$ 16.

Limiting liability.

Waiving holder's duties.

The ordinary liability of the drawer to the holder is that if the bill be dishonored and due notice given he will compensate the latter section 55. He is in a sense after acceptance surety for the acceptor. The ordinary liability of an indorser to the holder is similar; and he is in the nature of a new drawer section 55, s-s. 2. The drawer may stipulate that he shall not be liable on the bill, and then the holder must look alone to the acceptor, and to any indorser who may be liable to him. Or the drawer may limit his liability as to amount or otherwise, and any indorser may do the same. In practice it not common for drawers to make such a stipulation; indorsers frequently do so. The form in which the latter generally negative liability is by writing before their indorsement the words "sans recours," or "without recourse." For all practical purposes an indorsement "without recourse" may be placed upon the same footing as a note payable to bearer or transferred by delivery. The party so making the transfer does not thereby incur the obligation or responsibility of an indorser: Dumont v. Williamson, 2 U. C. L. J. N. S. 219 (1866); Goupy v. Harden, 7 Taunt. 163 (1816); Rice v. Stearns, 3 Mass. 224 (1807); Ticonic Bank v. Smiley, 27 Me. 225 (1847); Harley v. Falconer, 32 Ala. 536 (1858); Hannum v. Richardson, 48 Vt. 508 (1875).

The duties of a holder of a bill to a drawer or indorser are to present it for acceptance and payment, or for payment only, according to its tenor, and in case of dishonor to give due notice to the drawer and indorsers, as provided in sections 39 to 52 inclusive. The drawer or any indorser may relieve the holder from these obligations. The usual form of effecting this is by using the words "return without protest," "protest waived," or "notice of dishonor waived." In the United States it has been held that where the waiver is embodied in the instrument itself, it enters into the contract of every party who signs it:

Bryant v. Merchants Bank, 8 Bush (Ky.) 43 (1871); § 16. Bryant v. Lord, 19 Minn. 397 (1872); Parshley v. Heath, 69 Me. 90 (1879); Pool v. Anderson, 116 Ind. 94 (1888); Daniel, $$ 1092, 1093. Such is also the law of France: Cass. 9th Nov. 1870, Dalloz 70, 1, 350. Our statute would appear to contemplate the restriction of the waiver to the drawer or indorser who expressly waives any of the holder's duties as regards himself."

46

accep

tance.

17. The acceptance of a bill is the signification Definition by the drawee of his assent to the order of the drawer: Imp. Act, s. 17 (1).

When the drawee writes his name on the bill and delivers it or gives notice he becomes the acceptor and his act is irrevocable: section 21. No one can accept a bill except the drawee or an authorized agent, save the referee in case of need, or an acceptor for honor: sections 14 and 64. Before the law was so strict in requiring an acceptance to be signed by the acceptor, there was also laxity in other respects as will be seen from some of the illustrations given below.

In some instances where a bill is drawn upon the officer of a corporation it is frequently difficult to decide whether the drawee is the corporation or the officer individually. As will be seen from some of the illustrations below the tendency has been to hold the officer personally liable. The maker of a promissory note usually corresponds to the acceptor of a bill. The decisions regarding promissory notes made by officers of corporations show that personal liability is less readily presumed than in the case of bills. The difference arises largely from the rule of the present section that it is the drawee who must accept a bill.

Where a bill is addressed to a firm it is the same in effect as though addressed to all the partners, and the

$ 17.

Requisites of acceptance.

In writing.

14. A bill addressed to the "B. Co." is accepted thus,J. S. and H. T., directors of the B. Co." This is an acceptance by the company and not by the directors personally: Okell v. Charles, 34 L. T. N. S. 822 (1876).

15. A bill addressed to "J. B., agent of the L. Co." is accepted thus," Accepted on behalf of the company.-J. B." He is personally liable as acceptor: Herald v. Connah, 34 L. T. N. S. 885 (1876); Mare v. Charles, 5 E. & B. 978 (1856).

16. A bill was drawn on a firm in liquidation, and the agent who was winding it up accepted it for his own purposes, in the name of one of the former partners, and in his own. Held, that the former partner was not liable: Odell v. Cormack, 19 Q. B. D. 223 (1887).

2. An acceptance is invalid unless it complies with the following conditions, namely:

(a.) It must be written on the bill and signed by the drawee. The mere signature of the drawee without additional words is sufficient;

(b.) It must not express that the drawee will perform his promise by any other means than the payment of money: Imp. Act, s. 17, (2).

(a) "According to the law merchant, an acceptance may be (1) expressed in words, or (2) implied from the conduct of the drawee. (3) It may be verbal or written. (4) It may be in writing on the bill itself or on a separate paper. (5) It may be before the bill is drawn or afterwards. Acceptance by telegram has been held sufficient": Daniel, § 496. In nearly all countries these provisions have been restricted by statute.

It was held in England that the Statute 3 & 4 Anne, c. 9, which was intended to require a written acceptance of inland bills had not that effect: Wilkinson v. Lutwidge, 1

Str. 648 (1726); Lumley v. Palmer, 2 Str. 1000 (1735); § 17. Pillans v. Van Microp, 3 Burr. 1663 (1765). The Act 1 & 2 Geo. 4, c. 78, was passed to make a written acceptance necessary in such cases, and the Mercantile Amendment Act, 1856, 19 & 20 Vict. c. 97, s. 6, required an acceptance on any bill, foreign or inland, to be in writing and signed by the drawee. It was held in Hindhaugh v. Blakey, 3 C. P. D. 136 (1878) that the signature alone of the acceptor was not sufficient, and, the Bills of Exchange Act, 1878, 41 & 42 Vict. c. 13, was passed to declare the mere signature sufficient.

In Lower Canada a parol acceptance was formerly held to be sufficient: Lagueux v. Everett, 1 Rev. de Leg. 510 (1817); Jones v. Goudie, 2 Rev. de Leg. 334 (1820). The Act of 1849 required an acceptance to be in writing on the bill, and this was subsequently embodied in the Civil Code, Art. 2292. The same law was introduced into Upper Canada by 7 Wm. 4, c. 5; into Nova Scotia by 28 Vict. c. 10; into New Brunswick by 6 Wm. 4, c. 49; and into Prince Edward Island, by 27 Vict. c. 6.

These various provisions were consolidated and made applicable to the whole Dominion in section 4 of chapter 123 of the Revised Statutes of Canada. It is in effect reproduced in the first part of the above clause which says, "It must be written on the bill." As to what is a writing, and what is recognized as a signature, see notes on section. 3, ante pp. 36 and 39.

bill.

The acceptance and signature of the drawee are usually Where on written across the face of the bill; but its direction and position are immaterial, provided it appear that it was meant to be an acceptance. It may be below the drawee's name or above it, and parallel to it, or it may even be on the back of the bill: Young v. Glover, 3 Jur. N. S. 687 (1857); 1 Daniel § 498.

§ 17.

Source of law.

Must pay in money.

The whole clause is copied from section 17 of the Imperial Act, the latter part, relating to the signature of the drawee, having been taken from the Mercantile Amendment Act, 1856, and the Bills of Exchange Act, 1878, as stated above. These Statutes were not in force in any part of Canada, except the Act of 1856 in Manitoba, British Columbia, and the North-west Territories, having been. introduced there as part of the law of England, as mentioned in the introduction. However, the various provincial statutes above mentioned were very similar to the Imperial Act, 1 & 2 Geo. 4, c. 78, and it was held in England that the signature alone of the drawee on the bill was a sufficient acceptance: Leslie v. Hastings, 1 M. & Rob. 119 (1831).

In New Brunswick, under the Act requiring an acceptance to be in writing, a bill was drawn upon a bank payable in three instalments. When the first instalment became due, the cashier paid it, and indorsed on the bill, "Paid on the within $741, Aug. 12, 1861." This was held. to be an acceptance for the remaining instalments: Berton v. Central Bank, 10 N. B. (5 Allen), 493 (1863). This would not be an acceptance under the present Act for want of a signature.

In some of the United States the old common law rule of a verbal acceptance still prevails.

(b) A bill may be varied in certain respects by the acceptance: section 19. But the drawee does not become an acceptor if he proposes to satisfy the bill in anything except money. This was the old law. As to what is money, see notes on section 3, ante p. 41.

An acceptance to pay by another bill is not an accepttance: Russell v. Phillips, 14 Q. B. 891 (1850).

A Promise to Accept is not an acceptance. The drawee who gives such a promise may be held liable on his con