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478. An acceptance is an engagement to pay a bill according to the tenor of the acceptance, which may be either absolute or qualified.
479. An absolute acceptance is an engagement to pay a bill according to its request, which is commonly done by the drawee writing his name at the bottom, or across the body of the bill, with the word accepted.
480. A qualified acceptance is when a bill is accepted conditionally. But the ,holder is not obliged to receive a conditional or partial acceptance. He may act as if an acceptance had been entirely refused.
Note. — When a bill is drawn for the account of a third person, and is accepted as such, and he fails without making provision for its payment, the acceptor must discharge the bill, and can have no recourse against the drawer. When a holdet, at his own risk, takes a conditional or partial acceptance, he must give immediate notice to all other parties to the bill, or he can have no resort to them in default of payment.
All bills payable at sight, or at a day certain, or on demand, should be presented within a reasonable time, or the holder may, from his default, be the loser.
481. The holder of a bill, when acceptance or payment has been refused, should give regular and immediate notice to all the parties to whom he intends to resort for payment; since, if a loss should be incurred, on account of unnecessary delay, by the failure of any of the parties, he would be obliged to bear the loss. Such a notice of non-acceptance or non-payment, when made by a public officer called a notary or notary public, or by any other legal mode, is called a protest.
482. When the parties to a bill, which the drawee has failed to accept or pay, live in different countries, a protest is indispensably necessary, as this instrument is admitted in foreign countries as legal proof of the fact of the refusal, and that the holder intends to recover any damages which he may sustain in consequence.
483. In case of non-payment, when the parties to a bill live in the same country, it is not necessary, although frequently practised, that there should be a regular protest by a public notary. But a notice simply of non-payment is sufficient to entitle the holder to claim interest.
484. The damages incurred by non-acceptance and non-payment of a foreign bill, besides interest commencing from the day of demand, consist usually of the exchange or re-exchange, commission, and postage, together with the expenses of protest and interest. The damages of protested bills in general, however, are regulated in a great measure by the local laws and usages of the different States and countries.
Liabilities Of The Parties.
485s The drawer, acceptor, and each and every indorser of a bill, are liable to the payment of it; and though the holder can have but one satisfaction, yet, till such satisfaction is actually had, he may sue any of them, or all of them, either at the same time or in succession, and obtain judgment against them all, till satisfaction be made.
486. Nothing will discharge an indorser from his engagement, but the absolute payment of the money; not even a judgment recovered against the drawer, or any previous indorser, or any execution against any of them, unless the money be paid in consequence.
Note. — When acceptance is refused, and the bill is returned by protest, an action may be commenced immediately against the drawer, though the regular time of payment be not arrived. His debt, in such a case, is considered as contracted the moment the bill is drawn.
In order, however, to make the indorsers liable, it is proper that the holder should present the bill for payment on the day it becomes due.
Pah Of Exchange.
487. The intrinsic par of exchange is the value the coins of one country have, when compared with those of another, with respect both to weight and fineness.
488. The commercial far of exchange is the value the coins of one country sell for in the markets of another; and is therefore not a fixed, but a variable value.
COURSK OF ExCHANGK.
489. The course of exchange is the variable price of the money of one country, which is paid for a fixed sum of money of another country.
490i The fluctuations of exchange are occasioned by various circumstances, both political and commercial, but in general bills rise or fall in their prices, like any other salable articles, according to the relation existing for the time being between the demand and the supply.
491. The limits within which the fluctuations of exchange range, correspond with the cost of making remittances in cash. Therefore, in the time of peace, exchange seldom remains long unfavorable to any country. When unfavorable, it has a tendency to correct itself, by giving an unusual stimulus to exportation, and by throwing obstacles in the way of importation; and when favorable, it produces the same effect, by restricting exportation and facilitating importation.
492. An Inland Bill of exchange, or draft, is one of which the drawer and drawee are residents of different parts of the same country.
Inland bills are seldom bought or sold at the precise sum specified upon their face, but, according to the course of exchange, are subject to a discount, or command a premium.
493. To compute inland exchange.
Ex. 1. What is the value of the following bill of exchange or draft, at £ per cent, premium? Ans. $ 2563.20.
$ 2560. New York, April 14, 1857.
At sight, pay to Dura Wadsworth, or order, two thousand five hundred and sixty dollars, value received, and charge the same to the account of Cameron, Bashford, & Co.
To Messrs. Lawrence & Aspinwall, Merchants, Boston.
$25 60 X 1.0 0$ = $2 5 63.20.
Rule. — Multiply the face of the bill or draft by 1 increased by the rate per cent. of premium, or by 1 decreased by the rate per cent. of discount, expressed decimally. The product will be the value of the given bill or drajt.
Note. — When there is interest to be computed, it must be reckoned on the face of the bill or draft. When other than the value or cost of the bill or draft is to be found, proceed as in percentage.
2. What is the value of the following bill, or draft, at J of 1
Thirty days after date, please pay to the order of Robert S. Davis if Co., one thousand nine hundred fifty T5jjo- dollars, value received, and charge the same to our account.
To George Reed, Broker, Boston.
3. What is the cost of a draft on Philadelphia, at J per cent, premium, the face being $ 2000?. Ans. $ 2010.
4. What must be the face of a draft, at 2 per cent, discount, to cost $ 1744.40?
5. What is the cost of a 60 days' bill on Pittsburg to the amount of J, 600, at 1 per cent, discount, and interest off at 6 per cent.? Ans. $ 587.70.
6. What is the cost of a 30 days' bill on Boston, at f per cent. premium, and interest off at 6 per cent., the face of the bill being § 9256.40? Ans. $ 9240.20.
7. What must be the face of a 30 days' bill which will yield $ 9240.20 when sold at $ per cent, premium, and interest off at 6 per cent.?
8. A 15 days' draft yielded $ 1190.184 when sold at 1£ per cent, discount, and interest off at 6 per cent. What was the face of the draft? Ans. $ 1212.
494. A Foreign Bill of exchange is one of which the drawer and drawee are residents of different countries.
Keene & Lee.
495. Foreign bills are usually drawn in sets; that is, at
the same time there are drawn two or more bills of die same tenor and date, each containing a condition that it shall continue payable only while the others remain unpaid. Each bill of a set is remitted in a different manner, and when one of the set has been accepted and paid, the others become worthless.
In reckoning the value of foreign bills of exchange, an acquaintance with the moneys of account of foreign countries is required.
496i The moneys of account of the principal places of commercial importance, with the par value of the unit, expressed in United States money, are shown in the following
Cities and Countries.
London, Liverpool, &c,
Hamburg, Lubec, &c,
Venice, Milan, &c,
Note 1. — Grani is the plural of grano, carlini of carlino, centeshii of ceniesimo, lire of lira, tari of taro.
Note 2. — The moneys of account in Brazil nre of the same denominations as in Portugal; in Mexico, Central America, New Granada, Chili, Venezuela, Bolivia, Peru, and Buenos Ayres, accounts are kept in pesos, or dollars, of 8 reals each; in Cuba accounts nre kept in dollars equal 8 reals plate, or 20 reals vellon, equal $ 1; in British American Possessions accounts are kept in the denominations of sterling money, but of a depreciated value compared with the currency of the same denominations in England, except in Canada, where, by an act of the Colonial Parliament, passed in 1857, the decimal currency of th« United States has been adopted.