SECTION 1679-1. A person secondarily liable Discharge on the instrument is discharged:

1. By any act which discharges the instrument;

2. By the intentional cancellation of his signature by the holder;

3. By the discharge of a prior party;

4. By a valid tender of payment made by a prior party;

4a. By giving up or applying to other purposes collateral security applicable to the debt, or, there being in the holder's hands or within his control the means of complete or partial satisfaction, the same are applied to other purposes.

5. By a release of the principal debtor, unless the holder's right of recourse against the party secondarily liable is expressly reserved;

6. By an agreement binding upon the holder to extend the time of payment, or to postpone the holder's right to enforce the instrument unless made with the assent, prior or subsequent, of the party secondarily liable, unless the right of recourse against such party is expressly reserved, or unless he is fully indemnified.

NOTE-Any valid extension of time to the acceptor discharges the drawer. Racine Co. Bk. v. Lathrop, 12 Wis. 519.

One who has signed a note as surety, will not be discharged by an invalid agreement to extend the time of payment to his principal; nor by a valid agreement made by a holder without notice that he is a surety. St. Maries v. Polleys et al., 47 Wis., 67.

An usurious agreement for extension of time of payment may be shown by parol, in a proper case. 47 Wis. Ibid.

Where one issue was whether the time of payments had been extended on the note in suit, the jury was instructed that an agreement to pay a bonus or interest in excess of ten per cent. being illegal, would not constitute a sufficient consideration. Held, that this must be unders.ood of a mere executory agreement, and was correct. Meiswinkle v. Jung, 30 Wis., 361.

Ibid.

One who appears upon the face of a note as having signed it as a joint maker, may show by parol that the creditor knew, when the note was executed, that he was merely a surety, and has since, without his consent, extended time of payment to the principal. Irvine v. Adams, 48 Wis., 468.

Successive agreements by the payee of a note to extend time of payment to the principal for usurious consideration, with successive payments, after the expiration of each time of extension, of the usury stipulated therefor, do not release the surety; there being no suspension of the payee's right to enforce payment of the note. 48 Wis., Ibid.

from secondary liability.

Where, upon the principal maker of a note comprising [compromising] with a part of his creditors, including the surety, the latter treats the amount of the note as an existing obligation of the principal to him, he is estopped to deny his liability to the payee thereon, though the latter was not a party to the compromise. 48 Wis., Ibid.

Payment before due of the interest on a note is a sufficient consideration for an agreement to extend the time for payment of the principal. Grace v. Lynch, 80 Wis., 166.

Where such an agreement is fully executed on the one part by the payment of the interest, it is not within the statute of frauds, though not in writing and not to be performed within a year. Ibid. An extension of the time for payment of a renewal note without the knowledge or consent of one of the makers does not discharge him, although he was merely an accommodation maker of the origi nal note, where the renewal was accepted at his sole request and for his accommodation and benefit alone. First Nat. Bk. v. Jones. 92 Wis.. 36.

If, after learning of an extension of the time for payment of a note, a surety recognizes his liability thereon by giving a collateral note for the debt or in any other way amounting to a promise to pay the same, he remains liable notwithstanding such extension. Ibid.

An agreement to take new notes for those in suit, payable at a later date, neither executed nor on any new consideration, is invalid, and does not release a surety. Jaffray v. Crane, 50 Wis., 349.

An agreement to extend the time of payment of a note past due. "for twenty or thirty days," is a good agreement to extend for a definite period of at least twenty days. Hamilton v. Prouty, 50 Wis., 592.

An agreement of the holder of a note past due, with the maker, to extend the time of payment for a definite period, in consideration of an usurious premium paid in advance, without the knowledge or acquiescence of the indorsers, discharges the latter, 50 Wis., 592.

The words "This note to be extended if desired by makers" indorsed upon a note, are too indefinite to have any legal significance, and the unauthorized addition thereto, by the holders, of the words, "on payment of the interest, as expressed, until January 1, 1879" would not affect the note. Krouskop v. Shontz, 51 Wis., 204.

An agreement upon sufficient consideration, to extend the time of payment of a note "until after threshing" held to be for a time sufficiently definite to give it validity, and work a discharge of the non-assenting surety. Moulton v. Posten, 52 Wis., 169,

The consideration for the alleged extension was a second note then given by the principal promisor in the first note; such seeond note was usurious; and it does not appear that it has ever been Ibid. paid. Held, that there was a valid extension.

Where a new firm, on buying out an old one, undertakes, with the knowledge of a creditor of the old firm, to pay its debts, the members of the old firm not included in the new are thereafter sureties upon the liability so assumed, and will be discharged from liability as such sureties by any extension of time granted without Brill v. Hoile, 33 their consent, by the creditor, to the new firm.

Wis., 537.

An usurious note given by the principal maker of another note to the holder thereof is a sufficient consideration for an extension of the time for payment of the latter. Fay v. Tower, 58 Wis., 286.

Admissions by a surety of his liability upon a note, made in ignorance of the fact that the holder had granted an extension of

the time for its payment, cannot estop him from asserting his release by reason of such extension. Ibid.

The liability of a surety who has been fully indemnified against loss by the principal debtor continues notwithstanding an extension of the time for payment; but the giving of a mortgage to the surety to indemnify him does not, if the mortgage proves worthless, continue his liability. Ibid.

In action by a bank against accommodation indorsers of notes it appeared, among other things, that after maturity thereof, the maker paid interest thereon for ninety-three days in advance. He testified that the plaintiff's cashier had agreed to extend the time of payment if the interest was paid in advance. Upon such payment being made the dates upon the backs of the notes, showing the times when they became due, were changed to the dates to which interest was so paid, and the notes were placed with others becoming due at those times, and no demand of payment was made until about those dates. The cashier testified that he had told the maker that if he wanted an extension he must get new notes indorsed by the same parties, and that he did not intentionally extend the time. The indorsers had no knowledge of and did not consent to any extension. Held, that the evidence did not warrant a verdict against the indorsers, it appearing that there had been an extension which released them. Batavian Bank v. McDonald, 77 Wis., 486.

At the maturity of a note, the maker asked for an extension of time, offering to have his wife sign the note. The payee agreed to grant an extension if a surety on the note would consent. The maker represented that he had seen the surety and knew he would consent, and thereupon his wife signed the note; but the surety when applied to refused his consent to the extension. Afterwards the payee caused judgment to be entered on the note against the maker and his wife and the surety. Held, that by so doing, he was estopped to assert that there was no extension or that there was no consideration for such extension because the note was not valid as against the maker's wife; and that the surety was discharged from liability. Donkle v. Milem, SS Wis., 33.

RELEASING SECURITY.-Where the holder of promissory note, by filing his claim for the amount due thereon in the assignment proceedings of an insolvent indorser, had obtained an interest in or lien on the assets in the hands of the assignee for its payment, which, if enforced, wou.d have satisfied the claim, his subsequent voluntary release of such lien or claim without the consent of a later indorser discharged the latter from his liability on the note. I'lankinton v. Gorman, 93 Wis., 560.

Giving a renewal inuorsement without notice of a misapplication of securities is not a waiver. Price Co. Bk. v. McKenzie, 91 Wis., 658.

SECTION 1679-2. Where the instrument is When paid by secondary paid by a party secondarily liable thereon, it is party. not discharged; but the party so paying it is remitted to his former rights as regards all prior parties, and he may strike out his own and all subsequent indorsements, and again negotiate the instrument, except:

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

Renunciation of rights.

Cancellation by mistake.

Altering of instrument.

2. Where it was made or accepted for accommodation, and has been paid by the party accom modated.

NOTE In an action by the indorser of a bill of exchange (who has been compelled to pay the same) the drawer and acceptor cannot defend on the ground that the bill was given and accepted on an unfulfilled parol condition, as that the payee would surrender a note held by him against a third person. Foster v. Clifford, 44 Wis., 569.

Under the rule of our statute that every action must be prosecuted in the names of the real party in interest, the payee of a promissory note who has transferred the same cannot maintain an action or an attachment for the debt so long as the notes remain in the hands of his assignce, even though, in transferring them, he indorsed them; but in that case, if he afterwards pays and takes them up he is remitted to his original rights. Landauer v. Espenhain, 95 Wis., 169.

SECTION 1679-3. 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 principal debtor made at or after the maturity of the instrument discharges the instrument. 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.

SECTION 1679-4. 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 cancelled the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake or without authority.

SECTION 1679-5. 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, autho rized or assented, orally or in writing, to the alteration and subsequent indorsers. 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.

NOTE Conditional proposal by offering to give another note at different time of payment, is not. Kilkelly v. Martin, 34 Wis., 525. Changing a word "order to "bearer," if it appears to have been done at the time of execution, will not affect the paper. v. Starr, 5 Wis., 534. Otherwise, if made after delivery. alteration is a material one. Union Nat. Bk. v. Roberts, 45 Wis., 373.

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The unauthorized but not fraudulent alteration of a note, made under mistake of right to conform the note to the actual agreement rendering It vold, does not prevent recovery on the original consideration; and a complaint on the note may be amended to claim such recovery. Matteson v. Ellsworth, 33 Wis., 488.

The words "ten per cent. interest if not paid before due," found written on the face of a note when offered in evidence, partly on the same line as the last word in the printed form, and before the signature, and partly on a lower line, held to be a part of the note as it then existed. Kilkelly v. Martin, 34 Wis., 525.

If such words were written after the note was signed by the makers, with the knowledge and consent of the holder, but without the knowledge or consent of the party sought to be charged, the liability of the latter was thereby extinguished. Ibid.

Whatever may be the rule as to sealed instruments, it is well settled that the alteration of an instrument not under seal, made by one party with the other's assent, will not avoid it. An assent to one already made has the same effect as an original grant of authority to make the alteration. Ibid.

An addition of the words "payable annually" after the argeement to pay interest, not made with fraudulent Intent, but to make the note conform to the understanding of the payee of the actual agreement, would bring the case within the Matteson case, supra. But where the note did not show such alteration (it being claimed that it had been erased) and the note appeared fair on its face, the burden of proof as to alteration is upon the maker, or other person who would otherwise be liable. Gorden v. Robertson, 48 Wis., 493. Where, in a printed form used in drawing a promissory note, the words "after due" in the clause relating to interest, have been striken out, apparently with a different ink from that used in filling up the body of the note, so that the general appearance of the instrument raises a suspicion of its genuineness, the party offering it in evidence must explain this appearance by some evidence upon which a jury might find that the words were stricken out before or at the time when the note was made. Page v. Danaker, 43 Wis., 221.

An alteration by a trespasser, against the holder's will, does not affect the paper. Ibid.

Where the principal maker of a note past due, without the knowledge or consent of his sureties to the same, borrows money upon a new note with other sureties, for the purpose of taking up the first note, with the understanding that the first note, when taken up, shall be transferred to such new securities as collateral security, and the money so borrowed is used in fulfilling and satisfying the purpose for which the first note was given, this amounts to a payment of the same, and the sureties thereon are discharged. Greening v. Patten et al., 51 Wis., 146.

The principal maker, by so transferring the first note after its payment, to the new sureties, in consideration of their becoming