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ARTICLE XI.

ACCEPTANCE OF BILLS OF EXCHANGE.

Section 220. Acceptance, how made, et cetera.

221. Holder entitled to acceptance on face of bill. 222. Acceptance by separate instrument.

223. Promise to accept; when equivalent to accept

ance.

224. Time allowed drawee to accept.

225. Liability of drawee retaining or destroying bill.

226. Acceptance of incomplete bill.

227. Kinds of acceptances.

228. What constitutes a general acceptance.

229. Qualified acceptance.

230. Rights of parties as to qualified acceptance.

§ 220. Acceptance; how made, et cetera.- The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer (a). The acceptance must be in writing and signed by the drawee (b). It must not express that the drawee will perform his promise by any other means than the payment of money.

(a) The acceptance is a response to the direction contained in the bill, and the language of the bill and the acceptance are but parts of one entire contract in writing. Meyer v. Beardsley, 29 N. J. Law, 236. But this contract is regarded as a new contract. Superior City v. Ripley, 138 U. S. 93. The usual mode of making an acceptance is by writing the word "accepted," and subscribing the drawee's name. Byles on Bills, 190. But the drawee's signature alone is sufficient. Spear v. Pratt, 2 Hill, 582; Wheeler v. Webster, 1 E. D. Smith.

(b) 1 Rev. Stat. N. Y. 768, section 6; Laws of Pa. 1881, 17. The English Bills of Exchange Act, following previous English statutes (1 and 2 George IV., C. 78; 19 and 20 Victoria, C. 78) requires that the acceptance be written on the bill. The American statutes do not generally require this; and such a requirement would sometimes work inconvenience. Thus, it has been held that a bank can accept a check by telegraph, and such an acceptance has been deemed to be within the terms of a statute requiring acceptances to be in writing, North Atchison Bank v. Garretson, 51 Fed Rep. 167; but to require the acceptance to be on the instrument itself would preclude the giving of an acceptance by telegraph either by a bank or by any other drawee. But under the statute the acceptance of a-bank as well as that of any other payee must be in writing. Van Buskirk v. State Bank of Rocky Ford, 35 Colo. 142. At common law an oral acceptance was sufficient. Scudder v. Union Bank, 91 U. S 406; Hall v. Cordell, 142 U. S 116; Jones v Council Bluffs Branch, Etc. 34 Ill. 313; Sturges v. Chicago Fourth Nat. Bank, 75 Ill. 595; Ward v. Allen, 2 Metc 53, Cook v. Baldwin, 120 Mass. 317. The introduction of this doctrine, however, was often regretted. In Clark v. Coch, 4 East. 72, Lawrence, J., said: "It would have been much better doctrine if it had been originally determined that nothing else should amount to an acceptance than a written acceptance on the bill itself." As the statute requires the acceptance to be in writing, the fact that it was so given must be pleaded. Wadhams v. Portland, Etc., Ry. Co., 37 Wash 86

§ 221. Holder entitled to acceptance on face of bill.- The holder of a bill presenting the same for acceptance may require that the acceptance be written on the bill, and if such request is refused, may treat the bill as dishonored.

1 Rev. Stat. N. Y., section 9.

§ 222. Acceptance by separate instrument.- Where an acceptance is written on a paper other than the bill itself, it does not bind the acceptor, except in favor of a person to whom it is shown and who, on the faith thereof, receives the bill for value.

1 Rev. Stat. N. Y. 768, section 7.

§ 223. Promise to accept; when equivalent to acceptance. -An unconditional promise in writing (a) to accept a bill before it is drawn is deemed an actual acceptance in favor of every person who, upon the faith thereof, receives the bill for value (b).

(a) Statute applied, Bank of Morganton v. Hay, 143 N. C. 326. An absolute authority to draw is equivalent to an unconditional promise to pay the draft within the statute. Ruiz v. Renauld, 100 N. Y. 256; Merchants' Bank v Griswold, 72 N. Y. 472, 479; Barney v. Wortington, 37 N. Y. 112. The promise must be unconditional. Germania National Bank v. Tooke, 101 N Y. 442; Shover v. Western Union Telegraph Co., 57 N. Y. 459, 463. But restrictions as to the time or amount do not prevent the promise from being treated as unconditional and absolute as to drafts within the limitation. Bank of Michigan v Ely, 17 Wend. 508; Ulster Co. Bank v. McFarlan, 5 Hill, 432. It is also held that an authority given to an agent to draw "from time to time, as may be necessary in the purchase of lumber," or as "you want more funds," operates simply as an instruction to the agent, and does not, as to persons dealing with him in good faith, constitute a condition. Merchants' Bank v. Griswold, 72 N. Y. 472; Bank of Michigan v Ely, 17 Wend. 508. The party dealing with the agent may rest upon his representation, express or implied, that the draft is in the business of the principal, or that the funds are needed, and he is protected, although it turns out that the repre sentation is false N. Y & N. H. R. R. Co. v. Schuyler, 34 N. Y. 30; Merchants' Bank v. Griswold, 72 N. Y. 472. The requirement that the promise shall be in writing is wholly statutory. At common law an oral promise was sufficient. Dull v. Bricker, 76 Pa. St. 255; Scudder v. Union Nat. Bank, 91 U. S 406; Williams v. Winans, 2 Gr. (N. J.) 239; Jarvis v. Wilson, 46 Conn. 91 A telegraphic authority is sufficient. Johnson v. Clark, 39 N. Y. 216: North Atchison Bank v. Garretson, 51 Fed. Rep. 167; Franklin Bank v. Lynch, 52 Md. 270. As to countermanding by telegraph an offer to accept, see First Nat. Bank v. Ciark, 61 Md. 400. A promise to accept is governed by the law of the State where it is made, notwithstanding it is to be performed elsewhere. Scott v. Pilkington, 15 Abb. Pr. 280.

(b) 1 Rev. Stat. N. Y. 768, section 8; Brown v. Ambler, 66 Md.

391. But the holder must acquire the bill on the faith of the promise to accept. Howland v. Carson, 15 Pa. St. 453.

§ 224. Time allowed drawee to accept.— The drawee is allowed twenty-four hours after presentment in which to decide whether or not he will accept the bill (a); but the acceptance if given dates as of the day of presentation (b).

(a) See Byles on Bills, 182; Daniel on Neg. Inst., section 492. By the former statute of Massachusetts, the drawee had until two o'clock on the day following. (Public Statutes, 1882, Ch. 77, section 17.)

(b) There does not appear to be any direct authority on this point; the rule of the statute conforms to what was the common practice. See also statute of Massachusetts above referred to.

§ 225. Liability of drawee retaining or destroying bill.— Where a drawee to whom a bill is delivered for acceptance destroys the same, or refuses within twenty-four hours after such delivery, or within such other period as the holder may allow, to return the bill accepted or non-accepted to the holder, he will be deemed to have accepted the same (a).

(a) This section was taken without change from a New York statute which had been in force for many years. 1 Rev. Stat. N. Y. 769, sec. 11 This statute had been construed by the Court of Appeals, which held that the refusal spoken of meant an affirmative act, and that a mere omission to return, where there was no demand, was not a "refusal" within the meaning of the statute. Matteson v. Moulton, 79 1. Y 627. See also Westberg v. Chicago Lumber & Coal Co., 117 Wis. 589. And this seems to be the plain import of the language used. But the Supreme Court of Pennsylvania, in a late case, has held that mere neglect to return the paper may constitute such a refusal. Wisner v. First Nat. Bank, 68 Atl Rep. 955. In this case, certain checks drawn upon the defendant were forwarded to it for collection, and the drawer not having sufficient funds on deposit to pay them, the defendant delivered them for protest to a notary public, who held them without protesting them, or giving notice of dishonor, and in this way the checks were retained for more

than two days after their delivery to the defendant:- Held, that such retention of the checks by the defendant was an acceptance within this section. But it is difficult to see how the statute could apply to such a state of facts. It refers only to cases where the paper is presented for acceptance; but where checks are remitted to the drawee bank, the obvious purpose is to present them for payment, and not mere acceptance. What the holder desires in such a case, is that the bank shall remit the money, not that it shall return the check with its acceptance placed thereon.

§ 226. Acceptance of incomplete bill.-A bill may be accepted before it has been signed by the drawer, or while otherwise incomplete, or when it is overdue, or after it has been dishonored by a previous refusal to accept, or by nonpayment. But when a bill payable after sight is dishonored by non-acceptance and the drawee subsequently accepts it, the holder, in the absence of any different agreement, is entitled to have the bill accepted as of the date of the first presentment.

§ 227. Kinds of acceptance.-An acceptance is either general or qualified. A general acceptance assents without qualification to the order of the drawer. A qualified acceptance in express terms varies the effect of the bill as drawn (a).

(a) Where a bill is addressed to the drawee in one place, and is accepted payable in another, this is a material variation. Walker v. Bank of State of N. Y., 13 Barb. 636; Niagara Bank v. Fairman Co., 31 Barb. 403. But a bill addressed generally to a drawee in a city may be accepted payable at a particular bank in that city. Troy City Bank v. Lanman, 19 N. Y. 477; Meyers v. Standart, 11 Ohio St. 29. And a bill so accepted is equivalent to a check. See section 147.

§ 228. What constitutes a general acceptancy.*-An acceptance to pay at a particular place is a general accept

*Error in engrossing.

1

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