Question 178. - A bank discounts for a customer his unsecured note for $1,000. Subsequently during the currency of this note the promissor hypothecates another party's note in his favour, as collateral security to his unsecured advance. Would the bank be considered a "holder for value" or would its title be subject to the equities between maker and endorser?

Answer. - The bank would be considered a holder for the value of the note hypothecated, up to the amount of $1,000, or any unpaid portion of it, and interest. (See sections 53 and 54 of the Bills of Exchange Act).