PAYMENT OF BILL. A bill of exchange is, in the usual course of events, paid by the acceptor, and when so paid it is discharged and the bill delivered up to him. The Bills of Exchange Act, 1882, provides : " Section 59. (1) A bill is discharged by payment in due course by or on behalf of the drawee or acceptor. " • Payment in due course ' means payment made at or after the maturity of the bill to the holder thereof in good faith and without notice that his title to the bill is defective.
" (2) Subject to the provisions hereinafter contained, when a bill is paid by the drawer or an indorser it is not discharged but " (a) Where a bill payable to, or to the order of, a third party is paid by the drawer, the drawer may enforce payment thereof against the acceptor, but may not re issue the bill.
" (h) Where a bill is paid by an indorser, or where a bill payable to drawer's order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor or ante cedent parties, and he may, if he thinks tit, strike out his own and subsequent indorsements, and again negotiate the bill.
" (3) Where an accommodation bill is paid in due course by the party accommodated the bill is dis charged." The following Section particularly con cerns bankers with respect to " a bill on demand drawn on a banker " : " 60. When a bill payable to order on demand is drawn on a banker, and the banker on whom it is drawn pays the bill in good faith and in the ordinary course of business, it is not incumbent on the banker to show that the indorsement of the payee or any subsequent indorsement was made by or under the authority of the person whose indorsement it purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority." " Section 61. When the acceptor of a bill is or becomes the holder of it at or after its maturity, in his own right, the bill is discharged." " Section 62. (1) When the holder of a bill at or after its maturity abso lutely and unconditionally re nounces his rights against the acceptor the bill is discharged.
" The renunciation must be in writing, unless the bill is delivered up to the acceptor.
" (2) The liabilities of any party to a bill may in like manner be re nounced by the holder before, at, or after its maturity ; but nothing in this Section shall affect the rights of a holder in due course without notice of the renunciation." If an acceptor pays the amount of a bill before it arrives at maturity, he may, should he wish to do so, re-issue the bill, because, being paid before it is due, it is not dis charged. If he does not wish to re-issue the
bill, he should cancel or destroy it, for if, by any means, the bill should come into the hands of a holder in due course, before it matures, that holder will have a right of action against the acceptor and all other parties to the bill.
When a bill payable on demand is paid, it is discharged and cannot be re-issued ; and when a bill payable after date is paid at or after maturity it also is discharged and cannot be re-issued.
No right of action can be maintained on a discharged bill, though the right to sue upon the consideration may still continue.
If an acceptor pays only a part of the amount of a bill at maturity, the part pay ment is a discharge to that extent, and the banker should place a receipt for the amount paid upon the back of the bill and qualify the receipt by adding that the part payment is accepted by him without prejudice to the rights of any of the other parties to the bill. Notice of the part payment should be given to the other parties. The bill itself is not, of course, given up against a part payment.
In the case of part payment of a foreign bill, the bill must be protested for the balance.
A bill should not, as a rule, be given up to an acceptor when, on presenting the bill to him for payment, he offers anything except cash or notes. If a cheque, which can be collected the same day, is offered, the bill should be retained until cash has been received for the cheque, but a cheque which cannot be cashed the same day should not be taken. It is necessary to bear in mind that if a cheque is taken in payment of a bill and the cheque is subsequently returned unpaid, the banker will have lost recourse against the various parties to the bill and will have only the acceptor to look to for the money. London bankers accept cheques upon clearing bankers in payment of bills, the cheques being attached to the bills and passed at once through the Clearing House, If a bill drawn on John Brown, Leeds, payable at sight, contains a note on the bill that it is " payable in London," and John Brown wishes to pay the bill in Leeds when presented to him, he must bear any cost there may be in transmitting the money to London as the holder of the bill is entitled to have the full amount paid in London.