b. Duty of holder where bill is not accepted.- The Negotiable Instruments Law provides that: Where a bill is duly presented "for acceptance and is not accepted within the prescribed time, "the person presenting it must treat the bill as dishonored by nonacceptance or he loses the right of recourse against the "drawer and indorsers." 10 A somewhat similar provision is contained in the English Bills of Exchange Act.11 The statute permits the drawee to retain possession of the bill or at least to consider the question of his acceptance, for a period of twenty-four hours after presentment.12 The effect of this section is that when the bill has been considered for twenty-four hours after its presentment for acceptance the person presenting it must serve notice of its nonacceptance upon the parties entitled thereto.13 If such notice is not given or the bill is not otherwise dishonored the drawer and indorsers thereof will be discharged. Even if there be no necessity for the presentment of a bill for acceptance, if the bill be presented and its acceptance is refused, it will be necessary to treat the bill as dishonored and give notice thereof to the parties entitled thereto.14 accepted.- The Nego"When a bill is dis c. Rights of holder where bill is not tiable Instruments Law provides that: "honored by nonacceptance, an immediate right of recourse 66 against the drawers and indorsers accrues to the holder and no "presentment for payment is necessary." 15 A similar provision is contained in the English Bills of Exchange Act.16 The immediate right of recourse arising on nonacceptance is an exceptional right; and seems peculiar to English and American law.17 Under the continental codes the holder can only protest the bill for nonacceptance, and demand security from the drawer and indorsers." 10. Neg. Inst. L. (N. Y.), § 247. For the same section in the statutes of other States see Appendix. 11. English Bills of Exchange Act, § 42. The section provides that when a bill is duly presented for acceptance, and is not accepted within the customary time, the person presenting it must treat it as dishonored by nonacceptance. If he do not, the holder shall lose his right of recourse against the drawer and indorsers. It will be noticed that in the English act the words "customary time are used instead of prescribed time." 66 12. See Neg. Inst. L. (N. Y.), § 224; § 149, post. 13. As to notice of dishonor by nonacceptance see chap. IX, ante, § 118. 14. Pendleton v. Knickerbocker Life Ins. Co., 5 Fed. 238; Landrum v. Trowbridge, 2 Metc. (Mass.) 281; Union Nat. Bank v. Marr, 6 Bush (Ky.), 614; House v. Adams, 48 Pa. St. 261, 76 Am. Dec. 588. 15. Neg. Inst. L. (N. Y.), § 248. For the same section in the statutes of other States see Appendix. 16. English Bills of Exchange Act, § 43 (2). 17. Whitehead v. Walker, 11 L. J. Exch. (Eng.) 168. 18. French Code, arts. 119, 120; German Exchange Law, arts. 25-28. CHAPTER XIV. Acceptance. § 147. Acceptance, how Made. a. Statutory provision. b. Acceptance may be verbal. c. By whom made. d. Form of acceptance. e. Holder entitled to acceptance on face of bill. f. Acceptance by separate instrument. § 148. When Promise to Accept Equivalent to Acceptance. a. Statutory provision. b. General rule. c. Form and requisites of promise. d. Verbal promise to accept. e. Conformity with terms of promise. § 149. Time Allowed to Accept. § 150. Liability for Retention or Destruction of Bill. a. Statutory provision. b. Retention of bill. 151. Acceptance of Incomplete Bill. a. Statutory provision. b. Acceptance before completion of bill. § 152. Kinds of Acceptance; General Acceptance. a. Kinds of acceptance; statutory provision. b. Acceptance to pay at a particular place; statutory provision. § 153. Qualified Acceptance. a. Statutory provision. b. Conditional acceptance. c. Qualified as to time. d. Rights of parties as to qualified acceptance. 147. Acceptance, how made. a. Statutory provision.- The Negotiable Instruments Law provides that: "The acceptance of a bill is the signification by the 66 66 " 19 "drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee. It must not express that the drawee will perform his promise by any other means than the payment of money.' The definition of an acceptance contained in this section is the same as that contained in the English Bills of Exchange Act.20 The requirements as to the form of the acceptance contained in the above section are also the same in substance as in the English Bills of Exchange Act.21 After the drawee has accepted a bill he is termed the "acceptor." b. Acceptance may be verbal.- Except as changed by statute the acceptance of a bill of exchange may be verbal as well as written.22 Even prior to the adoption of the Negotiable Instruments Law statutes were in force in most of the States requiring acceptances of bills of exchange to be in writing. These statutes followed in most respects the statute of 1 & 2 George IV, chap. 78, where it was enacted that the acceptance of an inland bill of exchange should be in writing and on the bill itself. The verbal promise by a drawee to pay an existing bill is valid as an acceptance.23 19. Neg. Inst. L. (N. Y.), § 220. For same section in statutes of other States see Appendix. 20. English Bills of Exchange Act, § 17 (1). Colorado.- Durkee v. Conklin, 13 Colo. App. 313, 57 Pac. 486. Connecticut.- Dougal v. Cowles, 5 Day, 511; Jarvis v. Wilson, 46 Conn. 90, 33 Am. Rep. 18. Illinois. Sturges v. Fourth Nat. Bank, 75 Ill. 595; Nelson v. First Nat. Bank, 48 Ill. 36; Mason v. Dousay, 35 Ill. 424, 85 Am. Dec. 368; Davis v. Rittenhouse & Embree Co., 72 Ill. App. 21. English Bills of Exchange Act, § 17 (2), which provides that, "An acceptance is invalid unless it complies with the following conditions, namely; (a) it must be written on the bill and be signed by the drawee. 58. The mere signature of the drawee Indiana.- Spurgeon v. Swain, 13 without additional words is sufficient. (b) It must not express that the drawee will perform his promise by any other means than the payment of money.' Ind. App. 188, 41 N. E. 397. Massachusetts.-Pierce v. Kittredge, 115 Mass. 374; Exchange Bank v. Rice, 98 Mass. 288; Putnam Nat. Bank v. Snow, 172 Mass. 569, 52 N. E. 1079. New Jersey.-Williams v. Winans, 14 N. J. L. 339. 22. Verbal acceptances.-The unconditional acceptance of a draft, New Hampshire.- Barnet v. Smith, whether or not there shall be any 30 N. H. 256, 64 Am. Dec. 290; Edson funds in the hands of the acceptor to v. Fuller, 22 N. H. 183. discharge it, is not a promise to answer for the debt of another within the Statute of Frauds and need not, therefore, be in writing. Walton v. Mandeville, 56 Iowa, 597, 5 N. W. 776, 41 Am. Rep. 123; Dull v. Bricker. 76 Pa. St. 255. See also note to Allen v. Leavens, 26 L. R. A. 320. The following cases are to the effect that an acceptance may be verbal: New York.-Ontario Bank v. Worthington, 12 Wend. 593. Texas.-White v. Dienger (Tex. Civ. App.), 25 S. W. 666. Vermont.- Arnold v. Sprague, 34 Vt. 402. 23. Verbal promise to accept.- Edson v. Fuller, 22 N. H. 183. Where c. By whom made. Except where the acceptance is for honor or supra protest, the acceptance must be by the drawee of the bill.24 Where a bill is drawn upon several drawees, if not accepted by all it may be treated as dishonored; but if accepted by a part it will be a good and valid acceptance as to them.25 Where a bill is addressed to a single drawee there cannot be a series of acceptors, but the bill must be accepted by the drawee himself or by some one for the honor of the drawer.28 An agent may bind his principal by an acceptance in the same manner as by any other contract.2 66 27 -- d. Form of acceptance. The usual form of accepting a bill of exchange is by writing upon the face of the bill the word accepted" with the signature of the drawee appended thereto. If the acceptance is qualified, appropriate words should be used to designate the character of the qualification. It is not necessary, however, that the word "accepted" should be used; any other words that indicate that the drawee intended thereby to absolutely accept the bill will be sufficient.28 The drawee may one on whom an order is made states that he cannot pay it at that time, but will later, it is a valid acceptance. St. Louis Nat. Stock Yards v. O'Rielly, 85 Ill. 546. In the case of Mason v. Dousay, 35 Ill. 424, 85 Am. Dec. 368, it was held that a reply made by the drawee of the bill upon demand for payment, that it is all right, and he has told the payee that he would pay it in the course of thirty or sixty days, is a valid acceptance. See also Ward v. Allen, 2 Metc. (Mass.) 53, 35 Am. Dec. 387; Short v. Blount, 99 N. C. 49, 5 S. E. 190; Spaulding v. Andrews, 48 Pa. St. 411. 24. Walton v. Williams, 44 Ala. 347; Smith v. Lockridge, 8 Bush (Ky.), 423; Heeman v. Nash, 8 Minn. 407, 83 Am. Dec. 790. 25. Byles on Bills (16th ed.), 258; Owen v. Von Uster, 10 C. B. (Eng.) 318; Nichols v. Diamond, 9 Exch. (Eng.) 154; Smith v. Milton, 133 Mass. 369. 26. Jackson v. Hudson, 2 Campb. (Eng.) 447, in which case Lord Ellenborough said: "But I know of no custom or usage of merchants according to which, if a bill be drawn upon one man, it may be accepted by two; the acceptance of the defendant is contrary to the usage and custom of mer chants. A bill must be accepted by the drawee, or failing him, by some one for the honor of the drawer. There cannot be a series of acceptors." 27. Chitty on Bills, 320. See also as to authority of agent to bind his principal § 29, (b), ante. In the case of Bruce v. Lord, 1 Hilt. (N. Y.) 247, it was held that where the drawee accepts in his own name, adding thereto words indicating that he acted as an agent, but in such a form as to constitute a mere personal description, he will be personally liable. But he may discharge himself from the liability by showing that he accepted the bill as an agent having the authority so to do, which fact was known by the plaintiff at the time the acceptance was made. A solicitor cannot bind his clients, nor an administrator the estate, by an acceptance of an order directed to him as such solicitor or administrator. Hadlock v. Brooks, 178 Mass. 425, 59 N. E. 1009. 28. Words indicating acceptance.In the case of Van Strum v. Liljengren, 37 Minn. 191, 33 N. W. 555, it was held that the word "except " written and signed upon the face of the bill of exchange was sufficient to constitute an acceptance, and the court accept the bill by merely writing his name across the face thereof, although it may not be a literal compliance with the statute requiring the acceptance to be in writing and signed by the drawee.* e. Holder entitled to acceptance on face of bill.— The Negotiable Instruments Law provides that: "The holder of the bill presenting the same for acceptance may require that the accept"ance be written on the bill and if such request is refused, may 99 30 treat the bill as dishonored." This provision is collateral to the requirement that the acceptance be in writing and signed by the drawee. If the acceptance is not in writing the effect of the statute is to discharge the drawee from liability; if the acceptance is not written upon the instrument itself the acceptor is not liable to a subsequent holder of the bill unless he became such on the faith of an acceptance contained in a separate instrument. The effect of the above section is to require an acceptance upon the bill so that it may contain in itself a binding obligation in favor of all subsequent parties as against the acceptor. f. Acceptance by separate instrument.- The Negotiable Instruments Law also provides that: "Where an acceptance is "written on a paper other than the bill itself, it does not bind the acceptor except in favor of the person to whom it is shown and "who, on the faith thereof, receives the bill for value." 31 The object of this provision is to promote convenience in commercial transactions. It is often desirable for the purpose of avoiding delay to accept a bill which has not yet been presented by means of a telegram or a letter.32 § 148. When promise to accept equivalent to acceptance. a. Statutory provision.- The Negotiable Instruments Law provides that: "An unconditional promise in writing to accept said: "No other import can be given the date of the acceptance. Brannto such writings upon the instruments ion v. Henderson, 12 B. Mon. (Ky.) by the drawee than that he thereby 64. accepted the same, nor can there have been any other purpose in such writings than of signifying his acceptance." See also Miller v. Butler, Fed. Cas. No. 9,565, 1 Cranch C. C. (U. S.) 470; Cortelyou v. Maben, 22 Neb. 697, 36 N. W. 159. A drawee indorsed on an order addressed to him the words, "I will see the within paid eventually;" it was held that these words were sufficient to constitute an acceptance, and that he was liable to pay on and after 29. Wheeler v. Webster, 1 E. D. Smith (N. Y.), 1; Spier v. Pratt, 2 Hill (N. Y.), 582, 38 Am. Dec. 600; Fowler v. Gates City Nat. Bank, 88 Ga. 29, 13 S. L. 831; Mechanics' Bank v. Yager, 62 Miss. 529. 30. Neg. Inst. L. (N. Y.), § 221. For same section in statutes of other States see Appendix. 31. Neg. Inst. L. (N. Y.), § 222. For same section in statutes of other States see Appendix. 32. See North Atchison Bank v. |