Negotiable Instruments Law
Section 121. Eight of party who discharges instrument.-Where charging 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-
(a) Where it is payable to the order of a third person, and has been paid by the drawer; and
(b) Where it was made or accepted for accommodation, and has been paid by the party accommodated.