It is obvious that the obligations incurred by all parties to a negotiable instrument except that of the party primarily liable, are obligations to answer for the debt of another. The matter may be looked at according to the tenor of the instrument, or according to the actual relations between the parties. If looked at in the former way, all parties secondarily liable according to the tenor of the instrument are agreeing to answer for the debt of another. If looked at according to the actual relations of the parties inquiry would be necessary whether any of the parties had signed for accommodation. It is, however, the law that "neither a bill of exchange on its face, nor the indorsements are within the statute of frauds."54 And the same is true of negotiable obligations on promissory notes.54a The exception is made by force of mercantile custom. No difficulty in defining the extent of the exception is likely to arise except where acceptances are involved; for it is well settled that every other obligation must be on the instrument itself. But in the United States many jurisdictions have allowed validity to oral acceptances under certain circumstances;55 and the Uniform Negotiable Instruments Law though requiring acceptances to be in writing, does not require them to be on the bill.56 How far a written acceptance not on the bill itself might fall within the Statute of Frauds is not clear. It would seem that since the Negotiable Instruments Law provides that it is an acceptance, it must be dealt with as if written on the bill itself. So considered, it would not be within the statute, whether it was made for accommodation or not.
51aHayes v. Burkam, 61 Ind. 130. See also infra, Sec. 524a.
51b Smith v. Easton, 54 Md. 138, 39 Am. Rep. 356; Wills v. Shinn, 42 N. J. L. 138; Carville v. Crane, 5 Hill, 483; Branson v. Stroud, 2 McMull. 372; Taylor v. Drake, 4 Strob. 431, 63 Am. Dec. 680.
51c Dee v. Downs, 57 Iowa, 589, 11 N. W. 2; Wilson v. Roberta, 5 Boew. 100.
52 Chapline v. Atkinson, 45 Ark. 67, 65 Am. Rep. 531; Williams v. Caldwell, 4 S. Car. 100.
53 Mallet v. Bateman, L. R. 1 C. P. 163; Dougherty v. Bash, 167 Pa. 429, 31 Atl 729.
In regard to oral acceptances generally, however, the distinction seems to be taken that if the acceptor has funds of the drawer, the promise is not within the statute; 57 but otherwise if the acceptance is for accommodation,58 unless the payee (or a subsequent holder in due course) received the acceptance in ignorance that the acceptor had no funds of the drawer. Against such a holder the statute cannot properly be invoked.59 It may be urged that in either case the acceptor has promised to pay the drawer's debt. It is of the essence of an acceptance that the acceptor's promise shall be absolute. If it is a promise to pay only out of a particular fund, or is limited by the continued existence of the fund, there is no valid acceptance.60
54 Parsons, C. J., in Barker v. Prentiss, 6 Mass. 430. See also Edward Hines Lumber Co. v. Anderson, 141 111. App. 527; Spaulding v. Andrews, 48 Pa. 411; In re Goddard's Estate, 66 Vt. 415, 29 Atl. 634. Cp. Schafer v. Farmers', etc., Bank, 59 Pa. 144, 98 Am. Dec. 323.
54aLehman v. Levy, 69 Ala. 48; Nichols Co. v. Dedrick, 61 Minn. 513, 63 N. W. 1110; Freeh v. Yauger, 47 N. J. L. 157, 54 Am. Rep. 123; Paul «. Stackhouse, 38 Pa. 302; and see supra, Sec.221.
55 See infra, Sec.1195.
56Neg. Inst. Law, Sec 132, infra,