Also known as: acceptors
Written by attorneys — see sources below.
A person who signs a negotiable instrument to indicate agreement to pay it according to its terms.
Andrew Avery accepts a promissory note by signing his name on its face as the party obligated to pay. When the note is later transferred, that signature does not qualify as an indorsement because it was made in the capacity of acceptor rather than to negotiate the instrument or incur secondary liability.
Atlas Ventures accepts a demand note issued by Apollo Energy. A subsequent holder sues Atlas for payment on the same day the note is delivered. The court treats the obligation as mature from the moment of acceptance, allowing suit without any prior demand.
Anthony Arnold accepts bills of exchange drawn in London while in Italy. Under Italian law the acceptances become void when the drawer fails without leaving assets in the acceptor's hands. The acceptor later seeks discharge in an English court after obtaining relief abroad.
Audrey Ashton accepts a bill of exchange in payment for land that the drawer did not own. A holder in due course who took the instrument for value before maturity sues Ashton. The court enforces the acceptance against Ashton despite the underlying fraud between the original parties.
Swift, a citizen of Maine, instituted an action in the circuit court of New York against Tyson on a bill of exchange that Tyson had accepted in New York. The acceptance and indorsement of the bill were admitted at trial. Swift had taken the bill before it became due in payment of a promissory note due to him from Norton & Keith. He was a bona fide holder without notice who believed the bill was justly due. Tyson had accepted the bill as part consideration for lands sold by Norton & Keith, to which those parties had no title and which were of little or no value. The defendant offered to prove that the acceptance had been given under circumstances involving misrepresentation of the quality of the lands and imposition by fraud on the part of the drawer and co-owners. The circuit judges divided on the question of whether, under these facts, the defendant had available to him the same defense against Swift as he would have had against the original parties to the bill. This division resulted in certification of the question to the Supreme Court for resolution.
View caseNo. The UCC definition of indorsement expressly excludes a signature made in the capacity of acceptor. That signature instead creates primary liability on the instrument itself.
Supporting sources
It is due from the moment of delivery and acceptance. Suit may be brought immediately without any separate demand, subject only to the statute of limitations.
The local law of the state designated in the instrument as the place of payment controls the acceptor's obligations, except as provided in related Restatement sections on conflict of laws.
Supporting sources
An action must be commenced within three years after demand for payment is made to the acceptor.
Supporting sources
…that the bill had been received in payment of a pre-existing debt; that the acceptance had been given for lands which the acceptor had purchased from the drawer of the bill, to which lands the drawer had no title; that the quality of the lands had been misrepresented; and that the purchaser was imposed upon by the…