An acceptor for honour

An Acceptor for Honour is a person who voluntarily accepts a bill of exchange that has already been dishonoured by non-acceptance, in order to protect the honour and credit of a party liable on the bill (usually the drawer or an endorser).

Under the Negotiable Instruments Act, 1881, a person who is not originally liable on the bill may accept it for the honour of any party after the bill has been protested for non-acceptance.

Conditions for Acceptance for Honour

1. The bill must have been dishonoured by non-acceptance.
2. The bill must have been protested for non-acceptance.
3. The acceptor for honour must be a person not already liable on the bill.
4. The acceptance must be made with the consent of the holder.
5. The acceptor must specify for whose honour he accepts the bill.

Liability of the Acceptor for Honour

• He becomes liable to pay the bill if the original drawee does not pay at maturity.
• His liability extends to the holder and to all parties subsequent to the party for whose honour he accepted.

Example

Suppose A draws a bill on B payable to C.

• B refuses to accept the bill.
• The bill is protested for non-acceptance.
• D then accepts the bill for the honour of A.

Here, D is called the Acceptor for Honour. If B fails to pay the bill on maturity, D must pay it to protect A’s honour.

Short Exam Answer

Acceptor for Honour is a person who, after a bill of exchange has been dishonoured by non-acceptance and protested, voluntarily accepts it to protect the honour of the drawer or an endorser. He becomes liable to pay the bill if the original drawee fails to do so at maturity.