Story Case

Suit was brought by Carter Allen, the holder, against Bruce Hampton, the drawer, upon the following bill of exchange:

"$260. Valleytown, Ky., March 12,1904. Pay to the order of Matthew Jefferson, sixty days after he shall have first made request therefor, the sum of two hundred and sixty dollars, for which said amount I hereby assume responsibility.

(Signed) Bruce Hampton.

To Branch & Cottesworth, 385 Water Street, Center City, Ky. (Indorsed on back) Matthew Jefferson."

The bill was not presented to Branch and Cottesworth until May 11, 1904, sixty days after its issue, when Allen demanded payment of it. His suit against Hampton was started very soon after, without further demand of the drawee. Hampton insisted that this was a bill payable at a fixed time after sight, not at a fixed time after issue, and that since acceptance had never been demanded or refused, the bill had never reached a maturity and had never been dishonored. The contention of Allen consists in the fact that commercial paper must run for a definite time and can not be affected by such unusual and irregular qualifications as that the payee must first ask for his money and then wait sixty days before he can insist on payment.

Ruling Court Case. Philpatt Vs. Bryant, Volume 3 Carrington And Payne, English Reports, Page 244

It seems, in this case, that Bryant, the defendant herein, drew a bill of exchange upon his father for a certain amount, payable in six months at No. 18 Bishopsgate Street. Philpatt was the holder of the note. He did not present it for acceptance; when he finally presented it for payment, the drawee, Bryant's father, was dead. He thereupon sued Bryant, the drawer. Bryant contended that he was not liable, because Philpatt had failed to have the bill accepted during the life of the drawee.

Decision: Presentment for acceptance is not necessary in bills of exchange, except those which are payable after sight. It is necessary in those bills in order to fix the time of payment.

Mr. Justice Park said in his opinion: "I am clearly of the opinion that what has been done is sufficient. I should destroy half the trade of London if I were to hold that bills made payable so many days after date must be presented for acceptance as well as payment. If they are payable after sight, it will be otherwise.,, Judgment was given for Philpatt.

Ruling Law. Story Case Answer

When a bill of exchange is drawn upon a person who is known to the drawee, the holder of the instrument may, if he wishes, present the bill for acceptance. But, as a general rule, presentment for acceptance is not necessary; the presentment for payment is deemed sufficient. But if the bill is payable so many days after sight, then it becomes necessary to present the instrument for acceptance, since there is no other way of fixing the time of payment.

Although the bill in the Story Case does not follow a common form, it in effect does only what was very common in the practice of merchants. It directs the drawee to pay at a definite time after demand, and is therefore never mature until a presentment for acceptance, followed by the period stated. It is dishonored, like all bills, if acceptance is refused, and the drawer may at once be sued. But refusing to accept is not the same as refusing to pay, and if suit is brought on one theory, recovery can not be given on another. Allen does not sue on the ground of dishonor at presentment for acceptance. Since this bill never reaches maturity until sixty days after presentment or sight, a refusal to pay it before that time is not a dishonor. Hampton is liable, only after a dishonor by the drawee upon due presentment, and since there has been neither presentment for acceptance, nor presentment at maturity for payment, Allen cannot recover. Judgment should be given for Hampton, the defendant.