fact that the drawer and indorsers are discharged. Moreover, where such an acceptance does not prejudice the rights of the drawer and indorsers, that is, where the qualification is immaterial or is assented to by them, they are not discharged.1 Parties subsequent to the qualified acceptance of course enter into the contract on the basis of the acceptance as qualified and are bound by it. Parties prior to it, who assent, waive their right to object. The materiality of an alteration in the tenor of the bill is well brought out in two cases, one of which was where the draft was addressed to Cobourg, and accepted payable at Port Hope, a town some miles distant; 17 in the other, where the bill

16 In Smith v. Abbott the defendant accepted a bill to pay when the goods for which it was drawn were sold. As the plaintiff submitted, this was held good, though the plaintiff might have refused such acceptance, and have protested the bill. 2 Strange, 1152. In Walker v. Atwood a bill without a day of payment was accepted by the drawee to be paid on a certain date after it was presented. Although bills without such date when payable are due at sight, in an action against the acceptor the acceptance was held good. Yet by the acquiescence of the holder in the qualified acceptance prior holders would have been discharged. 11 Mod. 190. Shackelford v. Hooker, 54 Miss. 716, Johns. Cas. Bills & N. 78. "An acceptance is either general or qualified. A general acceptance assents without qualification to the order of the drawer. A qualified acceptance in express terms varies the effect of the bill as drawn." N. I. L. § 139. If the acceptor desires to qualify his acceptance, he must do so in clear and unequivocal terms, so that any person taking the bill could, if he acted reasonably, understand that it was subject to a qualification. Thus where a bill of exchange was drawn by L. Delobbel Flipo, payable "to the order of L. Delobbel Flipo only," and was stamped by the drawees across the face of the bill, "Accepted payable at Alliance Bank London for" the drawees, and above these words the drawee wrote, "In favor of L. Delobbel Flipo only. No. 28"-it was held, Lords Bramwell and Morris dissenting, that in view of the context, the words "in favor of Mr. L. Delobbel only" did not constitute a qualification of the acceptance, and the acceptance was therefore general. Meyer v. Decroix [1891] A. C. 520 (B. E. A.). See, also, Lehnhard v. Sidway, 160 Mo. App. 83, 141 S. W. 430 (N. I. L.). It would seem that there may be a qualified acceptance of a non-negotiable bill. Knefel v. Flanner, 166 Ill. 147, 46 N. E. 762.

17 Niagara Dist. Bank v. Fairman & W. Machine Tool Mfg. Co., 31 Barb. (N. Y.) 403. But see Brown v. Jones, 125 Ind. 375, 25 N. E. 452, 21 Am. St. Rep. 227.

was drawn payable in New York generally, and accepted payable "at Continental Bank, New York." 18 In this last case the fixing or designating a specific place in the city to which the bill was addressed was no hardship—no material change; while compelling an indorser to be ready at some distant place was a hardship and a material change.

There is a further distinction maintained by the authorities, which is perhaps rather of form than of substance. Where the acceptance varies the offer contained in the bill as to the time, place, or mode of payment, it is a qualified acceptance.19 Where, however, a variation is introduced into the acceptance of the bill in the nature of a condition, the acceptance is called "conditional." 20 In the last class of cases the plaintiff as a part of his case must show that the condition has been performed before the liability of the acceptor can be deemed to have accrued.21 A common example of this is an acceptance to pay "when in funds," 22 which means that when the acceptor has cash which the drawer has a right to demand and receive he will then pay the bill.23 This manner of acceptance, as well as the qualified one, creates a new contract, and is governed by the rules and reasons we have just laid down. The holder may elect to reject it altogether, and at once give notice either

*

18 Troy City Bank v. Lauman, 19 N. Y. 477. "An acceptance to pay at a particular place is a general acceptance, unless it expressly states that the bill is to be paid there only, and not elsewhere." N. I. L. § 140. "An acceptance is qualified which is local; that is to say, an acceptance to pay only at a particular place," etc. Id. § 141. 19 N. I. L. §§ 139, 141; Byles, Bills, 316; Story, Bills, § 204; Daniel, Neg. Inst. § 515.

20 N. I. L. § 141, classes qualified acceptances as (1) conditional; (2) partial; (3) local; (4) qualified as to time; and (5) where the acceptance is of some, but not all, of the drawees.

21 Gammon v. Schmoll, 5 Taunt. 344; Nagle v. Homer, 8 Cal. 358; Read v. Wilkinson, 2 Wash. C. C. 514, Fed. Cas. No. 11,611; Gooding v. Underwood, 89 Mich. 187, 50 N. W. 818; Ferguson v. Davis, 65 Mich. 677, 32 N. W. 892; Storer v. Logan, 9 Mass. 55; Barnsdall v. Waltemeyer, 142 Fed. 415, 73 C. C. A. 515; Crutchfield v. Martin, 27 Okl. 764, 117 Pac. 194.

22 Smith v. Abbott, 2 Strange, 1152; Marshall v. Clary, 44 Ga. 513. 23 Wintermute v. Post, 24 N. J. Law, 420; Campbell v. Pettengill, 7 Greenl. (Me.) 126, 20 Am. Dec. 349; Owen v. Lavine, 14 Ark. 389.

of non-acceptance or of protest, or he may, if willing to accept the offer, give notice to prior parties, and they in turn may assent to it, and thus become bound.24 This is, however, not always the rule with regard to the drawer as a prior party. If, as is sometimes the case, the drawer makes a draft upon a drawee without having a right to do so, there is no more reason why the courts should release him from his contract than that they should seek to protect him by giving him notice of dishonor in case of a refusal to accept or to pay. In both cases the holder is injured by the act of the drawer, and is held bound.25

WHO MAY ACCEPT

46. The only person permitted by the law merchant to be an acceptor is the person to whom the bill is addressed. Another person is liable only upon a collateral undertaking.

EXCEPTION-An acceptor for honor.

The arbitrary custom of merchants is said by the courts to be the reason of this rule.20 26 Though it is not the language of the courts, yet it so coincides with the fundamental theory of contracts that we add as an additional reason that

24 "When the drawer or an indorser receives notice of a qualified acceptance, he must, within a reasonable time, express his dissent to the holder, or he will be deemed to have assented thereto." N. I. L. § 142.

25 Daniel, Neg. Inst. § 511.

26 See N. I. L. § 132. The drawee cannot make one of the other parties to his contract his agent to accept for him. Where drafts on defendant bank were presented at plaintiff bank, the vice president of plaintiff bank, with the verbal authority of the cashier of the defendant bank received over the telephone, wrote, "O. K. by Tschirgi, Cashier, 11/22/10," it was held that this was not an acceptance by the drawee, for one of the parties could not be the agent of the other party to accept for him without the full knowledge of the principal. This was therefore not an acceptance under section 132, N. I. L., requiring the acceptance of a bill to be signed by the drawee. United States Nat. Bank of Vale v. First Trust & Savings Bank of Brogan, 60 Or. 266, 119 Pac. 343 (N. I. L.).

no person other than the drawee can be acceptor, because such a person would be in a measure a stranger to the contract.27 He is not, as appears from the face of the instrument, indebted to, nor has he funds of, the drawer. It is true, his intention may have been to signify to the parties to the bill that he was willing to pay and would pay the instrument. But he was not the person to whom the proposition or on whom the order was made. He was not a party to the contract. If the courts were to treat him as an acceptor, they would make a contract for the drawer with a party with whom, as far as it can be gathered from the bill, the drawer had no intention of contracting. This, though somewhat vaguely stated, seems to be the underlying principle in Walker v. Bank of State of New York.28 In that case the bill was addressed to Mr. E. C. Hamilton, of New York, and was "accepted payable at American Ex. Bank. [Signed] Empire Mills. By E. C. Hamilton, Treas." The question was whether this was an acceptance, and the court said this was an acceptance of the Empire Mills, not a party to the contract. This point is brought out more clearly in some of the English cases. In Jackson v. Hudson a bill was addressed to Mr. I. Irving, and accepted, "I. Irving. Joseph Hudson." This was a case of a sale of goods to Irving. Hudson accepted, by way of making the acceptance doubly sure. But Lord Ellenborough said Hudson's undertaking was a collateral one. Yet, whatever its effect, it was not an acceptance.30 This rule is subject to exceptions, to

29

27 HEENAN v. NASH, 8 Minn. 407 (Gil. 363), 83 Am. Dec. 790, Moore Cases Bills and Notes, 93; Johns. Cas. Bills & N. 65; Raborg v. Peyton, 2 Wheat. 385, 4 L. Ed. 268.

28 Walker v. Bank of State of New York, 13 Barb. (N. Y.) 636; Id., 9 N. Y. 582.

29 Jackson v. Hudson, 2 Camp. 447.

30 Davis v. Clarke, 6 Q. B. 16. In this case the maker drew a bill of exchange payable to himself or order, and addressed also to himself, and a third party wrote his name under the word "Accepted.” It was held that such third party could not be sued as an acceptor, on the ground that he was not the acceptor of a bill of exchange directed to him. See, also, Steele v. McKinlay, 5 App. Cas. 754; Jenkins v. Coomber, [1898] 2 Q. B. 168; May v. Kelly, 27 Ala. 497; Wal

some of which we have before called attention. We have seen that if it were clear to whom the bill is meant to be addressed, and the acceptance is made by such a person, then the acceptance is sufficient. This is based upon the case of Gray v. Milner,31 where an instrument was addressed "Payable at No. 1 Wilmot St.," and the words "Accepted, Charles Milner," were treated as a proper acceptance, because such an address could only mean the person residing there. This rule has been followed in this country, and it is now probably the law. In addition to this exception, there are others. A draft may be accepted by the drawee in a name other than the one used in the draft, if there was a misnomer of the drawee and it was accepted by the person to whom it was intended to be addressed.32 The acceptor for honor-a branch of this subject to be discussed later on-is also a modification of this rule. Besides these instances, an agent may accept for and in the name of the principal, but not in his own name, because that is his individual acceptance, and not the acceptance of the drawee. If the bill be addressed to the agent, he cannot accept

34

33

ton v. Williams, 44 Ala. 347. But Jackson v. Hudson, 2 Camp. 447, might now, it seems, be decided differently in both England and the states which have adopted the N. I. L., and the defendant would be held as an irregular indorser. Glenie v. Bruce-Smith, [1908] 1 K. B. 263; Haddock, Blanchard & Co. v. Haddock, 192 N. Y. 499, 85 N. E. 682, 19 L. R. A. (N. S.) 136. See p. 190, note 35, infra.

31 Gray v. Milner, 8 Taunt. 739. See criticism of this case, ante, p. 82.

32 Hascall v. Life Ass'n of America, 5 Hun (N. Y.) 151. See N. I. L. § 43.

33 Thom. Bills, 211.

34 Daniel, Neg. Inst. § 487. A bill was directed to an unincorporated company, and was accepted for it by one of its members, who signed as manager. In an action on this it was claimed that such acceptance did not bind the party accepting, because he had no authority. This, however, was held not to affect his personal liability, as it was shown that he was one of those associated under the name of the company to whom the bill was directed. Owen v. Van Uster, 20 Law J. C. P. 61. To the same purpose, see Nicholls v. Diamond, 9 Exch. 154.