B I L 



399 



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fill up the void in another : and would thus be enabled, in 

 general, to furnish the required accommodation on payment 

 of a proportionate premium. 



In the meantime, the instrument of transfer, which in 

 this country had received the name of a bill of exchange, 

 assumed a concise and permanent form, and became clothed 

 with such properties and incidents as experience showed to 

 be necessary or convenient. At first, no doubt, the order 

 was to pay on presentment to the drawee, or as it was ex- 

 pressed in the instrument, ' on sight.' But, as the intervals 

 between drawing and presentment would necessarily be 

 extremely variable, it was found expedient, or it insensibly 

 became the practice, to fix them by a definite scale ; and 

 hence probably arose what was called the usance between 

 two ports or countries, being, as the name would seem to 

 import, the period fixed by usage, at which, with reference 

 to the date, a bill was presentable for payment. Afterwards 

 these usances came to signify the periods at which the mer- 

 chants of any particular country or port were in the practice 

 of paying the bills so drawn upon them, and these customary 

 periods being of course universally known among com- 

 mercial men, the word usance soon came to signify a specific 

 term of days, and it was formerly therefore not uncommon, 

 when by agreement the time of payment was determined, 

 to draw foreign bills payable at one, two, or more usances. 

 In modern times, the more frequent practice has been to 

 make them payable at so many days after sight, or at so 

 many months or days after date. Again, in times when 

 money was less at command than at present, it was but rea- 

 sonable, that even after the maturity of the bill a short 

 space should be allowed to the drawee for providing the 

 requisite cash ; and hence it became usual to grant what 

 we term days of grace, which, though varying as to limits 

 in different communities, are in almost all recognised as 

 part of the law and rustom of merchants. 



Originally, as we have supposed, the bill was a letter ad- 

 dressed by B. to C., directing him to pay A. But an ob- 

 vious improvement would early suggest itself, viz. that as 

 it might not be convenient to A. to present the letter in 

 person, he should have authority given him to appoint an- 

 other, by whom the presentment might be made and the 

 money received in his stead. It assumed therefore the 

 form of a direction to pay A., or such person as A. should 

 nominate and appoint, expressed with the quaint concise- 

 ness of mercantile phraseology, thus : ' Pay A., or order.' 

 But if the letter or bill in the hands of A. were assignable, 

 there was no reason why it should not be equally so in the 

 hands of his assignee, and thus by the operation of the 

 words 'or order,' it obtained the character of a negotiable 

 instrument or sign of value, transferable from hand to hand 

 by a simple act of delegation apparent upon some part of it. 

 The form of assignment, it may be readily conceived, would 

 at first run in some such language as this : ' Pay the within 

 to D., or his order signed A.,' and by a similar superscrip- 

 tion D. might in like manner assign his right to E., and E. 

 to F., and so on. But as the bill was of course delivered to 

 each successive assignee, possession was of itself a sufficient 

 voucher for payment, and the special superscription there- 

 fore was soon frequently dispensed with as unnecessary, 

 the assignment of the prior holder being indicated by his 

 signature alone. In England, and in some other countries, 

 it has long been the practice to write the assignment on the 

 back of the instrument, and it has thence received the name 

 of an indorsement, the form first described, in which the 

 assignee is named, being termed a special indorsement, or 

 an indorsement in full, and the mere signature of the 

 assignor, an indorsement in blank. 



When bills were drawn payable, not as at first on sight, 

 but at some future day, it was natural that the first holder 

 who had the opportunity of doing so should, during the 

 currency of the specified period, shew the bill to the drawee, 

 and procure from him an undertaking to pay it at maturity. 

 If he refused, the bill was protested for non-acceptance and 

 ii'itire of the dishonour was immediately communicated to the 

 dpi-.ver. If he gave the undertaking either verbally or in 

 writing upon the bill or otherwise, he was said to have ac- 

 cepted it, and became thenceforth liable, as the acceptor, for 

 the amount specified. For the effect of the acceptance was 

 this: the drawee thereby afiirmed the right of the drawer 

 to call upon him for payment of the money, and he assented 

 ni'ircover to the transfer of the right, or, to borrow a legal 

 uh rase, he attorned to the holder of the order. If, there- 

 fore, after acceptance, he refused to pay the bill when due, 



he was responsible to the drawer as having acknowledged 

 himself to be his debtor, and to the payee or other party in 

 possession in respect of his express engagement. But the 

 right of the holder was not confined to the acceptor; for 

 although, after acceptance, the drawee became the principal 

 debtor, to whom therefore recourse must be had iu the first 

 instance, yet if upon regular presentment he made default 

 in payment, the holder was not bound to take measures 

 against him alone, but might resort to all prior parties whose 

 names appeared upon the instrument. For as the indorse- 

 ment conferred the right to receive the money, it was to 

 be presumed that it had not been made without an equi- 

 valent, and it was but justice therefore that on the dis- 

 honour of the bill by the drawee, the holder should receive 

 back the value which he had given ; and as every person, 

 whose signature, whether as drawer or indorser, appeared 

 upon the bill, acknowledged himself by the act of signing, 

 to have received value for the delivery of the order, it was 

 not unreasonable that the reimbursement should be claimed, 

 not merely from the party from whose hands the bill had 

 been received, but also from the drawer and every subse- 

 quent party whose name preceded that of the holder. The 

 result therefore was this : if the drawee paid according to 

 the tenor of the bill, the arrangement was complete, and all 

 parties were satisfied ; but if he dishonoured it, by a refusal 

 either to pay or to accept on due presentment, a notification 

 of the dishonour was conveyed by the holder to all parties 

 preceding him, or to such as he thought fit to call upon for 

 indemnity ; if then the drawer paid the .money, or as it was 

 termed took up the bill, all the other parties were exo- 

 nerated, and the drawer had his remedy against the drawee, 

 upon the bill if accepted, or upon the original consideration 

 in respect of which it was drawn, if the acceptance had 

 been refused. In like manner, whoever satisfied the bill by 

 payment, thereby discharged all parties posterior to himself, 

 and obtained a right against all who preceded him. Thus 

 each successive indorsee had the accumulated security of all 

 the parties whose signatures were upon the instrument as 

 acceptor, drawer, or indorser, when it came into his hands. 



The party remitting a bill is by the supposition debtor to 

 him to whom the remittance is made ; and after the expla- 

 nation just given, it will be obvious that it would be re- 

 quired of him to acknowledge and fix his liability by 

 making himself a party to the instrument. The bill there- 

 fore purchased by him would not be, as has been above 

 supposed, and as at first was probably the case, a direction 

 to pay the remittee, but to pay the remitter or his order ; 

 and hence it happens, as was said in the commencement, 

 that the party to whom the bill is made payable, is in mer- 

 cantile language sometimes called the remitter. 



Bills remitted to or from places abroad are of course 

 iable to be lost in their passage ; and to obviate the incon- 

 venience thence resulting, it became usual to draw them in 

 sets ; that is to say, two or more parts of each bill were 

 drawn, and described as the 1st, 2nd, 3rd, and so on, each 

 containing a condition that it should be payable only while 

 ,he others remained unpaid. But this practice of drawing 

 n sets is made available for another purpose. The payee 

 laving indorsed and paid away one part, frequently remits 

 mother part to some agent or correspondent at the place of 

 the drawee's residence, to be by him presented for accept- 

 ance, with a direction added, by way of memorandum, to 

 the bill, that, when accepted, it is to be held for the use of 

 the person who shall duly present the other part or parts for 

 jayment at maturity. The advantage of this arrangement 

 s obvious: if the bill be accepted, it is held, according to 

 :he direction, till maturity : if refused, it is protested, and 

 lotice is given to the drawer. Upon this protest the drawer 

 may be called upon to give security for the due payment of 

 ;he bill at the expiration of its currency ; or, as occasionally 

 lappens, some correspondent of the drawer at the place 

 upon which the bill is drawn accepts it for his honour, and 

 thereby places himself in the situation of the original drawee, 

 being liable as acceptor to all parties subsequent to tho 

 drawer. Such an acceptance is called an acceptance supra 

 orotest, or for honour, and may be made at any time during 

 .he currency of the bill, and on behalf of any party who is 

 i;ible upon it after default made by the drawee. In short, 

 without entering into further details, by successive modifica- 

 tions and improvements the letter of request has become at 

 ength a very useful and convenient instrument of exchange, 

 the operation of which as a vehicle of remittance at the pre- 

 sent day will be apparent from the following illustration. 



