38. An acceptance is either,

(a) general; or,

(b) qualified.

38

Kinds.

2. A general acceptance assents without qualifi- General. cation to the order of the drawer. 53 V., c. 33, s. 19 (1). Imp. Act, Imp. Act, ibid.

The usual way of accepting a bill generally, is for the Acceptdrawee simply to write his name across the face of the bill ance. under the word "accepted," adding the date if it be payable at or after sight. It is sufficient if he simply sign his name: sec. 36. He may also name a particular specified place of payment as provided in sub-section 4 without making his acceptance a qualified one. The definition of a general acceptance given above is taken from the Imperial Act without change, but the effect of the change made in sub-section 4 and in sections 88 and 93 is to materially change the law.

The holder of a bill may refuse to take a qualified acceptance, and if he does not obtain a general acceptance he may treat the bill as dishonoured by non-acceptance: sec. 83. An acceptance will be construed as a general one whereever practicable, and a memorandum of a wrong due date in a bill was held not to vary its effect or to be a qualified acceptance, but that anything in an acceptance contrary to the tenor of the bill should be in the clearest language: Fanshawe v. Peet, 26 L. J. N. S. 314 Ex. (1857).

A bill of exchange being drawn by L. D. Flipo, payable to order L. D. Flipo," the drawees erased the word "order," and accepted the bill "in favor of L. D. Flipo only, payable at the Alliance Bank, London." In an action upon the bill by the indorsees for value against the acceptors it was held by the English Court of Appeal, reversing the decision of the lower Court, that the acceptance did not vary the effect of the bill, as drawn, and that it was a general acceptance of a negotiable bill, and the action was maintainable: Decroix v. Meyer, 25 Q. B. D. 343 (1890). The decision was affirmed by the House of Lords: [1891] A. C. 520.

M'L.B.E.A.-8

§ 38

Qualified.

Condi

tional.

Partial.

If a qualified acceptance is taken, it discharges the drawer and indorsers if they have not authorized it, or disapprove on receiving notice: sec. 84.

3. A qualified acceptance in express terms varies the effect of the bill as drawn and in particular, an acceptance is qualified which is,

(a) conditional, that is to say, which makes payment by the acceptor dependent on the fulfilment of a condition therein stated;

(b) partial, that is to say, an acceptance to pay part only of the amount for which the bill is drawn;

Time. (c) qualified as to time;

Drawees. (d) the acceptance of some one or more of the drawees, but not of all. Imp. Act, ibid.

Condition

ance.

53 V., c. 33, s. 19 (2).

(a) Conditional Acceptance.-A bill of exchange is an unconditional order to pay; but the acceptance may be conditional without destroying its validity. On the fulfilment of the condition it becomes absolute and the acceptor liable. Miln v. Prest, 4 Camp. 393 (1816).

Where the acceptance on a bill is unconditional, parol al accept- evidence cannot be received to show that it was accepted conditionally Bradbury v. Oliver, 5 U. C. O. S. 703 (1839). Conditional acceptances were not recognized in the old French law: Pothier, Change, No. 47: nor are they under the Code de Commerce: Art. 124. England and the United States are said to be the only countries which acknowledge them.

ILLUSTRATIONS.

The following are examples of conditional acceptances:

1. If a certain house shall be finished: Dufresne v. Jacques Cartier Building Society, 5 R. L. 235 (1873).

2. When in funds from the estate of C.: Potters v. Taylor, 20 N. S. (8 R. & G.) 362 (1888).

3. Provided they shall have earned that sum: McLean v. Shields, 1 Man. 278 (1884).

4. When certain debentures are sold: Arthur, 5 Man. 381 (1889).

$38

Condi

Ontario Bank v. Mc- tional ac

5. As soon as he should sell such goods: Smith v. Abbott, 2 Strange 1152 (1741).

6. As remitted for: Banbury v. Lissett, 2 Strange, 1211 (1744),

7. When he would obtain those funds from France: Mendizabal v. Machado, 3 Moore & S. 841 (1833).

8. On condition that it be renewed: Russell v. Phillips, 14 Q. B. 891 (1850).

9. On giving up bills of lading: Smith v. Vertue, 9 C. B. N. S. 214 (1860).

(b) Partial Acceptance.-A bill may be validly accepted for part: Petit v. Benson, Comberbach, 452 (1697): Wegersloffe v. Keene, 1 Str. 214 (1709). In this form of qualified acceptance, the drawer and indorsers have no opportunity of freeing themselves by their dissent. The holder should give due notice of the partial dishonor: sec. 84; Pothier, Change, No. 49; Code de Commerce, Art. 124.

(c) Qualified Acceptance as to Time.-The acceptor may vary the time of payment named by the bill; and if none be named he may fix a time and he will be bound by it: Walker v. Atwood, 11 Mod. 190 (1709); Russell v. Phillips, 14 Q. B. 891 (1850); Pothier, Change, No. 49.

(d) Acceptance by Part of Drawees.-If there are several drawees and they do not all accept, those who do are bound. A partner may accept in his own name a bill addressed to his firm and it is a valid acceptance: Owen v. Van Uster, 10 C. B. 318 (1850).

The list of qualified acceptances given in this section may not cover the whole ground. Any acceptance which by its terms varies the effect of the bill as drawn would be a qualified acceptance, although it might not literally be within any of the classes enumerated. Of the corresponding section in the Imperial Act, the Master of the Rolls says, in Decroix v. Meyer, 25 Q. B. D. 348 (1890):-"I think it is

ceptances.

§ 38

Specified place.

true to say in section 19 of the Act the examples given of a qualified acceptance are not exhaustive and that there might be other cases of qualified acceptances, when the acceptance in express terms varied the effect of the bill as drawn."

4. An acceptance to pay at a particular specified place is not on that account conditional or qualified. 53 V., c. 33, s. 19 (2). Imp. Act, ibid.

This sub-section differs from the Imperial Act. It is a substitute for clause (c) of section 19 (2), one of the examples of a qualified acceptance, and which reads as follows: "(c) local, that is to say, an acceptance to pay only at a specified place. 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."

At partiPrior to 1820 it was a point much disputed in England cular place whether a bill made or accepted payable at a particular place required to be presented there in order to charge the acceptor, drawer and indorsers. In Rowe v. Young, 2 B. & B. 165 (1820) it was decided by the House of Lords that such an acceptance was a qualified acceptance, rendering it necessary in an action against the acceptor to prove presentment at such place. The practice of making bills payable at a banker's had become general and was found to be a great convenience. If this were held to be a qualified acceptance it would require the assent of the drawer and indorsers. To overcome the effect of the decision in Rowe v. Young, the Act 1 & 2 Geo. IV. c. 78, was passed, declaring an acceptance to pay at a particular place a general acceptance, unless made payable there" only and not otherwise or elsewhere." Clause (c) of section 19 of the Imperial Act above quoted is a reproduction of this Act. A similar Act applicable also to promissory notes was passed in Upper Canada in 1837 as 7 Wm. IV. c. 5. This was embodied in the Con. Stat. U. C. c. 42, as sections 5 and 6, and appears in chapter 123 of the Revised Statutes of Canada, 1886, as section 16, but remained applicable to Ontario alone, and was repealed by the present Act. For cases where bills and notes omitting the restrictive words were held to be payable generally, see Commercial Bank v. Johnston, 2 U. C. Q. B. 126 (1845), and Bank of

at a

U. C. v. Parsons, 3 U. C. Q. B. 383 (1846). On such a note $38 payable in Scotland or the United States the holder could not recover the difference of exchange or the damage allowed Payable on foreign notes: Wilson v. Aitkin, 5 U. C. C. P. 376 (1855); particular place. Meyer v. Hutchinson, 16 U. C. Q. B. 476 (1858); Hooker v. Leslie, 27 U. C. Q. B. 295 (1868). A clause to the same effect was made applicable to Lower Canada in 1849 by 12 Vict. c. 22, s. 7; but it was repealed the next year by 13 & 14 Vict. c. 23, and replaced by the following which subsequently appeared in the Civil Code as Art. 2307: "If a bill of exchange be made payable at any stated place, either by its original tenor or by a qualified acceptance, presentment must be made at such place." In Prince Edward Island an Act to the same effect as 1 & 2 Geo. IV. c. 78, was passed, 27 Vict. c. 6. This was repealed by the Revised Statutes of Canada, 1886, Schedule A, p. 2274.

in bill.

In the Canadian bill as introduced in 1889, section 19 was Changes identical with the Imperial Act. There was a strong expression of opinion against the principle of the Act 1 & 2 Geo. IV. c. 78, especially against requiring the words "only and not otherwise or elsewhere,". and when the bill was introduced in 1890 the second sentence of clause (c) of the Imperial Act was omitted entirely. While the bill was before the Senate it was further amended and put in its present form by omitting the whole of the original clause (c), and adding to clause (a) the words: "but an acceptance to pay at a particular specified place is not conditional or qualified." To appreciate the full effect of this change the present section must be read in connection with sections 83 to 90 inclusive.

changes

The effect of the Canadian Act would appear to be this: Effect of When the drawer has not named a particular place of payment, the acceptor may name a place in his acceptance, and this will be a general acceptance which must be taken by the holder, and of which he need not give notice to the drawer or indorsers in order to hold them liable on the bill.

Where a place of payment is specified either in the bill as originally drawn or in the acceptance the bill must be presented there or the drawer and indorsers will be discharged: sec. 87. The acceptor is not discharged by the