The charges for which the holder of a dishonoured bill is entitled by the practice of merchants to draw on his indorser, over and above the principal represented by the bill, are:
(a) The legal interest on the sum for the time during which the bill has been overdue.
(b) The notary’s noting or protesting charges.
(c) The cost of re-draft; to which, in the case of a foreign bill, brokerage and the amount of re-exchange must be added.
ADVERTISEMENTS:
Re-exchange on a foreign bill is represented by such difference in the value of the bill as occasioned by the difference existing on the day of re-drawing between the rates of exchange current in the two countries, viz.: where the bill was drawn and where it was made payable. (As to rate of exchange, see Chapter XI., page 180.)
A statement of all such charges is therefore sent along with the re-drafty which merchants commonly call re-exchange account.
Acceptance supra Protest.-
When before the maturity of a bill the acceptor to it becomes bankrupt, the law grants the holder no claim to security from the indorsers or the drawer.
ADVERTISEMENTS:
The step usually taken is, therefore, for the holder to demand better security from his indorsers, which should be done through a notary, and, on its being refused, have the bill protested for better security.
A protest for better security cannot, however, be enforced at law like a protest for non-acceptance or non-payment, since the holder must wait till the bill falls due before he can bring an action against any of the parties; but it serves as a notice of the circumstances, and, what is most important, gives occasion to an acceptance for honour or supra protest, the effect of which is that the bill maybe circulated again, while such an advantage could not be had otherwise.
An acceptance for honour or supra protes-t may take place only in the case of dishonour for non-acceptance and in the case of protest for better security, since the law does not admit of two acceptances on the face of one bill, unless upon the intervention of a protest.
In either case, however, the bill must not be overdue when the acceptance takes place.
ADVERTISEMENTS:
A bill may be accepted supra protest by any person except the drawer and indorsers, for the honour of any of the parties to it. The name of the person for whose honour the bill was accepted, must, of course, be stated in the form of acceptance, which usually runs thus:- Accepted for the honour of …. or, accepted S. P. for the honour of …. .
The acceptor for honour undertakes all the liabilities of the person for whose honour he accepts the bill; no payment can, however, be claimed from him unless the bill has been primarily presented to the drawee on maturity, and protested for non-payment.