Harper

Heydenfeldt, J., concurred.

Where the holder of a note accepts a draft or check in payment, it has usually been held, that he is not bound to give up the note before payment of the draft or check, and if he does so, the indorsers are discharged thereby. The reason of this rule is said to be, that the indorsers are entitled to have the note immediately paid in cash; and if the holder receives notes of a banker, or bills of exchange, he gives credit for the time to the maker, fro tanto, and this he is not at liberty to do at the risk of the indorsers.

It has also been held, that the substitution of a new security would discharge the indorsers. The present case does not come within the rule. The record shows, that long before the note became due, the maker obtained the same by giving the payee an order on the indorsers, which was dishonored, and immediately the payee demanded and received back the note, which was afterwards regularly presented and protested for non-payment.

How have the indorsers been injured by this transaction? or, to what new risk have they been subjected ? Certainly none. Their liability had not attached at the time, and no prejudice could possibly come of it.…