Home >> Dictionary Of Banking >> Paying Banker to Transfer Of Shares >> Retiring a Bill

Retiring a Bill

london, banker, acceptor and customer

RETIRING A BILL. Many customers of country branches accept bills payable at the head office in London of their banker, or, in the case of a purely country bank, at the latter's London agents. Shortly before maturity of the bill, the acceptor gives his banker a written order to pay or retire the bill falling due in London. Immediately before the due date the banker debits the customer and credits London with the amount, advising his London agents or London office to pay the bill. In some cases, at the beginning of each month, the acceptor gives one order, on which are specified all such bills falling due during the month. If any of !the bills have docu ments attached, the order should supply an accurate description of them.

An order to retire a customer's own acceptance, payable either at the branch where his account is kept, or at the head office, or at a London bank, does not require a penny stamp. Neither is a stamp re quired where a customer gives an order to retire the acceptance of another person.

NN'hen an acceptance is withdrawn on the order of a person who is not the acceptor, the bill should not be cancelled.

It is very undesirable that a bill should he domiciled at a bank where the acceptor does not keep an account, and the banker is under no obligation to accept funds to meet it. He is justified in returning any such bill sent for collection. This, of course, does not

refer to bills accepted by a country customer and domiciled with a London banker, as in this case the London banker is the agent of the country banker where the customer keeps his account.

A hill may be retired at maturity by the drawer or an indorser, whereupon that person holds the instrument with remedy against all prior parties. In such a case a written order should be given by the person retiring the bill.

The customer for whom a bill is discounted sometimes requests the banker, before the bill is due, to withdraw it, giving as a reason that the acceptor has sent him a cheque for the amount or that part payment has been made and a new bill accepted for the balance.

The circumstances connected with the retirement or withdrawal of a bill, by persons other than the acceptor, should always be carefully considered, as history shows how the operation may lend itself very readily to the purposes of fraudulent persons.

Sir James Bacon in a case in 1872 said " retiring a bill of exchange means, as understand it, so to deal with it as that the man who is personally liable shall not be sued upon it, which he might be unless it is retired before the time at which it could be noted."