommodation. Story on Bills, pp. 310, 311, 312. But as the making of accommodation endorsements is out of the scope of the partnership business in a mercantile house, they are not binding upon it, unless done with the express or implied assent of all the members of the firm, except where the paper comes into the hands of a bona fide holder. Austin v. Vandermart, 4 Hill's N. Y. Rep. 259.

Dorsey v. his Creditors, 19 Martin's Louis. Rep. 498.

• Paton v. Winter, 1 Taunton, 420.

a particular endorser. His acceptance is termed an acceptance supra protest, and he subjects himself to the same obligations as if the bill had been directed to him; but the bill must be duly presented to the drawee at maturity, and if not paid, it must be duly protested for non-payment, and due notice given to the acceptor supra protest, to make his liabilities as such acceptor absolute. He has his remedy against the person for whose honour he accepted, and against all the parties who stand prior to that person, on giving due notice of the dishonour of the bill. If he takes up the bill for the honour of the endorser, he stands in the light of an endorsee paying full value for the bill, and has the same remedies to which an endorsee would be entitled against all prior parties, and he can, of course, sue the drawer and endorser." The acceptance supra protest is good, though it be done at the request, and under the guaranty of the drawee, after his refusal, and the party for whose honour it is paid is equally liable. The policy of the rule granting these privileges to the acceptor supra protest, is to induce the friends of the drawer or endorser to render

• Mulford v. Walcott, 1 Lord Raym. 574. Mertens v. Winnington, 1 Esp. N. P. Rep. 112. Bayley on Bills, 209. Story on Bills, 134, 135, 136. 529. Goodall v. Felhill, 1 Manning, Granger & Scott, 233. The rights and remedies growing out of acceptances supra protest, are equally recognised in the foreign commercial law of Europe; and the authorities for that purpose, such as Stracca, Heineccius, Pothier, Pardessus and the French Ordinances, are referred to in Mr. Justice Story's thorough treatise. The person who pays a protested bill supra protest, for the honour of the endorser, has no remedy against the endorser, if the latter was already discharged by reason of the want of notice of the non-acceptance. Chitty on Bills, 213. 4. 234. 257. 330. Higgins v. Morrison, 4 Dana's Ken. Rep. 102. The payer supra protest must give reasonable notice to the party that he has made such payment for his credit, otherwise that party will not be obliged to refund. Wood v. Pugh and others, 7 Ohio Rep. part 2, 164. He cannot sue the drawer without proving demand on the drawee, and non-acceptance or non-payment by him, and notice to the drawer. Baring v. Clark, 19 Pick. R. 220.

Konig v. Bayard, 1 Peters' U. S. Rep. 250.

them this service, for the benefit of commerce and the credit of the trader, and a third person interposes only when the drawee will not accept. There can be no other acceptor after a general acceptance by the drawee. A third person may become liable on his collateral undertaking, as guarantying the credit of the drawee, but he will not be liable in the character of acceptor. It is said, however, that when the bill has been accepted supra protest, for the honour of one party to the bill, it may, by another individual, be accepted supra protest, for the honour of another. The holder is not bound to take an acceptance supra protest,b but he would

be bound to accept an offer to pay, supra protest. *88 The protest is necessary, and should precede

the collateral acceptance or payment; and if the bill, on its face, directs a resort to a third person, in case of a refusal by the drawee, such direction becomes part of the contract.d

As between the holder of a check and the endorser, it ought to be presented for acceptance with due diligence; but as between the holder and the drawer, a

a Beawes, tit. Bills of Exchange, pl. 42. Jackson v. Hudson, 2 Campb. 447.

Mitford v. Walcot, 12 Mod. Rep. 410.

• Pothier, h. t. pl. 170.

a Pothier, h. t. pl. 137. Holland v. Pierce, 14 Martin's Louis. Rep. 499. An acceptance for honour is not an absolute, but a conditional acceptance, and an averment of presentment to the drawee for payment is necessary. Williams v. Germaine, 7 Barnw. & Cress. 468. This acceptance supra protest does not apply by the commercial law to promissory notes. Story on Promissory Notes, 557.

• Rickford v. Ridge, 2 Campb. 537. Beeching v. Gower, 1 Holt, 313, note of the reporter. Clark v. Stackhouse, 2 Martin's Louis. Rep. 327. Mohawk Bank v. Broderick, 10 Wendell, 304. Mohawk Bank v. Broderick, 13 Wendell, 133. Parke, B., 9 Meeson & Co. 18. Where the parties resided in the same place, six days delay was held to discharge the endorser. Gough v. Staats, ibid. 549. In Bodington v. Schlencher, 1 Neville & Manning, 540. S. C. 4 B. & Adol. 752, it was held, that the holder was bound to present

demand at any time before suit brought will be sufficient, unless it appears that the drawee has failed, or the drawer has, in some other manner, sustained injury by the delay. The drawee ought to accept or refuse acceptance, as soon as he has had a reasonable opportunity to inform his judgment. If he cannot be found at the proper place, the holder may cause the bill to be protested; and if the drawee be dead, the bill may be presented to his executor or administrator.b

(5.) Of the endorsement.

Oct.

A valid transfer may be made by the payee, or his agent, and the endorsement is an implied contract that the endorser has a good title, and that the antecedent names are genuine, that the bill or note shall be duly honoured or paid, and if not, that he will, on due protest and notice, take it up. In the case of a bill made or endorsed to a feme covert, or to a feme sole, who afterwards

March 26

icar 25

it for payment on the day following that on which he receives it. Moule v. Brown, 4 Bingham, N. C. 266. Smith v. Janes, 20 Wendell, 192. S. P. If a check be received, say on Monday, the holder may present it at any time during banking hours on Tuesday. But if he pays it to his own banker on Tuesday, that banker, as his agent, must present it to the drawee on Tuesday, and has not till Wednesday to present it. That would be good as to notice of dishonour, but not as to presentment, and as the drawee failed on Wednesday, the holder was in default. Alexander v. Burchfield, 1 Carr. & Marshman, 75. S. C. 7 M. & Granger, 1061. The holder of a check is not entitled, because he passes it through his banker, to one day more for presenting it. The time is the same whether the presentment be made by himself or through his banker, i. e. the day following that in which he receives it.

⚫ Cruger v. Armstrong, 3 Johns. Cas. 5. Rothschild v. Corney, 9 Barnw. & Cress. 388.

Conroy v. Warren, ibid. 259.
Sutherland, J., in Murray v.

Judah, 6 Cowen, 490, and Savage, Ch. J., in Mohawk Bank v. Broderick, 10
Wendell, 306.

↳ Molloy, b. 2. c. 10. sec. 34. Bayley on Bills, 128.

⚫ Ogden v. Saunders, 12 Wheaton, 213. 341. Pardessus Droit. Comm. 2. art. 347. Story on Promissory Notes, 145.