may be relieved of responsibility on such instrument, it follows that the immunities indicated there were intended to exclude all exceptions not contained therein, under the familiar maxim: Expressio unius est exclusio alterius. It is therefore clear, under the well settled rules governing the construction of statutes, that when this act, which, in effect, declares that all persons signing a negotiable instrument shall be liable, whether executed for a valuable consideration or as an accommodation maker, and then specifies the particular manner in which negotiable instruments may be discharged, designating, as an exception thereto, that, when the liability is secondary, it may be avoided by any valid agreement extending the time of payment, etc., without such person's consent, was passed, it was the intention of the legislative assembly to make such provisions exclusive of all others." A similar view was taken in New York by the Appellate Division, First Department, in National Citizens' Bank v. Toplitz (81 App. Div. 593) which, however, was affirmed in the Court of Appeals on other grounds. (178 N. Y. 466.) See also Delaware County Trust Co. v. Title Ins. Co. 199 Pa. St. 17.

§ 202. Right of party who discharges instrument. Where the instrument is paid by a party secondarily liable thereon, it is not discharged; but the party so paying it is remitted to his former rights as regards all prior parties, (a) and he may strike out his own and all subsequent indorsements, and again negotiate the instrument (b), except:

1. Where it is payable to the order of a third person, and has been paid by the drawer; and

2. Where it was made or accepted for accommodation, and has been paid by the party accommodated (c).

(a) The application of this section is necessarily limited to cases where the person secondarily liable can trace his title through the prior parties to the party whom he seeks to hold. If, when remitted to his former rights, he would have no cause of action against any party to the paper, payment by him discharges the instrument. Quimby v. Varnum, 190 Mass. 211.

(b) Where an indorser takes up the instrument, after it has been dishonored, by paying the amount of it to the holder, the transac

tion is in effect a repurchase of the paper, and not a payment of it, and the indorser becomes vested again with all the rights which he formerly had against prior parties. French v. Jarvis, 29 Conn. 347. And the paper retains its negotiable character. Gould v. Eager, 17 Mass. 615; Davis v. Miller, 14 Gratt. 1. And although in the case of accommodation paper the indorsee may not pay actual value at the time of his indorsement, yet if he pays the instrument and gets possession of it he is deemed a holder. Reinhart v. Schall, 69 Md. 352. It is necessary to strike out all subsequent indorsements; for after the paper has once been paid it cannot be negotiated again if such negotiation would make any of the parties liable who would otherwise be discharged. Goodner v. Maynard, 7 Allen, 456; Citizens' Bank v. Say, 80 Va. 436. And by putting the note in circulation again the liability of subsequent parties is not revived. Davis v. Miller, 14 Gratt. 1. A note coming into the hands of the maker under such circumstances as to raise a presumption of its payment cannot be pledged by him as collateral so as to bind a surety, although the note may not have matured at the time of its reissue. First National Bank v. Harris, 7 Wash. 139. Where payment is made by the second indorser, the case is within the provisions of this section. Twelfth Ward Bank v. Brooks, 63 App. Div. (N. Y.) 220. Possession of the paper by an indorser, after its protest for non-payment, is prima facie evidence that he has performed his contract of endorsement, and has paid to the holder the amount due. Hill v. Buchanan, 71 N. J. L. 301. See section 200.

(c) Cottrell v. Watkins, 89 Va. 801. Where the instrument is paid by an accommodation acceptor it is discharged, and becomes commercially dead, but is evidence in the hands of the payer to charge the real debtor. First Nat. Bank v. Maxfield, 83 Me. 576. So, where one of several accommodation makers pays the note, it remains in his hands evidence of his right to contribution from his co-sureties. This right may be assigned by him, and the delivery of the note by him to a third person for a valuable consideration raises a presumption of an intention to pass this right to the transferee. Dillenbeck v. Bygert, 97 N. Y. 303. Where an accommodation indorser for the payee has paid the note he may recover the amount of an accommodation maker. Laubach v. Pursell, 35 N. J. Law, 434. And where a second indorser of a note has paid and taken it up he becomes a holder for value, and may maintain an action to recover the amount

thereof of the first indorser, although both are accommodation indorsers. Kelly v. Burroughs, 102 N. Y. 93. See also Kaschner v. Conklin, 40 Conn. 81. See section 118.

§ 203. Renunciation by holder. The holder may expressly renounce his rights against any party to the instrument, before, at or after its maturity. An absolute and unconditional renunciation of his rights against the prinpal debtor made at or after the maturity of the instrument, discharges the instrument (a). But a renunciation does not affect the rights of a holder in due course without notice. A renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon (b).

(a) In Leask v. Dew, 102 App. Div. (N. Y.) 529, 534, it was said by Hatch, J.: "There is some obscurity in the provisions of our statute. In its first sentence it provides for the renunciation of the rights of the holder against any party to the instrument which may be made before, at or after its maturity. In the second sentence it provides for an absolute and unconditional renunciation of the rights of the holder against the principal debtor at or after the maturity of the instrument, which discharges the instrument. The first relates to the party; the second to the instrument. It is somewhat difficult to see how there could be an absolute discharge of a party to an instrument without discharging the instrument as an obligation so far as he is concerned. We do not clearly perceive why this distinction should have been made." But upon reflection, it will be seen that the distinction is indispensable. If the party in whose favor the renunciation is made is only secondarily liable, then only he and parties subsequent to him are discharged, and the instrument still remains in force as to prior parties. See section 201, subdivision 3. But when the holder renounces his rights against the person primarily liable, then the instrument itself is discharged. The learned judge writing as above-mentioned evidently had in mind the facts of the case before the court, where the maker was the only party to the paper, and he thus failed to note the situation which will arise where there are a number of indorsers. Thus, if a bill drawn by A and accepted by B, should be indorsed

by C and D, a renunciation in favor of D would discharge him only, and a renunciation in favor of C would discharge only C and D; but a renunciation in favor of B, the acceptor, would discharge the instrument.

(b) Baldwin v. Daly, 41 Wash. 416. After a testator's death, there was found among his papers, inclosed in an envelope, a promissory note payable to him and an instrument signed by him and addressed to his executors stating, 66 Gentlemen. The enclosed note I wish to be cancelled in case of my death, and if the law does not allow it, I wish you to notify my heirs that it is my wish and orders:"-Held, that this was not a renunciation within the statute. Leask v. Dew, 102 App. Div. (N. Y.) 529.

§ 204. Cancellation; unintentional; burden of proof.A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative; but where an instrument or any signature thereon appears to have been canceled the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake or without authority (a).

(a) Upon the trial, the signature of the indorser appeared to have been cancelled, and the plaintiff claimed that it was cancelled without authority:- Held, that, under the statute, the burden of showing this was on the plaintiff. McCormick v. Shea, 50 Misc. (N. Y.) 592.

§ 205. Alteration of instrument; effect of. Where a negotiable instrument is materially altered without the assent of all parties liable thereon, it is avoided, except as against a party who has himself made, authorized or assented to the alteration and subsequent indorsers (a). But when an instrument has been materially altered and is in the hands of a holder in due course, not a party to the alteration, he may enforce payment thereof according to its original tenor (b).

(a) See Jeffrey v. Rosenfeld, 179 Mass. 506, where the effect of this provision was discussed, but not decided. The burden of

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explaining an apparent alteration is upon the party producing the paper. Gowdey v. Robbins, 3 App. Div. 353; Ofenstein v. Bryan, 20 App. Cas. D. C. 1; Town of Solon v. Williamsburgh Savings Bank, 114 N. Y. 122, 135; Simpson v. Davis, 119 Mass. 269; Gettysburg National Bank v. Chisolm, 169 Pa. St. 564; Citizen's Nat. Bank v. Williams, 174 Pa. St. 66; Paine v. Edsell, 19 Pa. St. 178. If the paper appears to have been altered he must explain this appearance; but if, on the other hand, however material in fact the alteration may be, there is upon the face of the paper no evidence or mark raising a suspicion thereof, the holder is not called upon to make an explanation or to introduce any testimony until the alteration has been shown by sufficient evidence outside of the paper. Harris v. The Bank of Jacksonville, 20 Fla. 501, 512.

(b) Statute applied in Thorpe v. White, 188 Mass. 333; Moskowitz v. Deutsch, 46 Misc. (N. Y.) 602. See also Willis v. Wilson, 3 Oregon, 308. A note made and dated in Ohio and indorsed in New York was afterwards altered by the payee by adding the words with interest at eight per cent. per annum after due until paid" and after such alteration was discounted by a bank in Cleveland:- Held that the indorsement being a New York contract, the indorser was liable under this section. Colonial Nat. Bank v. Duerr, 108 App. Div. (N. Y.) 215. In Smith v. State Bank, 104 N. Y. Supp. 750, an accommodation indorser was held liable to a bank paying the same for the difference between the check as originally drawn and the amount to which it was raised. But the statute does not apply where the paper never had a legal inception, or where the name of the payee was changed before delivery. First Nat. Bank v. Gridley, 112 App. Div. (N. Y.) 398. The fact that the indorser's name was struck out by his representative in the plaintiff's presence, may be considered in determining whether the cancellation was unauthorized or consented to. McCormick v. Shea, 50 Misc. 592.

This section changes the law in some States. Prior to the statute the rule in many jurisdictions was that where the alteration was made without the consent of the party sought to be charged, there could be no recovery even by an innocent holder for value, and even though he sought to recover on the instrument as it was before the alteration. Gettysburg National Bank v. Chisolm, 169 Pa. St. 564; Hartley v. Carboy, 150 Pa. St. 23; Wood v. Steele, 6 Wall. 80; Citizens' National Bank v.