ment of a debt. [See Collateral Security, Chapters 13 and 18.] When one really gives a valuable consideration for such paper, probably even though he knows it to be accommodation paper, he can recover its face value, though he paid much less for it.

Defences Against Suit on Commercial Paper.

There are certain defences which may be made by any party who is sued on commercial paper.

No Consideration.

If the defendant can show by sufficient evidence that the holder of the paper gave no consideration for it-that he is not a holder for value-this is, as has already been shown, a good defence.

Notice of Equities.

As has also been stated before, it is a sufficient defence to show that the holder knew, or ought, from the circumstances of the case, to have known, some fact or facts in regard to the note or bill which would have been a good defence against the original payee, if he had himself sued on it; that is, that the plaintiff is "affected with notice of equities," and therefore is not a bona fide holder.

Stolen Note.

Thus if, after a note has been regularly made and delivered, it is stolen from some holder, and put into circulation, and subsequently comes into the hands of a party who knew it to have been stolen, he is not a bona fide holder, and cannot maintain suit on the note against the maker or any indorser. But a bona fide holder may maintain suit on such a note.

Note Stolen Before Delivery.

But if the note was stolen from the maker, without the latter's negligence, before it was ever delivered by him, it is not, in fact, a note at all, delivery being, it will be remembered, an essential of the very life of a note. So if such a stolen paper gets into circulation, no one, however ignorant he may be of this fact, and though he may have given full value for the note, can maintain suit against the maker thereon.

Forged Note.

So if the note is forged, it has no life, and the one whose name is signed cannot be compelled to pay it. One should always be very cautious in taking paper if not familiar with the handwriting of the maker; and even when familiar with it, should keep the name and address of the party from whom he receives the paper, whether the latter indorses it, or merely transfers it; for if the note proves void for any reason, the holder may sue the party from whom he received it, and recover back the money which he actually paid for it, and this defendant may in turn sue the one from whom he received it and recover back what he paid. None of the indorsers are liable, of course, as indorsers, but each is liable for the money which he has received, to the individual from whom he received it. There are occasional cases, where a note or bill had its origin in fraud, and is therefore utterly void.

Notes or Bills Void by Statute.

Sometimes statutes are passed making notes or bills absolutely void which are given in defiance of some law of the state; and in this case, such bill or note is worthless (as commercial paper), in any hands

into which it comes. Thus in some states as has already been stated, bills or notes are void for usury. [See Abstracts, Title, "Interest".]

Material Alteration.

A plea that the paper has been altered since it was first delivered, may also be a good defense. After a bill, note, or check is once drawn, it should never be altered in the slightest degree. It is true that an alteration made to correct an actual mistake, does not injure the paper. But it is also true that any

material alteration, not made to correct a mistake, renders the paper utterly worthless in any hands; and such a material alteration is any change in the amount, the interest, the date, place of payment or names.

In some cases, where paper is thus destroyed, without the fault of the holder, he may recover back the sum he paid for it. But it is exceedingly unsafe to make any alteration whatever in commercial paper, and care should also be taken by the party issuing it, to prevent any subsequent alteration or forgery. This is the reason why it is customary, in writing checks, to draw a line with the pen through the portion of the blank left for the amount which is not filled in nam. ing the sum; for otherwise some one might fill up the blank space by words increasing it.

Thus if the check be drawn for "fifty dollars," and a blank be left before these words, the other words "one hundred and," might be inserted.

Overdue Paper.

Another matter important to be remembered is, that it is never safe to take commercial paper after the date on which it has matured. After this date has

passed, the paper is said to be "overdue;" and although overdue paper may be taken, and sued on by the one who thus takes it, and the maker may be compelled to pay it if he can put in no defense, such a suit is open to any defense which might have been set up by the maker against the original payee, had he kept and sued on the note himself.

Although one who takes an overdue note may be, in every other respect, bona fide, and may have given value for it, these facts will not now protect him, if there was originally any good defense to the note.

As regards the indorsers, their liability entirely ceases upon maturity of the note. If it is not presented to the maker at maturity, dishonored by him, and due notice of such presentment and dishonor sent promptly to them, they are forever discharged from all responsibility thereon.

When one pays a note or bill he should always destroy it at once, either by tearing or burning it, or by writing something across its face, so that it can by no possibility get into the market again; for if he does not thus "kill" the paper, it may get into circulation by being stolen or otherwise, and come into the hands of some holder who is ignorant of the state of affairs, and who may actually compel the maker to pay it a second time. Even if repayment could not be compelled, he would have to stand the expense of a suit. One should then, always insist upon having the note or bill returned when payment is made thereon, never trusting to any statement of the holder, that he will destroy it when he gets home, etc. He cannot compel payment at all, unless he actually presents the note or bill itself for payment.

CHAPTER XIII.

GUARANTY--SURETYSHIP-BONDS.

Guaranty Defined-Distinctions Between Guaranty and Suretyship-Guaranty or Suretyship Must Usually be Written-Alteration of the Contract Discharges Guarantor-Guaranty or Surety on a Promissory Note-Rights of a Guarantor or Surety-Consid eration for a Guaranty-Negotiability of Guaranty-Surety's Responsibility—Bond Defined-Sureties or Collateral Security on Bonds.

Guaranty Defined.

A guaranty is a promise to pay another's debt, or to do any act to which another has bound himself, in case the latter does not himself pay the debt or do the act specified.

Distinction Between Guaranty and Suretyship.

A guaranty differs materially from a suretyship, though principally in this important point; that while a guarantor's promise cannot be enforced until the party for whom he guaranteed absolutely fails to keep his contract-a surety's promise binds him equally and immediately with his principal, so that, without any attempt to first secure performance from the latter, the surety may be sued, either alone, or jointly with his principal in the same suit.

Thus A and B make a contract by which A agrees