Sec. 174. Preference of parties offering to pay for honor.

Where two or more persons offer to pay a bill for the honor of
different parties, the person whose payment WILL DISCHARGE MOST
PARTIES TO THE BILL is to be given the preference.

Example: R draws a bill payable to P or order with W, as the drawee,

and A, B, C, D, as successive indorsers, and E as holder. W does not pay
and E has duly protested non-payment. If T oers to pay supra protest for
the honor of C while S, for A, S is to be preferred as his
payment will discharge B, C, and D whereas payment by T will discharge only
D.

Sec. 175. Effect on subsequent parties where bill is paid for honor.
Where a bill has been paid for honor, all parties subsequent to
the party for whose honor it is paid are discharged but the payer for
honor is subrogated for, and succeeds to, both the rights and duties
of the holder as regards the party for whose honor he pays and all
parties liable to the latter.

EFFECTS WHERE BILL IS PAID FOR HONOR (SEC. 175)

1. All parties subsequent to the party for whose honor it is paid are
discharged; and
2.The payer for honor is subrogated for, and succeeds to, both the
rights and duties of the holder as regards the party whose honor he pays
and all parties liable to the latter.
If the payment is made for the honor of all parties to the bill, the payer for
honor may have recourse against all of them.

Example: A draws a bill payable to B or order with X, as the

drawee. The bill is successively indorsed to C, D, E
and F, holder. X does not pay and F has duly protested non-
payment. Y pays for the honor of C.
1.D and E are parties subsequent to C, for whose honor the
payment is made, are discharged; and
2.Y, payer for honor, acquires the rights of F, holder, as
against C, and A, B and X, parties who are liable to C.

Subrogation - assuming the legal rights of a person for whom expenses or a debt
has been paid.

NOTE: As distinguished from acceptance for honor the acceptor

for honor MUSTBE A STRANGER. In payment for honor the PAYOR
SUPRA PROTEST may even be a PARTY to the instrument.