The acceptor is now considered in all cases as the party primarily liable on the bill. He is to be treated as the CHAPTER XVI. principal debtor to the holder, and the other parties as Liability of sureties liable on his default (m). The acceptor of a bill acceptor. stands for most purposes in the same situation as the maker of a note, and therefore most of the following observations will apply to the latter also. The acceptor's liability, once complete, can only be How disdischarged by payment, or other satisfaction, cancella- charged. tion or alteration, waiver (or release, which is merely a more formal waiver), or transfer to him in his own right (n). Payment, satisfaction, and release we shall consider hereafter. The acceptor is at liberty to cancel his acceptance at any time before delivery, or notice of the acceptance to the holder (o), or person entitled to the bill. A bill is discharged when it has been intentionally can- Cancellation. celled by the holder or his agent, and the cancellation is apparent thereon. And so any party liable on a bill may be discharged by the intentional cancellation of his signature by the holder or his agent; but in such case any indorser who would have had a right of recourse against the party whose signature is cancelled, is also discharged (p). (m) Fentum v. Pocock, 5 Taunt. 192; 1 Marsh. 14. (n) Transfer to him in his own right at or after maturity is a discharge of the bill, Code, s. 61; but if the converse hold good by implication, not so if the transfer be to him in someone else's right, as, for example, as trustee or executor; which has long been the rule in equity. A bill transferred to the acceptor before due is said to be "retired," and can in general be re-issued. (0) Cox v. Troy, 5 B. & Ald. 474; 24 R. R. 460; Bentinck v. Dorrien, 6 East, 199; Marius, 20; Ralli v. Denistoun, 6 Ex. 483; Chapman v. Cottrell, 34 L. J., Ex. 186; Van Dieman's Land Bank v. Victoria Bank, L. R., 3 Pr. C. 526; 40 L. J., Pr. C. 28; Code, s. 21. (p) Code, s. 63. In general, subsequent parties, from whom payment is enforced when the bill is dishonoured, have a right of recourse against prior parties; CHAPTER Cancellation by mistake. By waiver. A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative; but when a bill or any signature thereon appears to have been cancelled, the burden of proof lies on the party alleging the same to have been done unintentionally, or under a mistake, or without authority (7). Where an acceptance has been cancelled by mistake, it is the usage in the City of London to return the bill with the words "cancelled by mistake" written on it. The proper and safe mode of cancelling is to draw the pen through the name, so as to leave it legible (r). If a banker with whom a bill is made payable by the acceptor, cancel the acceptance by mistake, without any want of due care, and return the bill defaced, refusing to pay it, he does not thereby necessarily incur any legal liability; but if in so doing he be guilty of want of due care, an action may lie against him at the suit of the holder, for the special damage sustained by the cancellation of the bill (s). It is a general rule of law, that a simple contract may, before breach, be waived or discharged, without a deed and without consideration; but after breach there can be no discharge, except by deed, or upon sufficient consideration (/).. To this rule it has been repeatedly held that contracts on bills of exchange form an exception, and that the liability of the acceptor or other party, remote or immediate, though complete, may be discharged by an express renunciation of his claim on the part of the holder (u), without consideration. : (4) Code, s. 63 (3); Warwick v. Rogers, 5 M. & G. 340; Raper v. Birkbeck, 15 East, 17; 13 R. R. 354; Davidson v. Cooper, 11 M. & W. 778 Sweeting v. Halse, 9 B. & C. 365; 4 M. & R. 287 : Dominion Bank v. Anderson, 15 C.o. S. 408. S. C. Cancellation, though it destroys rights on the bill as payment does, need not affect other rights in the same way. Yglesias v. Mercantile Plate Bank, L. R., 3 C. P. D. 60, 330. (r) Wilkinson v. Johnson, 3 B. & C. 428; 27 R. R. 393; Ingham v. Primrose, 28 L. J., C. P. 294; 7 C. B., N. S. 82. (8) Novelli v. Rossi, 2 B. & Ad. 757; 36 R. R. 736; Warwick v. Rogers, 5 M. & G. 340. (f) Com. Dig. Action on the Case in Assumpsit, G.; Fitch v. Sutton, 5 East, 230; Dobson v. Expie, 26 L. J., Ex. 241; 2 H. & () The law seems now to be so settled in accordance with prior decisions, and with the law of France and other countries, where the distinction between simple contracts and contracts under seal is unknown. "Le créancier peut renoncer à son droit d'exiger le payement de ce que lui doit son débiteur; c'est ce qu'on appellefaire remise." Pardessus, Droit Commercial, vol. 1, p. 272, 6th ed. Paris. See the judgment of Parke, B., in Foster v. Dawber, 6 Exch. 851; see also Nouguier des Lettres de Change, vol. 1, p. 353. See also Dobson v. Espie, 26 L. J., Ex. 240 2 H. & N. 79; and Story on Bills, s. 266. The Codeseems to require no consideration for either cancellation or waiver. This exception seems at first sight to violate a fundamental rule, but the reason may be that the distinction between a release under seal and a release not under seal is quite unknown in most foreign countries. An express and complete renunciation by the holder of his claim on any party to the bill is therefore according to the law merchant equivalent to a release under seal. And as it would be highly inconvenient to introduce nice distinctions and nice questions of international law, all the contracts on a foreign bill, though negotiated or made in England, and all the contracts on an inland bill, depending as they do on the same law merchant, may be so released. And such a relaxation of the general rule in the case of bills of exchange is not unreasonable on another ground. The money due at the maturity of a bill of exchange is in practice expected to be paid immediately and in many cases with remedies over in favour of the debtor. Parties liable, who are expressly told that recourse will not, in any event, be had to them, are almost sure, in consequence, to alter their conduct and position. Joint indorseos against acceptors: It was proved that the plaintiffs knew the acceptance was for the accommodation of the drawer, and that they had said, at a meeting of the defendants' creditors, "that they looked to the drawer, and should not come upon the acceptors." They had at this time goods of the drawer in their hands, which afterwards turned out of little value. Lord Ellenborough directed the jury to consider, "whether the language employed by the plaintiffs amounted to an absolute unconditional renunciation by them, as holders of the bill, of all claims in respect of it upon the defendants, as acceptors. In that case the acceptors were discharged from their liability: the holders had made their election, and could now only proceed against the drawer. On the other hand, if the words only imported that they looked to the drawer in the first instance, that it was not then necessary to come upon the acceptors, and that they should not resort to them if satisfaction could be obtained in another quarter, they did not waive their remedy by this conditional promise, and the acceptors still continued liable until the bill should be actually paid" (x). Receiving interest from the drawer will not discharge the acceptor. Nothing short of an express discharge will do so (y). (c) Whatley v. Tricker, Camp. 35; 10 R. R. 623. (y) Dingwall v. Dunster, Doug. 235; and Black v. Peel, and Walpole v. Pulteney, there cited; Anderson v. Cleveland, 13 East, CHAPTER CHAPTER XVI. Security by specialty. The renunciation must be absolute and unconditional; and in writing, unless the bill be delivered up to the acceptor (z). The bill itself is discharged when the holder at or after maturity renounces his rights against the acceptor. And so the liabilities of any party to the bill may be renounced by the holder before, at, or after maturity; but the rights of a holder in due course without notice of the renunciation will not be affected thereby (a). A plea of waiver must state that the party waiving was the holder of the bill at the time of the waiver (b). The liability of the acceptor, as such, will also be extinguished, by taking from him a co-extensive security by specialty. But if the new security recognise the bill or note as still existing, it is not extinguished (c). Where one of three partners, after a dissolution of partnership, undertook, by deed made between the partners, to pay a particular partnership debt on two bills of exchange, and that was communicated to the holder, who consented to take the separate notes of the one partner for the amount, strictly preserving his right against all three, and retained possession of the original bills, it was held that, the separate notes having proved unproductive, he might still resort to his remedy against the other partners, and that the taking, under these circumstances, the separate notes and even So it has been held, that a right () Or his legal representa- (a) Code, s. 62. No consideration is required for a waiver. Foster v. Dawber, 6 Ex. 851. The construction of a written renunciation, like that of other written documents, is for the Court. See In re George, supra; where one was held revocable and therefore bad. If there be a partial or conditional renunciation, it should seem that it may be available between the actual parties if founded on good consideration. Parker v. Leigh, 2 Stark. 228; Farquhar v. Southey, 2 C. & P. 497; 31 R. R. 689; Owen v. Pizey, 11 W. R. C. P. 21. It is to be observed that the words in sub-sect. (2) are "in like manner," thus leading to a possible inference that a writing may now be required in renouncing another party's liability, though the other alternative-deliverywould be inapplicable. (b) Steele v. Harmer, 15 L. J., Ex. 217; 14 M. & W. 136; 4 Ex. 1. (c) Ansell v. Baker, 15 Q. B. 20; Twopenny v. Young, 3 B. & C. 208; 5 D. & R. 259. XVI. afterwards renewing them several times successively, did CHAPTER not amount to satisfaction of the joint debt (d). But, in general, the taking a separate bill of one of two joint acceptors of a former bill is a relinquishment of all claim on the former security (e). The acceptor of a bill engages absolutely to pay according Contract of to the tenor of his acceptance; he is also precluded from the acceptor. denying to holder in due course; the existence of the drawer: the genuineness of his signature: his capacity and authority to draw the bill: In the case of a bill payable to the drawer's order; the then capacity of the drawer to indorse, but not the In the case of a bill payable to the order of a third person; his then capacity to indorse, but not the genuineness Hence the acceptor cannot be admitted to prove that the drawer's signature was forged (f); or to say that the payee being a bankrupt could not indorse (g), or even to say that a second bankruptcy before the acceptance precluded him from indorsing, though the effect of such second bankruptcy were to vest, ipso facto, all the bankrupt's property in his assignees (h). Neither can the acceptor be allowed to defeat the indorsement by setting up the infancy of the payee (i). Nor can the acceptor plead that the drawer to whose order the bill was made payable was a corporation, having no authority to indorse (k); nor that the drawer was a married woman, although as the husband might sue (d) Bedford v. Deakin, 2 B. & Ald. 210; 2 Stark. 178. (e) Evans v. Drummond, 4 Esp. 89; Reed v. White, 5 Esp. 122; Thompson v. Percival, 5 B. & Ad. 925; 3 N. & M. 667. (f) Code, s. 54; Price v. Neal, 3 Burr. 1354; 1 W. Bl. 390; Porthouse v. Parker, 1 Camp. 82; 10 R. R. 637; Prince v. Brunatte, 1 Bing. N. C. 435; 1 Scott, 342; 3 Dowl. 382; Wilkinson v. Lutwidge, 1 Stra. 648; Jenys v. Fawler, 2 Stra. 946, and see Bass v. Clive, 4 M. & Sel. 13; 4 Camp. 78; Phillips v. Im Thurn, L. R., 1 C. P. 463; 35 L. J. 220; Garland v. Jacomb, L. R. 8 Ex. 216. In L. & S. W (g) Drayton v. Dale, 2 B. & C. 473. (h) Pitt v. Chappelow, 8 M. & W. 616. (i) Taylor v. Croker, 4 Esp. 187; Jones v. Darch, 4 Price, 300; 18 R. R. 720. Code, s. 22. (k) Halifax v. Lyle, 19 L. J., Exch. 197; 3 Exch. 446. Code, s. 22. |