The liability of an acceptor is defined by Section 54 : " The acceptor of a bill, by accepting " (I) Engages that he will pay it according to the tenor of his acceptance : " (2) h precluded from denying to a holder in due course : " (a) The existence of the drawer, the genuineness of his signa ture, and his capacity and authority to draw the bill ; " (b) In the case of a bill payable to drawer's order, the then capacity of the drawer to indorse, but not the genuine ness or validity of his in dorsement ; " (c) In the case of a bill payable to the order of a third person, the existence of the payee and his then capacity to indorse, but not the genuine ness or validity of his indorse ment." As an acceptor is responsible for the genuineness of the drawer's signature, a drawee consequently incurs an unnecessary liability if he accepts a bill before it has been signed by the drawer. If a bill is drawn per procuration or on behalf of the drawer, the drawee ought to satisfy himself before accepting the bill, that the drawer has authorised the bill to be drawn in that way. He is not liable for signatures, such as the payee's or an indorser's, which do not, in the ordinary course of things, appear upon a bill until after it has been accepted.
No person is liable as acceptor of a bill who has not signed it as such : Provided that (1) where a person signs a bill in a trade or assumed name, he is liable thereon as if he had signed it in his own name ; (2) the signature of the name of a firm is equivalent to the signature by the person so signing of the names of all persons liable as partners in that firm (Section 23). In the case of a non-trading partnership, an acceptance by a partner binds himself alone and not the firm.
If there are several acceptors on a bill they are jointly liable, not jointly and severally.
Where a bill is accepted payable at the acceptor's bankers, that is a sufficient authority for the banker to debit it to his customer's account ; but, in practice, country bankers often require particulars of accept ances falling due to be given, and a written order from the customer to pay them, though London bankers pay without any advice. Such an order does not require to be stamped.
The death or bankruptcy of an acceptor revokes a banker's authority to pay an acceptance.
If a banker is a holder for value, he may debit an acceptance to the acceptor's account, even if the acceptor has sent in structions not to pay the bill.
Where a bill is accepted, say, by John Brown payable at the British Bank, Leeds, although no drawee's name is mentioned in , the bill, it may be debited to his account.
A bill may also be charged to the acceptor's account which is accepted simply John Brown, if there is an indication elsewhere on the bill that it is payable at the British Bank, Leeds.
Many country customers accept their bills payable either at the London office of their banker or at their banker's London agents. (See RETIRING A BILL.) Two or three days before a bill falls due, the acceptor requests his banker in writing (by filling up the banker's printed form, and giving particulars of the bill and any documents that are attached) to instruct the London office to pay his acceptance. The order should be signed in the same way as cheques are drawn, or as may be arranged. A banker is not obliged to pay a bill accepted payable with him or to retire an acceptance payable in London, except by instructions or by custom, In Bank of England v. l'agliano Brothers (1891, A.C. 107), it was held that " if a banker undertakes the duty of paying his customer's acceptances, the arrangement is the result of some special agreement, expressed or implied." When a banker receives an order to retire a bill, he has to consider whether or not the account of his customer will admit of the payment of the bill. If unable to accede to his customer's request he informs his customer accordingly, but if all is well he charges the amount of the bill to his customer's account and credits it to his London agents (or London office), requesting them to pay the bill when pre sented.
Where instructions are received to cancel an order which has been given to retire an acceptance in London, it is necessary to make quite certain that the advice has not already been acted upon by the London agents and that they have cancelled the advice, before re-crediting the amount to the customer's account.
An order signed by a customer to retire an acceptance (whether his own or another person's) dots not require a penny stamp to be affixed.
A bill often contains an indication as to where it shall be payable, e.g., " payable in London," but if there is no such indication, the drawee accepts it payable in the place where he lives, unless he follows the recog nised custom and makes it payable in London.
If a bill is accepted payable at, say, the British Bank, Ltd., and no town is men tioned. it should be presented at time British Bank in the town where the drawee is described as living.
In Scotland, acceptors usually sign their names under the drawer's signature, but when they accept the bill payable at their bankers, the acceptance is generally across the bill. (See BILL OF EXCHANGE.)