§ 3. QUASI-ACCEPTANCE.

Besides acceptance proper, as above described, various acts are called acceptance with some qualifying word; none of them having the effect of acceptance proper. Such acts Enumeration may be called quasi-acceptance. The following is of cases.

an enumeration of the same: Written acceptance on a separate paper not attached; oral acceptance; acceptance by conduct; acceptance for honor; promise to accept or 'virtual acceptance' so-called. These in order.

ceptance on separate instru

First then of written acceptance not on or attached to the bill. By this is meant what, if written on the bill, would be either an absolute or a qualified acceptance, ac- Written according to its terms; that is to say, it is either an absolute or a qualified promise to pay the sum ment. named in the bill, as distinguished from a promise to accept the same at some future time. The bill should be identified either in the acceptance or in the correspondence or negotiations relating to it, or at least be capable of identification by external evidence.

That such an acceptance differs essentially in legal effect from acceptance is clear. The Statute, following no doubt unwritten law merchant so far as there is any on the subject, declares that acceptance written elsewhere than upon the bill itself binds the acceptor only in favor of a person to whom the acceptance is shown, and then only in case he takes the bill for value on the faith of the acceptance.1 The act no doubt admits, as an incident, the authority and capacity of the drawer to draw the bill, in the absence of fraud, and also the genuineness of the drawer's signature when the acceptance is given after seeing the bill. Perhaps the acceptance also admits the capacity of the payee to indorse. The Statute is silent on these points. Probably acceptance by telegraph would be ac

ceptance within the meaning of the law.2

Telegraph.

1 N. I. L. § 141. Qu. whether there must also be a promise to such taker of the bill, where he is not the person to whom the acceptance is first given? Perhaps not.

2 See Henrietta Bank v. State Bank, 80 Texas, 648; Cases, 56; North

Oral accept

ance.

Secondly, of oral acceptance. Some remarks have already been made on this kind of acceptance, in speaking of acceptance proper; the effect of which was, that oral acceptance does not comply with the order except at the election of the holder. Any holder may, it seems, elect to have the benefit of it, even though not the one to whom the acceptance was immediately given.1

Much of what has been said concerning acceptance on a separate sheet applies to oral acceptance. The acceptance may be absolute or qualified; the bill should be identified by the acceptance or capable of identification; and the incidents of the contract are probably the same as in the acceptance just mentioned.

Statute of Frands as to oral accept

ance.

Oral acceptance then is not necessarily open to the objection that it is obnoxious to the provision of the Statute of Frauds which requires promises to answer for the debt or default of another person to be in writing. In accepting the acceptor ordinarily promises to pay a debt of his own, due the drawer of the bill, to another person, the payee or other holder of the bill. The Statute of Frauds does not affect an oral consent by the debtor to a request of the creditor to pay the debt to another. But it may be that the oral acceptor did not owe the drawer any debt, and was under no duty at all to him to accept the bill; if then the drawer owed the payee or other holder a debt or duty to be discharged by the bill, the oral acceptance might be within the Statute of Frauds.2

According to older authority, still maintained to a considerable extent, the oral undertaking in the case just put would not be within the Statute of Frauds if credit was given to the oral

Atchison Bank v. Garretson, 51 Fed. Rep. 167, 'acceptance' of a cheque by telegraph.

1 Putnam Bank v. Snow, 172 Mass. 569, 575-576; ante, p. 53. This case was a suit upon a promise to accept, not upon a direct oral acceptance; but the language is fortified by many cases cited.

2 See Walton v. Mandeville, 41 Am. Rep. 123; Manley v. Geagan, 105 Mass. 445; Pierce v. Kittredge, 115 Mass. 374. If the drawer did not owe the payee or holder, and the acceptor did not owe the drawer, the whole transaction, so far, would fall to the ground for want of consideration.

acceptor, by the payee or holder, at the time and as part of the transaction connected with the acceptance. According to that view, the acceptor incurs a debt of his own in the credit given by the payee or holder; and the acceptance therefore is only the acceptor's promise to pay his own debt. That view however has well been considered unsatisfactory.

The credit so given is not a 'debt or default' in the natural sense; and as there is nothing in the language of the Statute of Frauds to indicate that those words are not to be taken in their natural or primary sense, they should be taken in that sense. A 'debt' due by A to B imports, in the natural sense of the word, some benefit which A has obtained from B, and 'default' of A towards B some harm which A has caused to B. 'Credit' given by B to A, in respect of a transaction in which A has no interest or concern, except as his promise to pay creates it, does not fit the case. The authorities too appear to be inconsistent with themselves. For it seems to be agreed that if the oral promise was subsequent to the transaction in which the drawer became indebted or bound to the payee or holder, the true question is, Did the oral acceptor make his promise by reason of value received by him? That is, did any consideration move from the payee to the acceptor, to the latter's benefit? If the answer is in the negative, the acceptance is within the Statute of Frauds, and is not binding.1 Now if the test in this latter case is one of benefit to the acceptor, according to the natural meaning of the language of the Statute, it is hard to see why the same is not true where the transaction between the drawer and the payee or holder was contemporaneous with the acceptance, the acceptance being the inducement to the transaction. The language of the Statute is general, and should be taken in the same sense in all cases. The first of the views above mentioned confounds consideration with debt; the giving of credit makes consideration but not debt."

1 See Nelson v. Boynton, 3 Met. 396; Curtis v. Brown, 5 Cush. 488.

2 See Sutton v. Grey, 1894, 1 Q. B. 285; Manley v. Geagan, 105 Mass 445. And upon the whole subject see the very clear exposition of it in Harriman, Contracts, 196-199.

It should be particularly noticed that the Statute of Frauds is not satis

Thirdly, of acceptance by conduct. This too, it should first be noticed, is in effect oral acceptance, and therefore is or is not Acceptance by obnoxious to the Statute of Frauds in accordance conduct giv with what has been said. But there are special ing credit to features of acceptance by conduct, which justify

bill.'

giving it a separate designation.

Such acceptance might no doubt be given in different ways; but there appear to be but two or three recognized examples. One of them is by giving credit to the bill.' As we have already seen, the drawee has twenty-four hours for deciding whether he will accept or not; if he should retain the bill longer, he will be deemed to have accepted it, unless he was under no duty to return it or give answer to the order. Keeping it, when the drawee is under no duty to return it, does not give 'credit' to the bill, that is to say, it does not plainly lead the owner of it to suppose that it has been accepted.' But presumptively, it seems, for the drawee to retain the bill for more than twenty-four hours, knowing that it has been presented to him for acceptance, will amount to acceptance by conduct. The presumption could be overturned however not only by showing that the drawee was under no duty to return it, but that it was impracticable to return it within the time; in which latter case there would be no acceptance unless the bill was retained after it became practicable to return it.

Another example, and the only other one given in the Statute, is the destruction of the bill by the drawee. This too, no doubt, would be no more than presumptive acceptance, and capable of explanation in another sense. Thus the drawee might show that the act was one of mistake without fault on fied with the existence of a consideration to support the defendant's promise; there must also be a written promise.

1 Dunavan v. Flynn, 118 Mass. 537.

2 N. I. L. § 144. The Statute uses the word 'refuses' by the drawee within the time; but it seems that he refuses,' if he does not comply. Notice of dishonor could doubtless be given for failure to accept.

3 Id. 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 nonaccepted to the holder, he will be deemed to have accepted the same.'

his part, or that it was done at the request of the owner or of his agent.

This kind of acceptance operates only between the immediate. parties, unless the bill has actually come again into the possession of the owner. Obviously if it remains in the hands of the drawee, or if it has been destroyed by him and no copy of it made, no right of action upon it could be acquired by an indorsee. There could not be an indorsee of an instrument not delivered to him.

1

Nature and in

The contract will ordinarily be absolute, and the incidents the same, it seems, with those of the cidents of conacceptances already described.

tract.

Fourthly, of acceptance for honor. Such acceptance is also called acceptance supra protest, as it always follows protest, if received at all. It is not in use in this country, to Acceptance for the extent of custom; but the Statute provides for honor. it as if it were, adopting the law of England, where the law is only an expression of actual custom. It may be received either after protest for non-acceptance or 'for better security'; but the holder is not bound to receive it in either form. Receiving it has no effect upon the liability of the other parties to the bill.

Acceptance for honor must be in writing, must indicate that it is for honor, and must be signed by the person so accepting.* It may be for the honor of any or of all the parties For whom: by to the bill, and may state for whose honor it is whom. given; if it should not, it will be deemed to be for the honor of the drawer.5 The acceptance may be for but part of the sum named in the bill, and one person may accept for the honor of one person and another for that of another." According to the Statute, any person not a party liable on the bill may, with the holder's consent, intervene and accept supra protest." This, in

1 As in Dunavan v. Flynn, 118 Mass. 537.

2 N. I. L. Art. xiv.

• That protest for better security is not necessary, see In re English Bank, 1893, 2 Ch. 438. Such protest, not being for dishonor, cannot be followed by notice with any legal effect.

4 N. I. L. § 169.

• Id.

5 Id. § 170.

7 Id. § 168.