PART XIII HONOR A. Acceptance for honor. Acceptance and payment for honor are not in common use in the United States, though quite common in England and on the Continent. The new negotiable instruments law has made provision for such acceptances and payment, and while various statements as to both have been made throughout the previous parts of the work, it seems wise to introduce hereunder a concise statement of the entire subject of honor. A. Acceptance for honor. Where the drawee of a bill or draft has refused to accept it, and the bill or draft has been protested for non-acceptance, or where it has been protested for better security, the Law Merchant allows a stranger to the instrument to intervene and accept the instrument to save the credit of the drawer or of any one of the indorsers. Such an acceptance is called an acceptance for honor, or acceptance supra protest. This qualifies the general rule that only the drawee may accept. Indeed, it has been held that one stranger may accept for the drawer, another for the last indorser, another for a prior indorser, etc., though there can not be series of acceptors for the honor of the same party. It follows from general rules that such an acceptance should be made before the paper is overdue. Protest necessary. Before such an acceptance can be made, the bill or draft must be protested for non-acceptance, as, otherwise, the drawer might allege that he did not draw upon the person making the acceptance, and under such circumstances the acceptor supra protest might not be able to recover from the drawer the money he might pay. (280.) How made. Such an acceptance must be in writing, and must indicate that it is an acceptance for honor, and must be signed by the acceptor for honor. In England it must be on the bill itself, but the rule in the United States is that it may be on a separate piece of paper, attached or unattached to the instrument. Form. An acceptance supra protest should be made in the presence of a notary and witnesses, the acceptor declaring at the time for whose honor he accepts, and subscribing his acceptance under the protest. This is not statutory, but customary. A long form is as follows: Accepted under protest for the honor of and will be paid for their account if regularly protested and refused when due." A shorter form: supra protest, in honor of 66 the more usual form is " Accepts signed by the acceptor. 66 Accepted -," while s. p." and Where an acceptance for honor does not expressly state for whose honor it is made, it is deemed to be an acceptance for the honor of the drawer. (282.) Effect of acceptance for honor. The holder of a bill or draft is not obliged to receive an acceptance for honor, and he may refuse it if he so desires. Even if he does receive the acceptance for the honor of one or more of the parties, he does not relinquish his right to protest the instrument against any of the other parties. Rights and Liabilities of the Acceptor. The acceptor supra protest by such acceptance engages that he will, on due presentment, pay the bill according to the terms of his acceptance, provided it shall not have been paid by the drawee, and provided, also, that it shall have been duly presented for payment and protested for non-payment and notice of dishonor given to him. Demand of payment must be made of the acceptor for honor after due presentment for payment to the drawee and protest for non-payment. There must be a formal protest stating the presentment for payment, and the failure of the original drawee to pay, in order to charge the acceptor supra protest. By such an acceptance the acceptor admits the genuineness of the drawer's signature, and he becomes liable to all holders and parties subsequent to the party for whose honor he has accepted. Of course, the acceptor for honor has his recourse against the party whom he has honored and all parties prior to his acceptance for the amount of his bill and damages. A is drawer. B drawee, C payee and indorser, D, E, F, indorsers. B refuses to accept and the bill is protested for non-acceptance. X accepts for the honor of D. He thus becomes liable to E and F and all holders subsequent to them, while he in turn has recourse against A and C. (283.) Presentment for Payment to Acceptor for Honor. Presentment for payment to the acceptor for honor must be made not later than the day following its maturity, if it is to be presented in the place where the protest for non-payment was made. If presented in some other place than where it was protested, then the general rules as to notice of dishonor must be followed. Maturity of "After sight" bill. Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting the non-aceptance for honor. (285.) This settles definitely the question that heretofore has been unsettled. Who may accept for honor. Any stranger may accept, upon consent of the holder. The drawee himself may accept for the honor of the drawer or of an indorser. Of course, any party already liable could not so accept, but the drawee owes no duty to any party to accept, unless under agreement to do so, and many, therefore, become an acceptor for honor. B. Payment for honor. When a bill of exchange or draft has been protested for non-payment, any person may intervene and pay the bill for the honor of any party liable thereon, and this without any request from him for whom he pays. Both foreign and inland bills may be thus paid. This is also true of promissory notes, but this rarely occurs. Who may make payment for honor. Any person, whether he be a stranger or a party to the instrument may so pay it. The drawee, if he has refused to accept it for want of funds, may step in and pay it for honor, though, if he has once accepted it, he can not do so. It may sometimes happen that several offers of payment supra protest (payment for honor) may be made, and under such circumstances it is the duty of the holder to receive payment from the party whose offer is most favorable to the exoneration of other parties. In other words, the person whose payment will discharge the most parties must be given the preference. In an instrument A is drawer, B the drawee, C the payee, D, E, F, G, indorsers. X may pay it for the honor of any one of them, or any one of the parties A, B, C, D, E, F, or G may pay it to save the honor of any other one of the parties. B can not accept and then pay for honor, but if he refuses to accept, he may pay for honor. (300, 303.) When and how made. A bill of exchange must not be paid supra protest before its dis |