New York Consolidated Laws, Uniform Commercial Code - UCC § 3-802. Effect of Instrument on Obligation for Which It Is Given

(a) the obligation is pro tanto discharged if a bank is drawer, maker or acceptor of the instrument and there is no recourse on the instrument against the underlying obligor;  and

(b) in any other case the obligation is suspended pro tanto until the instrument is due or if it is payable on demand until its presentment.  If the instrument is dishonored action may be maintained on either the instrument or the obligation;  discharge of the underlying obligor on the instrument also discharges him on the obligation.