Most bills are now accepted payable at a bank, but if payable elsewhere and the bill is not paid upon presentation, the "walk-clerk " will leave a notice usually in following form: -
A Bill for £ Drawn by On Lies due at the Lombard Bank,
250, Lombard Street, E.C.
Please call between Twelve and Four o'clock.
After banking hours the bill is, if necessary, sent to the notary for noting or protest, as explained in Section XI.
When a bill is dishonoured by non-acceptance or nonpayment, notice of dishonour must be given to the drawer and each endorser, or else they are released from liability on the bill. If the person to whom notice is to be sent resides in the same town, it must reach him on the day following the dishonour of the bill; if otherwise, notice must be sent not later than the day following the dishonour. A banker usually gives notice of dishonour by the simple return of the bill with the answer written upon it, unless he is unwilling to part with the bill, when a formal notice of dishonour is sent, stating that payment of the bill has been refused, and that the banker looks to the person to whom the notice is addressed for the amount of the bill.
The usual answers given by a banker on a dishonoured bill domiciled with him are "R/A," or "Refer to accepter," "N/A," or "No advice," or "N/O," or "No orders."
If a person who receives back a bill from his banker wishes to keep his right of recourse against a previous endorser or the drawer, he is allowed the same time to serve notice of dishonour as mentioned above.
Sometimes bills drawn from abroad upon an English drawee are marked with the phrase, "In case of need with Messrs. Jones and Co." If the bill is dishonoured the presenting banker will apply to Jones and Co., the "case of need," by whom payment will usually be made, and thus the expenses of re-exchange be saved.
When an alteration is made in a material part of a bill of exchange, in particular, in the date, amount payable, or the time or place of payment, the alteration should be confirmed by the signature or initials of both drawer and accepter. But the accepter of a bill owes no duty to the other parties to the bill to see that it is not drawn in such a manner as to facilitate fraudulent alteration. Such precautions should of course be taken in the interests of all honest parties to the bill. It is advisable, for instance, that no blank spaces shall be left which afford an opportunity for altering the amount payable, nor should a bill be drawn on paper stamped for a considerably higher amount than the sum payable, but there is no legal obligation upon the accepter to see that these precautions are taken.
In the case of Scholfield v. the Earl of Londesborough, a man named Sanders drew a bill for £500 upon the defendant upon paper stamped £2, sufficient to cover an amount of £4,000. The bill ran as follows: "Pay to me or to my order the sum of"; then a blank space. The next line commenced "five hundred pounds," etc. Sanders obtained Lord Londesborough's acceptance in the usual course, and then inserted the words "three thousand" in the blank space, and placed a figure 3 before the amount as expressed in figures. He then negotiated the bill, which came into the hands of the plaintiff. It was not paid on presentation, and Scholfield brought an action for the full amount of £3,500 on the ground that the accepter was estopped from pleading the forgery by his negligence in accepting the bill in the form it was drawn. The Court of Appeal decided against the plaintiff, and the Master of the Rolls expressed the opinion that the accepter owed no duty towards the drawer or endorser of a bill of exchange, except that of paying it upon maturity.
Many bills which are payable in a country other than that in which they are drawn are what are called "documentary bills," that is to say, each has attached to it a bill of lading, insurance policy, invoice, and, may be, a letter of hypothecation, that is, a letter giving a charge over the goods represented by the bill of lading. The latter document is a certificate given by the master of a ship acknowledging the receipt of certain cases, boxes, or bales, etc., of goods, and contracting to deliver them at a certain port to the person named in the bill of lading, which is assignable by endorsement and delivery like a bill of exchange. When goods are shipped it is a usual custom to draw a bill upon the consignee or upon a banker who has agreed to accept upon his behalf, and to forward the bill of exchange for acceptance and payment with the bill of lading and other documents attached, to be surrendered upon acceptance or payment of the bill of exchange. Precise instructions should always accompany all documentary bills sent for collection, not only as to the surrender of the documents, but also as to the course to be taken should the bill be dishonoured by non-acceptance or non-payment, i.e., whether the goods are to be warehoused, sold, or re-shipped. For convenience in collecting, bills of lading should be made payable to the order of the shippers and endorsed in blank.
Documentary bills sent to this country for collection are often paid before maturity "under rebate;" that is, the drawee is allowed interest for the unexpired period of the bill at a rate which is usually a half per cent. above the deposit rate allowed by the leading joint-stock banks. When documentary bills are sent into the provinces for collection it is, however, usual to send definite instructions on this point.