BILLS AND NOTES - INDORSEMENT OF RENEWAL NOTE AS WAIVER OF NOTICE OF DISHONOR BY THE INDORSER

In 1926, a promissory note representing money loaned was made, payable to the order of plaintiff. After various renewals, defendant, in 1929, became an additional accommodation indorser of the renewal notes and continued as such until February 4, 1932, when a renewal note, likewise indorsed by him, payable March 4, 1932, was accepted by plaintiff. On its due date, the maker presented another renewal note, again indorsed by defendant, but this plaintiff refused to accept until the maker paid the interest due on the debt. Plaintiff did, however, retain both notes but failed to give defendant notice of dishonor of the February note or notice of refusal of the renewal. Four years later, plaintiff sued defendant as indorser of the February note, claiming the indorsement of the proffered renewal note had operated as a waiver of notice of dishonor. Held, that upon maturity of the February note, since the renewal was not accepted, defendant was entitled to notice of dishonor, and in its absence was discharged from liability as indorser. Lockport Exchange Trust Co. v. Hyde, 274 N. Y. 1, 8 N. E. (2d) 38 (1937 )