Page images


Where drawee precluded from disputing accept


or indorse, the consequence might be that the acceptor might possibly be compelled to pay the bill twice (1). Nor that the drawing (and first indorsing) were in the name of a deceased person (m). But the acceptance of a bill drawn and indorsed in the name of a really existing person is no admission of the handwriting of the indorser (n), unless at the time of the acceptance the drawee knew of the forgery, and intended that the bill should be put into circulation by a forged indorsement (o). And the acceptance of a bill purporting to be already indorsed by the payee, not being the drawer, is no admission of the genuineness or validity of the indorsement (p); and the law is the same though the bill be payable to the drawer's own order (4). So where the drawing is by procuration, the authority of the agent to draw is admitted, but not his authority to indorse (r). But where the bill is drawn in a fictitious name, the acceptor undertakes to pay to an indorsement by the same hand (s). A plea to the jurisdiction only of an inferior court, though admitting the allegations of acceptance, notice of dishonour, &c., does not admit that they took place within the jurisdiction (t).

A forgery is incapable of ratification (u), but if the drawee has once admitted that the acceptance is in his own handwriting, and thereby given currency to the bill, he cannot afterwards exonerate himself by showing that it was forged (r).

(1) Smith v. Marsack, 18 L. J., C. P. 68; 6 C. B. 486. As to married women now, see ante, p. 78.

(m) Ashpitle v. Bryan, 32 L. J., Q. B. 91; 3 Best & S. 474; affirmed in error, 33 L. J.,Q. B. 328.

(n) Smith v. Chester, 1 T. R. 655; 1 R. R. 345; Carrick v. Vickery, Doug. 2nd ed. 653, n. 134. (0) Beeman v. Duck, 11 M. & W. 251.

(p) Tucker v. Robarts, 18 L. J., Q. B. 169; 22 L. J., Q. B. 270; in error, 16 Q. B. 560.

(1) Story on Bills, p. 489; but see a dictum of Patteson, J., in Tucker v. Robarts, supra; Beeman v. Duck, supra; Garland v. Jacomb, L. R., 8 Ex. 216.

(r) Robinson v. Yarrow, 7 Taunt. 455; 18 R. R. 537; 1 Moore, 150; see ante, p. 41.

(8) Cooper v. Mayer, 10 B. & C. 468; 5 M. & R. 387; 34 R. R. 493 ;

Beeman v. Duck, 11 M. & W. 251; and see Taylor v. Croker, 4 Esp. 187; Bass v. Clire, 4 M. & S. 13; 4 Camp. 78. See Phillips v. Im Thurn, 35 L. J., C. P. 220; L. R., 1 C. P. 463. It seems that a bill drawn and indorsed in a fictitious or forged name, to the knowledge of the drawer, should be declared on as payable to the bearer. See Phillips v. Im Thurn, ante, and Beeman v. Duck, 11 M. & W. 251. Code, s. 7 (3).

(1) Sewell v. Cheetham, L. R., 9 C. P. 420.

(u) Brook v. Hook, L. R., 6 Exch. 89; 40 L. J. 50.

() Leach v. Buchanan, 4 Esp. 226; so held by Lord Ellenborough. Mere silence after knowledge does not create an estoppel. McKenzie v. British Linen Co., L. R., 6 Ap. Ca. 82; Ogilvie v. West Australian Bank, [1896] Ap. Ca. 257.

By paying one forged acceptance a man is not estopped CHAPTER from setting up that defence in the case of another similar bill (y).




Obligation to

When goods or bills of lading are sent to the consignee. accompanied by a bill of exchange for his acceptance, he accept. must accept the bill before he can acquire or transfer any property in the goods or bills of lading (2). So when a cheque was sent in respect of a promised renewal, the acceptor cannot take the cheque without renewing the acceptance (a).

In alluding to excuses for notice of dishonour, the Code in sect. 50 (2) c. (4) uses the phrase-when the drawee or acceptor is, as between himself and the drawer, under no obligation to accept or pay; and in excuses for due presentment for payment in sect. 46 (2) c, the phrase-where the drawee or acceptor is not bound, as between himself and the drawer, to accept or pay, and the drawer has no reason to believe that the bill would be paid if presented; both these probably cover much the same ground as the expression formerly used, that the drawer was not entitled. to expect due presentment or notice of dishonour where he had neither any effects in the drawee's hands at the time, nor a reasonable probability of there being such. An obligation to accept or pay can only arise from a contract express or implied, as has been noticed in the case of a banker's obligation to honour his customer's cheque; but still, whenever the drawer has, as Lord Ellenborough says, "a solid belief" that the bill will be duly accepted or paid, whether from the state of accounts or any other relation between himself and the drawee, he will probably be entitled to expect both (b).


When acceptance is refused, and the bill is protested for ACCEPTANCE non-acceptance, or where a bill has been protested for SUPRA PRObetter security and is not overdue, any person not being liable thereon may, with the consent of the holder, intervene and accept the bill supra protest, for the honour of any party thereto, or for the honour of the person for whose account the bill is drawn.

There may be a partial acceptance for honour.

(y) Morris v. Bethell, L. R., 5 C. P. 47.

() Shepherd v. Harrison, L. R., 5 H. L. 116; 40 L. J., Q. B. 149; Sale of Goods Act, [1893] s. 19 (3); but see Cahn's case, B.B.E.

C. A., March 8th, 1899.

(a) Torrance v. Bank of British North America, L. R., 5 P. C. 246.

(b) Rucker v. Hiller, 3 Camp. 217; 14 R. R. 278.



Referee in case of need.

Contract of acceptor

If the acceptance does not state for whose honour it is made, it will be deemed to be for the honour of the drawer (c).

Though, as we have seen, there cannot be two or more drawees in the alternative, or in succession, yet the drawer or indorser may insert in the bill the name of a person to whom the holder may resort if the bill is dishonoured by non-acceptance or non-payment. Such person is called the "referee in case of need," and resort to him is optional on the part of the holder (d).

An acceptance supra protest must be written and signed on the bill, and indicate that it is an acceptance for supra protest. honour (e).

An acceptance for honour is liable on the bill to the holder, and to all parties to the bill subsequent to the one for whose honour he has accepted. He engages that he will, on due presentment, pay the bill according to the tenor of his acceptance on the drawee's default, provided it be duly presented to the drawee and protested for non-payment, and that he receive notice of these facts (f).

Protest for non-payment is required before the bill can be presented either to the acceptor for honour, or the referee in case of need; and also, again, in case of dishonour by the acceptor for honour (g).

(c) Code, s. 65 (1). Protest has always been necessary whereon to found an acceptance for honour. Vandewall v. Tyrrell, M. & M. 87; Geralopulo v. Wieler, 10 C. B. 690; Bay. 6th ed. 181; Nouguier, Lettres de Change, 584-591. As to protesting for better security, see Chapter on PROTEST AND NOTING.

(d) Code, ss. 6 (2) and 15. Protest for non-acceptance is not mentioned as being required when the holder has recourse to a referee in case of need, but protest for non-payment is. Sect. 67 (1). A referee in case of need seeming to be more an agent to pay the bill than an alternative drawee. A referee in need appointed by an indorser, is not a party to receive notice of dishonour and so gain extra time. In re Leeds Banking Co., L. R., 1 Eq. 76; 35 L. J., Ch. 33.

(e) Sect. 65 (3). The full form should be "accepted supra protest for the honour of A.," B': but more commonly "accepts S. P.," B': Beawes, 38.

(f) Sect. 66. An acceptor, S. P., admits the genuineness of the signature of the party for whose honour he accepts, and is bound by any estoppel binding on such party. Phillips v. Im Thurn, L. R., 1 C. P. 463. He is placed in the shoes of such party, both as regards his liability to subsequent parties and his rights against the antecedent parties, and in addition can recover against such party himself. Beawes, 47. Code de Commerce, Art. 159. Poth. Vol. IV., Pt. I. 113, 114. Nouguier, L. D. C. 584-591. And so in Code of any one who pays for honour, s. 68 (5).

(g) Code, s. 67.


for honour.

Where the acceptor for honour lives where the bill is CHAPTER protested for non-payment, the bill must be presented to him not later than the day following its maturity; if else- Presentment where, then forwarded to him within the same time; but to acceptor failure or delay in so presenting will be excused by any circumstance which would excuse failure or delay of presentment for payment (h). The maturity of a bill accepted for honour is now calculated from the date of noting and protesting for dishonour, and not from the date of acceptance for honour (i).

The method of accepting supra protest is said to be as Mode of such follows, viz. the acceptor supra protest must personally acceptance. appear before a notary public, with witnesses, and declare that he accepts such protested bill in honour of the drawer or indorser, as the case may be, and that he will satisfy the same at the appointed time; and then he must subscribe the bill with his own hand (k).

Any person not already liable on it may accept a bill Who may so supra protest: and the drawee himself, though he may accept. refuse to accept the bill generally, may yet accept it supra protest for the honour of the drawer or of an indorser (1). And though we have seen that, after one general acceptance, there cannot be another acceptance (m), yet, when a bill has been accepted, supra protest, for the honour of one party, it is said that it may, by another individual, be accepted, supra protest, for the honour of another (n). In no one case is the holder obliged to take an acceptance for honour (o).

The holder of a dishonoured bill, who is offered an acceptance for the honour of some one of the preceding parties to the bill, should first cause the bill to be protested,

(h) Code, ss. 67 (2) and (3), and 46. The 6 & 7 Will. 4, c. 58 (now repealed), contained the same provision as to time of presentment to acceptor supra protest or referee in case of need.

(i) Code, s. 65 (5). So formerly, Williams v. Germaine, 7 B. & C. 468; 1 M. & R. 394; 31 R. R. 248. (k) The Code does not seem expressly to require the services of a notary for acceptance, S. P., but it certainly does for payment. S. P. Sect. 68 (3).

() Beawes, 33. And it has

been held in America that it is
no objection that the acceptor
supra protest takes the guarantee
of the drawee. Byles on Bills,
6th American edition, 403.

(m) Jackson V. Hudson, 2
Camp. 447; 11 R. R. 762.
(n) Beawes, pl. 42. See ante,
p. 258.

(0) Mutford v. Walcott, 12
Mod. 410; 1 Ld. Raym. 575,
S. C.; Beawes, 37; Gregory v.
Walcup, Comb. 76; Pillans v.
Van Mierop, 3 Burr. 1663. Code,
s. 65 (1).

Conduct which holder

should pursue.


and then to be accepted, supra protest, in the manner above described. At maturity he should again present it to the drawee for payment, who may, in the meantime, have been put in funds by the drawer for that purpose. If payment

by the drawee be refused, the bill should be protested a second time for non-payment (p), and then presented for payment to the acceptor for honour (9). Doubts having arisen as to the day when the bill should be again presented to the acceptor for honour, or referee in case of need, for payment, the 6 & 7 Will. 4, c. 58 (now repealed), enacted, that it should not be necessary to present, or in case the acceptor for honour or referee live at a distance, to forward for presentment, till the day following that on which the bill becomes due, and a similar provision is contained in the Code (r).

In a case which attracted much attention, it was proved, that where a foreign bill, drawn upon a merchant residing in Liverpool, payable in London, is refused acceptance, the usage is to protest it for non-payment in London. The bill is put into the hands of a notary, and he formerly used to make protest at the Royal Exchange, but that custom is obsolete the notary now is merely desired by the holder to seek payment of the bill, and on a declaration by the holder that the drawee has not remitted any funds, or sent to say where the bills will be paid, the notary at once marks it as protested for non-payment. The Court (except perhaps, Bayley, J.) seemed to think this might, if the bill were payable in London, be, in ordinary cases, sufficient. But they were all agreed that it would not have been

(p) Hoare V. Cazenove, 16 East, 391; 14 R. R. 370.

(1) Williams v. Germaine, 7 B. & C. 477; 1 M. & R. 394; 31 R. R. 248.

(") Code, s. 67. According to
the French law the acceptor for
honour is bound to give notice
to the person for whose honour
he accepts. "L'INTERVENANT

VENU." Code de Commerce, 127 :
"Parce que autrement," says
Rogron, "le tireur, ignorant ce
qui est arrivé, pourrait envoyer
la provision au tiré; l'observation
de cette disposition donne lieu
à des dommages-intérêts contre
l'accepteur par intervention si le

tireur en éprouve quelque préju-
dice." But according to Beawes,
pl. 47, any one accepting a bill
supra protest, for the honour of
the drawers or indorsers, though
without their order or knowledge.
has his remedy against the person
for whose honour he accepted.
It seems that, by the former
Scotch law, a holder might take
an acceptance supra protest, and
yet sue the drawer or indorsers.
Thompson, 489. Such is certainly
the French law: "Le porteur de
la lettre de change conserve tous
ses droits contre le tireur et les
endosscurs à raison du défaut
d'acceptation par celui sur qui
la lettre était tirée, nonobstant
toutes acceptations par interven-
Code de Com. 128.

« PreviousContinue »