the acceptor and drawer are prima facie principal debtors as to the indorsers.13 Though the acceptor be a mere accommodation acceptor to the knowledge of the holder he is none the less bound.14 The holder, it has been said, may strike out the drawer's name after acceptance.15 Yet as between the acceptor and the drawer the acceptor may show himself to be a surety, just as he or the drawer may show the same fact as to an indorser as against that indorser.16 Non-negotiable orders accepted absolutely ought to be binding upon the acceptor though he have no funds of the drawer." A payee upon such an order, or an indorsee to whom the acceptance was given, may at common law maintain an action upon the acceptance in his own name,18 but it is said an indorsee after acceptance of a non-negotiable order cannot.19 But this rule would have no application where an assignee or the real party in interest can sue. § 227. Admissions by acceptance.- The acceptance of the drawee is, nothing further appearing, an admission that the drawee has funds of the drawer to the amount of the bill. As to the holder this presumption from the admission 13 Diversey v. Moor, 22 Ill. 331. 14 In re Babcock, 3 Story, 393; Wilson v. Isbell, 45 Ala. 142; Anderson v. Anderson, 4 Dana, 352; Cronise v. Kellogg, 20 Ill. 11; Nowak v. Excelsior Stone Co., 78 Ill. 307. 15 Ashton v. Reeves, 3 Phila. 339. This does not affect the rights of the acceptor as against the drawer, but the drawer is never responsible to the acceptor in the capacity of acceptor. The case of Canadian Bank v. Coumbe, 47 Mich. 358, without any apparent reflection holds that if the holder knows the drawer to be a surety he must act accordingly, but the cases in the preceding note expressly rule the contrary. See also Bradford v. Hubbard, 8 Pick. 155. 16 Canadian Bank v. Coumbe, 47 Mich. 358; Child v. Eureka Powder Works, 44 N. H. 354. 17 Greene v. Duncan, 37 S. C. 239; but see Richardson v. Carpenter, 46 N. Y. 660, and Kemble v. Lull, 3 McLean, 272, which says the acceptance of an order conditional upon the presence of funds is an admission of funds. 18 Bacon v. Bates, 53 Vt. 30; Grant v. Wood, 12 Gray, 220. 19 Gerard v. La Coste, 1 Dall. 194. 1 Gillilan v. Myers, 31 Ill. 525; Raborg v. Peyton, 2 Wheat. 385. The same is true of an order. See note 17 to last section. is absolute. And as between the acceptor and drawer and indorsers, the natural presumption from the drawing of a bill of exchange or order for money is that the drawee is indebted to the drawer,3 and if the bill or order is accepted the presumption is that the drawee or acceptor has funds of the drawer, and if the bill or order is paid the inference is that it was paid by the drawee or acceptor out of his indebtedness to the drawer. But as between the drawer and acceptor and indorsers the fact may be shown to rebut the presumption, and thus it may be made to appear that the acceptor was in fact an accommodation acceptor as to the drawer or as to an indorser, or that the drawer was an accommodation drawer for an indorser, or that one indorser was an accommodation indorser as to another indorser. The acceptance of a bill or order admits the genuineness of the signature of the drawer, but it does not admit the genuineness of any other signature upon the bill or of the contents of the instrument. The rule as to the acceptance or payment of checks is the same.10 If the bill be payable to the drawer's own order the rule is the same." Hence if the acceptor pays to an innocent indorsee the bill upon a forged indorsement he will be liable to the true owner of the bill, and he may compel the person to whom he paid to 2 See note 1 to last section. 3 Bradley v. McClellan, 3 Yerg. 301; Adams v. Darby, 28 Mo. 162; Alvord v. Baker, 9 Wend. 323. 4 Byrd v. Bertrand, 7 Ark. 321; Parks v. Nichols, 20 Bradw. 143; Byrne v. Schwing, 6 B. Mon. 199; First Nat. Bank v. Moss, 41 La. Ann. 227. 5 Healy v. Gilman, 1 Bosw. 235; and see the cases in the last note. Alvord v. Baker, 9 Wend. 323. Trego v. Lowry, 8 Neb. 238; Thurman v. Van Brunt, 19 Barb. 409. 8 See note 16 to last section. 9 White V. Continental Nat. Bank, 64 N. Y. 316; First Nat. Bank v. Ricker, 71 Ill. 439; and see § 154, ante, as to forgeries in checks. But a bank is bound to know whether its own bills have been fraudulently raised. United States Bank v. Bank of Georgia, 10 Wheat. 333. In this case Story, J., does not seem to understand that there is a difference between alteration of the amount and forgery of the bank's signature. 10 See § 154, ante. 11 Williams v. Drexel, 14 Md. 566. 12 Dick v. Leverich, 11 La. 573; Jackson v. Commercial Bank, 2 Rob. (La.) 128. repay the amount to him; but otherwise, if he pay to the lawful holder of the bill, he cannot compel repayment unless the holder was a party to some fraud or was guilty of negligence amounting to fraud.13 The same rule applies to the acceptor supra protest." But it is conceivable that the acceptor of the bill may mislead a person by his acceptance. Suppose a bill were presented to the drawee, and the drawee had within his knowledge an easy means of ascertaining the forgery of an indorser's name or an alteration in the amount of the bill, and should still negligently accept the bill, and upon the strength of the acceptance some third party, a bank, for example, should without negligence take the bill for value, would the acceptor be liable to such party, or if he paid such party would he be estopped from claiming the money back? A court of high authority has held that if the acceptor is a bank it would be held for its negligence, and there is no reason why the rule should not be applied to any other acceptor.15 § 228. Liabilities and rights of acceptor.- Since, as we have seen, the acceptor becomes the principal debtor, the presumption is that the acceptor had funds of the drawer,' and if the accepted bill be protested for non-payment the drawer may recover from the acceptor without showing payment of the bill, or without showing title under the payee; yet other courts hold that the drawer must show, in order to recover from the acceptor, that he was compelled to pay the bill on account of the acceptor's default.' If the 3 13 Bank of Commerce v. Union Bank, 3 N. Y. 230; Ellis v. Ohio Life Ins. Co., 1 Handy, 119. 3 Cooper v. Jones, 79 Ga. 379; Kingman v. Hotaling, 25 Wend. 423; Zebley v Voisin, 7 Pa. 527; 14 Goddard v. Merchants' Bank, 4 Coursin v. Leadlie, 31 Pa. 506 (non N. Y. 147. 15 See § 154, ante. 1 See note 1 to last section. 2 Kingman v. Hotaling, 25 Wend. 423. Contra, Quinn v. Hanley, 5 Bradw. 51; Pilkington v. Woods, 10 Ind. 432, semble. negotiable order). But of course if it appear that it was an accommodation acceptance the drawer must show that he put the drawee in funds. Parker v. Lewis, 39 Tex. 394. 4 See last two cases in note 2, supra. 9 acceptor, however, was an accommodation acceptor, in order to recover from him the drawer must show that he put the acceptor in funds. And an accommodation acceptor is entitled in equity to be subrogated to the position of the holder of the bill. As we have said, the fact that the acceptor is an accommodation acceptor does not vary his responsibility to the holder,' whether the holder knew he was an accommodation acceptor or not, and whether the holder took by indorsement before or after acceptance.10 The fraudulent diversion of the bill itself is no defense in favor of the acceptor as against a bona fide holder whether he took the bill before or after acceptance;" nor is a diversion of the proceeds of goods against which the draft was drawn; 12 but it would be a defense in favor of the accommodation drawer as against the acceptor who had diverted the proceeds of the shipment which he had agreed to apply upon the bill. The acceptor, by his acceptance, obtains a lien upon the funds of 5 Parker v. Lewis, 39 Tex. 394. 6 Toronto Bank v. Hunter, 4 Bosw. 646. 7See notes 14 and 15, § 226. An acceptance is good after maturity (Stockwell v. Bramble, 3 Ind. 428), and it is good after protest. 8 See notes 14 and 15, § 226, and First Nat. Bank v. Schuyler, 39 N. Y. Super. Ct. 440. The holder is under no obligation to realize on the drawer's securities. Fowler v. Gate City Nat. Bank, 88 Ga. 29. Contra, Bradford v. Hubbard, 8 Pick. 155. 9 Credit Co. v. Howe Machine Co., 54 Conn. 357; Arpin v. Owens, 140 Mass. 144; Huertematte v. Morris, 101 N. Y. 63. 10 An indorsee after acceptance takes the acceptance as the promissory note of the acceptor Mechanics' Bank v. Livingston, 33 Barb. 458. 11 Fort Dearborn Nat. Bank v. Carter, Rice & Co., 152 Mass. 34; 14 the drawer in his hands. He can charge a commission for accepting only by agreement or by a customary mode of dealing. The liability of the acceptor is for the face of the bill and interest,16 and, if protested, for the notarial fees; "7 but he is not liable for damages unless made so liable by statute. The promise to accept a bill to be drawn would cover as damages for a breach the whole cost and expenses, including re-exchange and interest.18 An order payable in stocks accepted makes the acceptor liable, not for the amount of money named, but for the value of the stocks at the date they should have been delivered. The acceptor supra protest recovers from the drawer or the party for whom he accepts protest fees as part of the bill. § 229. Conditional and variant acceptances.- A conditional acceptance is an absolute acceptance of a conditional order or a conditional acceptance of an absolute order. Of the first sort are acceptances of orders payable out of a particular fund or if certain funds should be realized. Such acceptances are impossible to arise upon bills of exchange, because such documents are not bills of exchange. A conditional written acceptance of a bill of exchange must be one that is made so upon its face, because an absolute written acceptance cannot be shown to be conditional. But conditional written acceptances may be acceptances of a bill 14 Lambert v. Jones, 2 Pat. & H. 144. Lien by agreement, see Coats v. Donnell, 94 N. Y. 168; and for the lien of holders upon securities to secure acceptances, see Kramer's Appeal, 37 Pa. 71. 15 Pratalongo v. Larco, 47 Cal. 378; Gibson v. Bailey, 24 Miss. 237. See Millaudon v. Arnaud, 4 La. 542. 16 Henrick v. Farmers' Bank, 8 Port. 539; Gibson v. Bailey, 24 Miss. 237; Van Arsdale v. Boardman, 3 How. Pr. 60. 17 Bowen v. Stoddard, 10 Met. 375; Manning v. Kohn, 56 Ala. 235. 18 Russell v. Wiggin, 2 Story, 213. 19 City Bank v. Gerard Bank, 10 La. 562. 1 See Seymour v. Lumber Co., 58 Fed. R. 957, 16 U. S. App. 245. 2 See § 242, post, and §§ 207 and 208, ante. 3 Haines v. Nance, 52 Ill. App. 406; Cowan v. Hallock, 9 Colo. 572; Heavener v. Donnel, 7 Smedes & M. 244. A conditional acceptance must be clearly expressed. Coffman v. Campbell, 87 Ill. 98. |