aware of the fact at the time he indorsed the instrument; (2) where the indorser is the person to whom the instrument is presented for payment; (3) where the instrument was made or ac cepted for his accommodation.

C. S., s. 3097; Rev., s. 2265; 1899, c. 733, s. 115.

Bills and Notes § 414. Although at the time of the indorsement of a note, the indorsers had reason to believe, and did believe, that the note would not be paid by the maker, this circumstance does not dispense with the necessity of a due notice.-Denny v. Palmer, 27 N. C. 610.

But a drawer of a bill, who has no funds in the hands of the drawee, is liable without notice on the ground of fraud. If a note is made for the accommodation of the payee, and he receives the money for it, he is not entitled to notice. If a maker of a note places effects in the hands of the indorser to meet the note, the latter is not entitled to notice.-Ibid.

434. Notice of nonpayment where acceptance refused. Where due notice of dishonor by nonacceptance has been given, notice of a subsequent dishonor by nonpayment is not necessary unless in the meantime the instrument has been accepted.

C. S., s. 3098; Rev., s. 2266; 1899, c. 733, s. 116.

435. Effect of omission to give notice of nonacceptance. omission to give notice of dishonor by nonacceptance does not prejudice the rights of a holder in due course subsequent to the omission.

C. S., s. 3099; Rev., s. 2267; 1899, c. 733, s. 117.

436. When protest need not be made; when it must be made. Where any negotiable instrument has been dishonored, it may be protested for nonacceptance or nonpayment as the case may be, but protest is not required except in the case of foreign bills of exchange.

C. S., s. 3100; Rev., s. 2268; 1899, c. 733, s. 118.

Bills and Notes § 411. In the case of an inland bill protest is not neces sary but notice of dishonor must be given with the same promptness as of a protest.-Nat. Bank of Asheville v. Bradley, 117 N. C. 526, 23 S. E. 455.

Bills and Notes §411. Protest is not necessary to fix the drawee and indorsers of inland bills of exchange with liability, although it is necessary in the case of foreign bills.-Shaw Bros. v. MeNeill, 95 N. C. 535.

NOTE: It is lawful for a note or bond to provide for waiver of protest and of notice of nonpayment, dishonor and protest, and for waiver of all other notices required by law to be given to sureties and indorsers. The note may also lawfully contain the consent of makers, sureties and indorsers to remain bound for the payment of the note and interest so long as any part thereof may remain unpaid; notwithstanding any extension of time or indulgence which may be granted by payee or assigns to the maker thereof. A clause may be inserted giving the consent of makers and indorsers to any such extensions of time for payment of note, or other indulgences, as may thereafter be granted to the maker of said note. Our courts have upheld all these clauses.

But there are three clauses sometimes inserted in a note or bond, which are distinctly objectionable. They are waiver of homestead and personal property exemption; agreement to pay attorney's fees; and agreement to consent to entry of judgment. None of these clauses should be included in any note made or negotiated in this state. They are not only void and unenforceable in court, but there are other incidents which make the use of these clauses wholly undesirable.

437. How instrument discharged. A negotiable instrument is discharged (1) by payment in due course by or on behalf of the principal debtor; (2) by payment in due course by the party accommodated, where the instrument is made or accepted for accommodation; (3) by the intentional cancellation thereof by the holder; (4) by any other act which will discharge a simple contract for the payment of money; (5) when the principal debtor becomes the holder of the instrument at or after maturity in his own right.

C. S., s. 3101; Rev., s. 2269; 1899, c. 733, s. 119.

Bills and Notes § 437. Giving up a note to the maker, to be destroyed, held as complete a discharge of his liability as if he had paid it in money. -Miller v. Tharel, 75 N. C. 148.

438. Discharge of person secondarily liable. A person secondarily liable 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; (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 any agreement binding upon the holder to extend the time. of payment or to postpone the holder's right to enforce the instru ment, unless made with the assent of the party secondarily liable or unless the right of recourse against such party is expressly reserved.

C. S., s. 3102; Rev., s. 2270; 1899, c. 733, s. 120.

Bills and Notes § 437. In an action upon a negotiable instrument the defendants on its face being joint makers, the mere fact that the plaintiff had told one of the defendants, without the knowledge of the other, "that he would take up and carry the note until fall," is not an extension of payment for a fixed and definite period," which would operate as a release to such other from liability.-Roberson-Ruffin Co. v. Spain, 173 N. C. 23, 91 S. E. 361.

Bills and Notes § 491. Where one whose name appeared on a note admitted execution and nonpayment, the burden is upon him to prove any matter in release.-Ibid.

Bills and Notes § 437. There is no implied authority given to a cashier

of a bank, by virtue of his office, to release, without consideration, one of the joint makers from his liability on a note given to the bank; and when it is shown that the cashier agreed that if one of the two makers of a partnership note paid a certain amount upon a well-secured note given by the other individually to the bank, such other maker would be released from all liability on the joint note sued on, the transaction is without consid eration and the bank is not bound thereby.-Nat. Bank of Lumberton v. Lennon, 170 N. C. 10, 86 S. E. 715.

Bills and Notes § 430. Renewal note is not payment of original indebtedness, unless so intended.-Nat. Bank of Graham v. Hall, 174 N. C. 477, 93 S. E. 981.

Bills and Notes § 396. One indorsing note in blank before delivery without indicating his intention to be bound otherwise, is an "indorser" who, not being given notice of nonpayment and dishonor, is discharged.-J. W. Perry Co. v Taylor Bros., 148 N. C. 362, 62 S. E. 423.

Bills and Notes § 256. Surrender of collateral deposited with the holder by the maker of a note to secure it, without the consent of an accommodation indorser, operates to release the indorser pro tanto.-Bank of Fayetteville v. Nimocks, 124 N. C. 352, 32 S. E. 717.

Principal and Surety § 115. Where plaintiffs either owning or having a lien on vehicles in bankrupt 's possession, the value of which largely exceeded renewal notes given for the price on which defendants were sureties, voluntarily discharged the lien and released the vehicles to bankrupt's trus tee, defendants were discharged from liability on the notes.-Brown Carriage Co. v. Dowd, 155 N. C. 307, 71 S. E. 721.

Bills and Notes § 437. Agreement by holder of note with maker and with others by which he was to credit payment of the balance by such other parties, under which he withheld a deed executed to one of the parties until payment of that party's share, held not to amount to a discharge of the maker before payment as agreed.-Ponder v. Green, 161 N. C. 50, 76 S. E. 632.

439. Right of party paying instrument. When 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, 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 the 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. S., s. 3103; Rev., s. 2271; 1899, c. 733, s. 121.

Bills and Notes § 440. The person secondarily liable may pay the note and sue the principal, or give notice to the holder to sue.-Roberson-Ruffin Co. v. Spain, 173 N. C. 23, 91 S. E. 361.

Bills and Notes § 440. The maker of a note who has paid it becomes the owner thereof and is entitled to its possession, as between the immediate parties, and may maintain his action therefor.-Walter v. Earnhardt, 171 N. C. 731, 88 S. E. 753.

Bills and Notes § 440. An indorser who pays off and discharges the note

of his principal can only recover from the latter the amount actually paid by him.-Pace v. Robertson, 65 N. C. 550.

440. 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 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. C. S., s. 3104; Rev., s. 2272; 1899, c. 733, s. 122.

441. Unintentional cancellation; 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. C. S., s. 3105; Rev., s. 2273; 1899, c. 733, s. 123.

442. Effect of alteration of instrument. 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. 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.

C. S., s. 3106; Rev., s. 2274; 1899, c. 733, s. 124.

Bills and Notes § 378. The legal acceptation of the term "an alteration in writing" implies a change made after its execution, and while an erasure or interlineation may be an alteration, it is not such if made before the final execution of the writing.-Wicker v. Jones, 159 N. C. 102, 74 S. E. 801.

Bills and Notes § 378. The addition of the words "at ten per cent" to a bond without consent of the parties thereto, is a material alteration and vacates the same; and where such alteration is made, a presumption of fraud arises and remains until rebutted.-Long v. Mason, 84 N. C. 16.

Bills and Notes § 378. The alteration of a bill or note in a material part vacates the bill or note, except as between the parties consenting to such alteration.-Davis v. Coleman, 29 N. C. 424.

Bills and Notes § 378. Cutting off the name of one of the makers of a promissory note, and substituting another, is a material alteration.—Ibid. Bills and Notes § 378. The addition of the words "in specie" after the word "dollars" in a sealed note is a material alteration; and when done by the principal therein, in the absence of the surety and without his consent, avoids such note as to the latter.-Darwin v. Rippey, 63 N. C. 318. 443. What constitutes a material alteration. Any alteration

which changes (1) the date; (2) the sum payable either for principal or interest; (3) the time or place of payment; (4) the number or the relation of the parties; (5) the medium or currency in which payment is to be made; or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect, is a material alteration.

C. S., s. 3107; Rev., s. 2275; 1899, c. 733, s. 125.

Bills and Notes § 378. Cutting off the name of one of the makers of a promissory note, and substituting another, is a material alteration.-Davis v. Coleman, 29 N. C. 424.

Bills and Notes § 378. The addition of the words "in specie" after the word dollars" in a sealed note is a material alteration; and when done by the principal therein, in the absence of the surety and without his consent, avoids such note as to the latter.-Darwin v. Rippey, 63 N. C. 318. Bills and Notes § 378. Prefixing the words "Pleasant Valley, S. C.," did not materially alter the note.-Houston v. Potts, 64 N. C. 33.

ART. 10. BILLS OF EXCHANGE.

444. Bill of exchange defined. A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer.

C. S., s. 3108; Rev., s. 2276; 1899, c. 733, s. 126.

Banks and Banking § 98. An "acceptance" is a bill of exchange.— Sherrill v. American Trust Co., 176 N. C. 591, 97 S. E. 471; Standard Trust Co. v. Commercial Nat. Bank, 166 N. C. 112, 81 S. E. 1074; Johnson v. Lassiter, 155 N. C. 47, 71 S. E. 23.

445. Bill not an assignment of funds in hands of drawee. A bill of itself does not operate as an assignment of the funds in the hands of the drawee available for the payment thereof, and the drawee is not liable on the bill unless and until he accepts the same.

C. S., s. 3109; Rev., s. 2277; 1899, c. 733, s. 127.

446. Bill addressed to more than one drawee. A bill may be addressed to two or more drawees jointly, whether they are partners or not, but not to two or more drawees in the alternative or in succession.

C. S., s. 3110; Rev., s. 2278; 1899, c. 733, s. 128.

447. Inland and foreign bills of exchange. An inland bill of exchange is a bill which is or on its face purports to be both drawn and payable within this state. Any other bill is a foreign bill.