$226

5. ACCEPTANCE OF INCOMPLETE OR DISHONORED BILL.

HOPPS & CO. v. SAVAGE.

69 MARYLAND, 513. 1888.

ACTION against defendant as acceptor. Defendant accepted the draft before the drawer (Waddy) signed it. The draft, payable "to order of myself," was then indorsed to plaintiff by Waddy. Plaintiff presented it to defendant who refused to accept or pay it and pointed out that Waddy had not signed it as drawer. Plaintiff then procured Waddy's signature as drawer. Judgment for plaintiff.

MILLER, J. [after stating the facts] delivered the opinion of the court. * * * The material facts are undisputed. Hopps wrote the draft himself, accepted it, and then gave it to Waddy for the

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." Craw. Neg. Inst. Law, 3rd ed., p. 156.

An article in 25 Banking Law Jour. 638 (August, 1908), discussing the principal case, says: "It seems incorrect, in a way, to apply to checks the section which provides that [quoting § 225.] A check is not presented for acceptance, but for immediate payment; a bank is not obliged to accept or certify a check, only to pay it, and a check cannot be protested for refusal to certify, but only for refusal to pay. The delivery for acceptance provided by this section contemplates bills of exchange other than checks. But the Negotiable Instruments Law defines a check as a bill of exchange drawn on a bank payable on demand, and declares that, except as otherwise provided, the provisions of the act applicable to a bill of exchange payable on demand apply to a check, and the Supreme Court of Pennsylvania says that there is no provision in the act which makes the section in question inapplicable to bank checks presented for payment, and that there is every reason why the section should apply." p. 641.

Section 137 of the Pennsylvania Negotiable Instruments Law [N. Y. § 225] was amended by laws of Pennsylvania, 1909, No. 169, p. 260, by adding the following: "Provided, that the mere retention of such bill by the drawee, unless its return has been demanded, will not amount to an acceptance; and provided further, that the provisions of this section shall not apply to checks." Commenting on this amendment, the Pennsylvania Committee on Uniform State Laws, in its 1909 report to the Pennsylvania Bar Association, says: 'As was pointed out by the learned editor of the Legal Intelligencer (May 7, 1909), this act was passed probably to overcome the effect of the decision of the Supreme Court in Wisner v. First National Bank. . . While, of course, anything that destroys the uniformity of any section of the act, whether by judicial decision or by statute, is to be deplored, it has been said in relation to this particular act, by eminent authority, that in thus changing the law as interpreted by the Supreme Court, the statute but follows the weight of authority in other states, so that substantial uniformity has not been affected," Report of Pa. Bar Ass'n for 1909, p. 136.

express purpose of enabling him to raise money upon it. It is true it was delivered to him before Waddy had signed it as drawer, but there can be no doubt as to the fact that Hopps intended Waddy should sign and negotiate it. In such case the law implies an authority from Hopps to Waddy to sign his name as drawer. Four days after its date, and long before its maturity, Waddy indorsed the draft to Savage, and received from the latter its full face value. That Savage thereby became a bona fide holder for value is undeniable. Even if he had then known that, as between Hopps and Waddy, it was without consideration and merely an accommodation bill, his position as such holder would not have been affected by such knowledge. (Maitland v. Citizens' Nat. Bank of Balto., 40 Md. 540.)

It is also true that Waddy's signature was not put to the draft until after Savage had become the holder. In other words, the draft, when indorsed to Savage, was in blank in respect to the drawer's name, but this blank was afterwards filled up in accordance with the intention of the parties when the bill was written and accepted. We are clearly of opinion the law authorized this to be done. In fact the authorities go to the extent of holding that Savage would have been authorized to fill the blank by inserting his own name as drawer. Such was the decision of the Common Pleas Division in Harvey v. Cane (34 Law Times, N. S. 64); and in Scard and Wife v. Jackson, reported in a note to the same case, it was held that the name of the holder could be thus inserted after the maturity of the bill. (See, also, Schultz v. Astley, 2 Bing. N. C. 544.) In the case before us the suit is by a bona fide holder for value before maturity, against the acceptor, and the drawer's name was signed in strict accordance with the intention of the parties. We hold that in such a case it makes no difference whether the blank was filled before or after the maturity of the draft.

From these views it follows there was no error of which the appellant is entitled to complain in the rulings of the court upon the instructions, and the judgment must be affirmed.

Judgment affirmed.

& 226

STOCKWELL v. BRAMBLE.

3 INDIANA, 428.- 1852.

ACTION against defendant as acceptor of a bill. Judgment for defendant.

Plaintiff offered to prove that defendant stated that he would accept the bill, but did not want it generally known that he was accepting the drawer's bills, and would therefore write "protested"

across the face, which he did and signed his name; that afterward on the same day defendant again promised to pay the bill. This evidence was excluded.

BLACKFORD, J. [after stating the facts]. We think that the parol evidence offered by the plaintiff was admissible, on the ground that it showed a valid acceptance of the bill by the defendant, after he had written on it the word "Protested."

Suppose the word "Protested," as written on the bill, to mean that the defendant refused to accept the bill, and the holder so understood that word; and suppose, also, that evidence of what the defendant said, at the time of such refusal, was objectionable as contradicting the word "Protested," still the subsequent parol acceptance would be good. We know of no reason why the drawee of a bill, who has refused to accept the same, may not afterwards accept it. It frequently happens that a bill, after being protested for nonacceptance, is accepted by a third person supra protest. The following case is cited by Mr. Chitty: A foreign bill drawn on defendant was protested for non-acceptance, and returned, and afterward defendant told the plaintiff, "if the bill comes back I will pay it," and this was held a good acceptance. (Chitty on Bills, 316, note l.) It is clear, therefore, that the fact of a bill's having been protested, does not prevent its being afterwards accepted by the drawee.

The acceptance is not objectionable merely because it was by parol. By the law merchant, a bill, whether foreign or inland, may be accepted by parol as well as by writing, (Chitty on Bills, 316); and that is the law here.

PER CURIAM.-The judgment is reversed with costs. Cause remanded.*

II. Kinds of acceptances.

1. GENERAL ACCEPTANCE.

§ 227

MEYER & CO. v. DECROIX, VERLEY ET CIE.

L. R., 1891, APPEAL CASES (H. L.) 520.

ACTION by indorsees against acceptors, upon the following instrument:

5

4"A promise to accept, even after a protest for non-acceptance, is binding: and a promise to accept made after the bill becomes due according to its tenor, amounts to a promise to pay immediately." Grant v. Shaw, 16 Mass. 341 (1820).-H.

In fac-simile in 59 L. J. Q. B. 539.-H.

No. 501. £778 4s. 2d.

ROUBAIX, Sept. 12th, 1889.

order

Mr. L. Delobbel Flipo seven

On Oct. 31st after date pay to hundred and seventy-eight pounds 4s. 2d. Value received.

To Messrs. H. MEYER & Co., Limited,

London, Eng.

[Across the face was written and stamped:] In favor of Mr. L. Delobbel Flipo only.

No. 28.

L. DELOBBEL FLIPO

Accepted payable at Alliance Bank, London, for H. Meyer & Co., Limited. B. MANNING, ARTHUR MANNING, Directors. ARTHUR MANNING, Secretary.

The word "order" in the bill was struck out, but when or by whom did not appear.

Plaintiffs, bankers at Lille, in France, discounted the bill for Flipo. They did not understand English and their attention was not called to the form of the acceptance until after the dishonor of the bill by the Alliance Bank.

The Divisional Court (Cave and A. L. Smith, JJ.) held the acceptance was a qualified one, rendering the bill non-negotiable, and gave judgment for defendants. The Court of Appeal (Lord Esher, M. R., Lindley and Bowen, L. JJ.) reversed that decision and entered judgment for the plaintiffs." Defendants appeal.

LORD HERSCHELL. My Lords, the respondents in this case seek to recover from the appellants the amount of a bill of exchange accepted by them. The defense set up is that the acceptance was a qualified one, and restricted the right to require payment to the payee alone, and that the acceptors are therefore under no obligation to the respondents who took by indorsement from him.

It was not disputed at the bar that the acceptor of a bill of exchange may make his acceptance a qualified one. If he do so, the drawer may, of course, refuse to take such an acceptance, and treat the bill as dishonored: but if he takes the bill, the obligation of the acceptor is not absolute, but subject to the qualification which he has introduced. I think, further, that it is beyond dispute that if an acceptor seeks to qualify his acceptance, and thus to modify the obligations which an acceptance ordinarily imposes, he must do so on the face of the bill in clear and unequivocal terms, and in such a manner that any person taking the bill, if he acted reasonably, could not fail to understand that it was accepted subject to an expressed qualification.

About these propositions I do not think there can be any difference of opinion; the difficulty lies in applying them to the facts of the

This word was struck out by a pen mark. By the provisions of the Bills of Exchange Act (§ 8, subsec. 4) the words "order" or bearer " are not necessary to render a bill negotiable. H.

7 See 59 L. J. Q. B. 539; L, R. 25 Q. B. D. 343. H,

particular case. The bill in question was drawn in France by a person named Delobbel Flipo upon the appellants, and forwarded to London for their acceptance. The bill is drawn on a printed form containing the word "order" immediately preceding the name of Delobbel Flipo, which has been inserted as the payee of the bill. This word "order" has been erased, but by whom does not appear, nor do I think it material. If, as suggested, it was done by the acceptors, they were not justified in making the erasure, and in any case there would be nothing to show a person taking the bill that the word had not been struck out by the drawer at the time he inserted the name of the payee. I do not think, therefore, that the erasure of the word order" can in any way assist the contention that the acceptance was a qualified one. That must be determined by a consideration of the effect of the words written across the bill by the acceptors.

For the purpose of accepting the bill the appellant company impressed upon it by means of a stamp the words "accepted payable at Alliance Bank, London," underneath which the signatures of two directors and the secretary were written. The acceptors wrote across the bill above the word "accepted" the words "In favor of Mr. L. Delobbel Flipo only:" between these words and the word "accepted" was written "No. 28." In considering whether the effect of the words "In favor of Mr. L. Delobbel Flipo only" was to make the acceptance a qualified one in the manner suggested, regard must be had both. to the words used and to the situation in which they are placed. It may be that if the same words had been found in the body of the acceptance following the word "accepted," they would have amounted to the qualification contended for. The presence of any words in the body of the acceptance would of itself suggest the idea that some qualification of it was intended; but where the words are not inserted in the body of the acceptance, I do not think the same impression is likely to be produced, though the words may, of course, be so clearly intended to qualify the acceptance and so incapable of any other reasonable construction that they would be as effectual for the purpose. But in the present case the words written above the acceptance are not "Payable to Delobbel Flipo only," which is the meaning sought to be attached to them, but " In favor of Delobbel Flipo only," which do not seem to me necessarily to bear the same meaning. The words "in favor of," when used in relation to a bill of exchange, do not ordinarily mean that it is payable only to the person in whose favor it is said to be drawn; the words are equally applied when the bill is made payable to his order. The words "In favor of," therefore, are properly paraphrased by "payable to, or to the order of;" but then it is said that the insertion of the word "only" after Flipo's name would show that this could not be the meaning intended. It must be remembered, however, that between these words and the ac