XVI. Formerly, if he paid a holder whose title depended on a CHAPTER forged or unauthorised indorsement, he could not debit his customer with the payment (e). He was thus between two Forged or unfires if he refused to honour the cheque he was exposed to authorized an action at the suit of his customer, and if he paid it, he indorsement. took the risk of the indorsement not being valid or genuine. To obviate this hardship the 16 & 17 Vict. c. 59, s. 19, relieved him from the necessity of proving the validity of any indorsement on a draft on him to order on demand, thus enabling him to substantiate the payment against his customer. This section, though not repealed, is substantially reproduced in the Code, which gives the like relief to the banker in the case of a forged or unauthorised indorsement of any bill to order on demand drawn on him (ƒ). Where a bill is accepted payable at a banker's, though Liability to a money had been remitted by the acceptor to the banker for holder. the express purpose of paying the bill, the banker is not liable to the holder in an action for money had and received, unless he have assented to hold the money for the purpose for which it was remitted (). But where there is anything in the conduct or situation of the banker which amounts to an assent to hold the remittance upon trust to discharge the bill, he is liable to the holder (h). A bill can only be accepted by the drawee (i), and not by By whom it a stranger, except for honour (k). Where, indeed, the bill may be was not addressed to anyone, but only indicated the place accepted. of payment, the acceptor was held liable as having admitted (e) Robarts v. Tucker, 16 Q. B. 560. (f) Code, s. 60. It may be doubtful whether this section has extended, or only better defined the protection; difference between a cheque and a bill of exchange on a banker on demand there is none in form, but the former is, in theory at all events, drawn against his balance by a customer, whose signature the banker is bound to recognise and honour; while the latter may be drawn by a stranger to whom the banker would be under no such obligation. The non-repeal of the former statute looks as if something new were intended, but what change has been made beyond the introduction of the word "forged" it is not easy to see. B.B.E. (g) Williams v. Everett, 14 East, 582; 13 R. R. 315; Yates v. Bell,3 B.& Ald.643; Wedlakev. Hurley, 1 C. & J. 83; 35 R. R. 688. (h) De Bernales v. Fuller, 14 East, 590, n.; 2 Camp. 426; 11 R. R. 755; 13 R. R. 321, n.; and see the observations of Abbott, C. J., on this case, in Yates v. Bell, 3 B. & Ald. 643. (i) Code, ss. 6 and 17: Nichols v. Diamond, 9 Exch. 157. (k) Polhill V. Walter, 3 B. & Ad. 114; 1 L. J., K. B. 92 ; 37 R. R.344. Eastwood v. Bain, 28 L. J., Ex. 74 : 3 H. & N. 738 ; Daris v. Clarke, 13 L. J., Q. B. 305; 6 Q. B. 16; see Jenkins v. Hutchinson, 18 L. J., Q. B. 274 ; 13 Q. B. 744: Code, s. 17, and 65 (1). 17 CHAPTER Not by a series of acceptors. himself to be the party pointed out by the place of payment (1). But this decision goes to the very verge of the law (m). If the drawee be fictitious or incompetent to contract, as, for example, by reason of infancy or coverture (n), the bill may be treated as dishonoured. We have already seen that one partner may, by his acceptance, bind his co-partners. But, if a bill be drawn upon several persons not in partnership, it should be accepted by all, and, if not, may be treated as dishonoured (o). Acceptance will, however, be binding upon such of them as do accept (p). There cannot be two or more separate acceptors of the same bill not jointly responsible. A. refused to supply B. with goods, unless C. would become his surety. C. agreed to do it. Goods to the value of 1577. were accordingly sold by A. to B. For the amount A. drew on B., and the bill was accepted both by B. and C., each writing his name on it. Lord Ellenborough: "If you had declared that, in consequence of A. selling the goods to B., C. undertook that the bill should be paid, you might have fixed C. by this evidence. 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 merchants. A bill must be accepted by the drawee, or, failing him, by someone for the honour of the drawer. There cannot be a series of acceptors. The defendant's undertaking is clearly collateral, and ought to have been declared upon as such "(q). But, although there can be no other acceptor after a general acceptance of the drawee, it is said that, when a bill has been accepted supra protest, for the honour of one party, it may, by another individual, be accepted supra protest, for the honour of another (r). Dupays v. Shepherd, Holt's R. 297; Marius, 64. (p) B. N. P. 270; Bayley, 58; Owen v. Von Uster, 10 C. B. 318; Nichols v. Diamond, 9 Exch. 154. (q) Jackson V. Hudson, 2 Camp. 447; 11 R. R. 762; Code, ss. 6 and 56. And see In re Barnard, 32 Ch. D. 447. (r) Jackson V. Hudson, 2 Camp. 447; 11 R. R. 762; Beaw. 42; on Art. 159 of the French Code (which resembles s. 68 (2) of XVI. A bill may be accepted before it has been signed by the CHAPTER drawer, or while otherwise incomplete; and, as we have already seen, the signature of a drawer, maker, or indorser, When still on blank stamped paper, delivered to be filled up as a incomplete. negotiable instrument, will bind them respectively; so an acceptance, written on the paper before the bill is made, and delivered by the acceptor, will also charge the acceptor to the extent warranted by the stamp (s). It is not even necessary that the bill should be drawn by the same person to whom the acceptor handed the blank acceptance (t). And where a blank acceptance was filled up after the lapse of twelve years, and, as the jury found, after the lapse of a reasonable time, the acceptor was held liable to a bonâ fide indorsee (u). But it is conceived that the case of a blank ours). Nouguier remarks "si l'acceptation n'est pas le paiement, elle est l'engagement de payer,' and in case of competition he apparently thinks preference as in payment for honour should be given according to the priority of the party for whose honour acceptance is offered, i.e., to party offering to accept for honour of drawer, before one for honour of payee, of payee, or first indorser before second, and so on. Lettres de Change (edition 1839) Vol. I., p. 268. (8) Code, s. 20. Though the bill bore a previous date against the then existing law. Armfield v. Allport, 27 L. J., Ex. 42. No liability attaches before delivery, Baxendale v. Bennett, L. R., 3 Q. B. D. 525; nor until completion. In re Hayward, L. R., 6 Chan. Ap. 546; 40 L. J. 49. Whether this first delivery or issue will be presumed in favour of a holder in due course under sect. 21 remains to be seen. Sect. 20, it will be noticed, presupposes some authority given by the deliverer, and makes the due following of that authority immaterial in case of a holder in due course; but if there has been no delivery at all, there will also be no authority at all. The decision of the learned judges in Baxendale v. Bennett distinctly proceeded on the assumption that there was no negligence, as other wise there would have been an (t) Schultz v. Astley, 2 Bing. (u) Montague v. Perkins, 22 L. J., C. P. 188. CHAPTER Not before the bill is in existence. acceptance not delivered at all, but lost or stolen, at least without any negligence of the writer, is distinguishable (). An acceptance for value, before the bill is filled up, is irrevocable. Notice that the acceptance was in blank should put the holder on inquiry (y). 66 It was formerly held (in cases where an acceptance in writing on the bill was not necessary), that a promise to accept, given before the bill was made, amounted to an acceptance. Thus, a promise by the defendants, that they would accept such bills as the plaintiff should, in about a month's time, draw on the defendant for 8007., has been held an acceptance of such bill subsequently drawn (2). But it was said that a subsequent holder could not avail himself of such an engagement, unless it was communicated to him at the time he took the bill. A promise to accept," says Gibbs, C.J., "not communicated to the person who takes the bill, does not amount to an acceptance; but, if the person be thereby induced to take a bill, he gains a right equivalent to an actual acceptance, against the party who has given the promise to accept " (a). But it is now settled that there cannot be an oral acceptance of a nonexisting bill, although the bill be discounted by the drawer on the faith of a promise to accept (b). It has been decided, since 1 & 2 Geo. 4, c. 78, that an acceptance may be written before the bill is drawn, though that statute (x) Baxendale v. Bennett, 3 Q. B. D. 525. See, however, the observations of the Court in Montague v. Perkins, 22 L. J., C. P. 189; and Ingham v. Primrose, 28 L. J., C. P. 295; 7 C. B., N. S. 82. Perhaps the obligation created by blank makings, acceptances and indorsements of bills, cheques or notes depends on the principle of estoppel, and not on any peculiarity of negotiable paper. On this ground it is put by Lord Mansfield in Russell v. Langstaffe, 2 Doug. 514; and by Lord Chief Justice Tindal in Schultz v. Astley, supra; but see the observations of Williams, J., in Ex parte Swan, 7 C. B., N. S. 447, and Martin, B., and Channell, B., in Swan v. North British Australian Company, 31 L. J., Exch. 435. On the question whether the principle of estoppel can be applied to a deed improperly filled up, the Courts of Common Pleas and of Exchequer were equally divided. Ibid. In the Exchequer Chamber it was held that it could not. 32 L. J., Exch. 273. (y) Hatch v. Searles, 2 Sm. & G. 147; 24 L. J., Ch. 22; Hogarth v. Latham, 3 Q. B. D. 643. () Pillans v. Van Microp, Burr. 1663; Pierson v. Dunlop, Cowp. 571; Mason v. Hunt, Doug. 284, 287. (a) Milne v. Prest, 4 Camp. 393; Holt, N. P. 181, evidently an inaccurate report in Holt; see 11 M. & W. 390; Johnson v. Collings, 1 East, 98. (b) Johnson v. Collings, 1 East, 98; Bank of Ireland v. Archer, 11 M. & W. 383. This is otherwise in some of the United States. makes it essential to the acceptance of an inland bill, that it should be in writing on such bill; and it would be no variance, though the declaration stated the drawing to have been first and the acceptance afterwards (c). A bill may also be accepted when it is overdue, and the acceptor will then be liable to pay on demand; or after it has been dishonoured by a previous refusal to accept, or by non-payment (d). When a bill payable after sight is dishonoured by non-acceptance and subsequently accepted, the holder, unless otherwise agreed, is entitled to have the bill accepted as of the date of the first presentment (e). CHAPTER XVI. After due or after prior refusal to accept. The date on a bill or note, or of the acceptance, making, Presumption or indorsement thereon, is primâ facie the true date; and as to time of where the acceptance is not dated, the presumption is that it was accepted before maturity, and within a reasonable time of its date (f). The statute 3 & 4 Anne, c. 9, s. 5, expressly enacted that no acceptance of an inland bill should be sufficient to charge any person whatever, unless it were underwritten or indorsed on the bill. But this Act was so loosely drawn that two Chief Justices held a verbal acceptance to be binding notwithstanding, and that was finally settled to be law by Lord Hardwicke (g). This was much regretted, and accordingly the 1 & 2 Geo. 4, c. 78, s. 2, enacted that no acceptance of any inland bill of exchange should be sufficient unless in writing on the bill, or, if in parts, on one of the parts. This statute did not require the signature of the drawee, and excluded foreign bills. The 19 & 20 Vict. c. 97, s. 6, enacted that no acceptance of any bill, inland or foreign, should charge any person, unless in writing on the bill, and signed by the acceptor or on his behalf (); and 41 Vict. c. 13, declared the gignature alone of the drawce to be sufficient. (c) Molloy v. Delves, 7 Bing. 428; 5 M. & P. 275; 4 C. & P. 492. And the same interpretation was put on the 19 & 20 Vict. c. 97, which required the signature of the acceptor. (d) Code, ss. 10 (2) and 18 (2) ; Jackson v. Pigott, 1 L. Ray. 364; Muford v. Walcot, ibid. 574; 1 Salk. 129: Stein v. Yglesias, 1 C., M. & R. 565; Wynne v. Raikes, 5 East, 514; Christie v. Peart, 7 M. & W. 491. (e) Code, s. 18 (3): Roberts v. Bethell, 12 C. B. 778. (f) Code, s. 13: Roberts v. Bethell, 12 C. B. 778. (g) Lumley v. Pulmer, 2 Stra. 1000. () On this statute was decided the case of Hindlaugh v. Blakey, where the mere signature of the drawee was held insufficient as an acceptance, L. R., 3 C. P. D. 136. Must be in writing on bill. |