Lesson Twelve

Common Procedures In Handling a Bill of Exchange

1.  Drawing

Drawing means the act of the drawer in filling up the bill of exchange with particulars（详情） as to the name of the drawee (or payer), the amount payable, the date of payment and the name of the payee and after signature the drawer may present the bill to the drawee through the medium of the payee or a banker . With regard to the payee, the drawer may use one of the following methods:

(1)    restrictive payee, such as (pay--- Co. only) or (Pay … Co. Ltd. Not negotiable).  Such a bill of exchange is not negotiable or transferable and only the payee named can collect the amount;

(2)    to order, such as (Pay--- Co. Ltd. Or order) or (Pay to the order of … Co. Ltd.) Such a bill of exchange can be negotiated or transferred to another party after endorment by the payee or the amount may be collected by the payee himself;

(3)    to bearer, such as (Pay bearer) or (Pay to … Co., Ltd. Or bearer). Such a bill of exchange does not need the endorsement of the payee and can be negotiated or transferred to another party merely by delivery.

2. Presentation

Presentation means the act of the holder of the bill of exchange in presenting the bill to the drawee asking the latter either to pay or to accept the bill. The drawee’s receiving or seeing the bill is called ‘Sight’(即期汇票). If the bill is a sight or demand bill, the drawee has to pay the amount at once; if it is a usance or time bill the drawee has to make his acceptance and pay the amount on the date due.

3. Acceptance

Acceptance means the act of the drawee to show his responsibility by accepting the usance bill for payment at a fixed future date by writing the word “Accepted”, marking the date of acceptance and signing on the face of the bill. The drawee after making the acceptance is called the acceptor and is responsible to pay the amount on the due date of the usance bill.

4. Endorsement

A bill of exchange is a negotiable instrument(可流通票据), and is circulative or transferable in the international money market. In the case of “to order” bills of exchange, endorsement is the procesure of negotiation or transfer by the payee by signing this name on the back of the bill (now the payee(收款人) is called the endorser背书人), either blank endorsed which makes the bill payable to bearer or holder, or endorsed with the name of the transferee and his order, who is called endorsee. After endorsement and delivery of the bill to the endorsee, the right of receiving the amount is transferred to the endorsee or the holder in due course. The bill can therefore be negotiated or transferred many times after such endorsements.

The holder of a bill of exchange has several choises open to him. He can keep the bill until it is due for payment and then present it to the acceptor. He can transfer the bill to another person, i.e. he can ‘negotiate’ the bill; the other person becomes a holder in due course. A special form of negotiation exist where the holder passes the bill to a bank or discount company, and this amounts to a third choice. The bank or discount company concerned may be prepared to ‘discount’ the bill by paying immediate cash for the bill at a little less than its face, i.e. after deducting charges and interest based on the current rate of discount, and, then, will on the due date of the bill collect the full amount from the acceptor. The holder may be satisfied to receive a smaller amount as he can have the money before the bill falls due. The new ‘holder in due course’ (the bank, etc.) may hold the bill until it matures or may rediscount the bill in turn. It is in this way that bills enter the financial life. It will be appreciated that if there are two or more financial houses of standing as parties to the bill (either as accepts or endorsers), all automatically guaranteeing that the bill will be paid on its due date, its value and acceptability approach closely to that of cash itself.

A holder in due courses（当期持票人） is a holder who takes a bill, which is complete and regular on the face of it, in good faith and for value and without notice of any defect in the title of the person negotiating it to him, and before it was overdue and without notice that it was dishonoured(拒付).

5. Payment

Immediate payment will be made by the drawee on presentation by the holder in due course if the bill of exchange is at sight or on demand without the necessity of acceptance. If it is a usance or time bill, the drawee will accept it and pay the amount on due date.

6. Protesting

When a bill has been duly presented for acceptance or payment and the acceptance or payment has been refused, the bill is said to be dishonoured for non-acceptance or non-payment. Upon dishonour the holder has an immediate right of action against all parties (including endorsers) to the bill. The holder must normally give a format notice of dishonour to all the parties he wishes to make a liable.

In view of the great importance of bill of exchange in international trade, most countries have adopted special procedure for establishing proof that a bill has , in fact, been dishonoured. In many countries, under the procedure called ‘noting’ the holder of a bill which has been presented and dishonoured hands the bill to a notary public for re-presentment. The notary re-presents the bill; if it is again dishonoured, he ‘notes’ on the bill the date, his own charge, the number in his register, and his initials; he also attaches a ship stating the reason given for the dishonour. This ‘noting’ can usually be dispensed with but it is a useful preliminary to ‘protesting’, as once a bill has been ‘noted’, the ‘protest’ can be applied for on any date in the future as may be convenient.

The protest is a document under seal drawn up by the notary, attesting the dishonour of the bin and declaring the holder’s intention of recovering the amount of the bill and expenses. A protest is recognized in the courts of most countries as sufficient evidence that a bill has been dishonoured. ‘Protesting ‘ is necessary in the case of all foreign bills that have been dishonoured.

Notes:

1.       drawing   出票

2.       restrictive payee      限制性受款人

3.       negotiate  转让，流通，议付

4.       transfer（权力，财产）转让，（单据股票等的）过户

5.       endorsement    背书。

6.       delivery    递交，交割，提交

7.       presentation     提示

8.       acceptance(a/cc)承兑

9.       negotiable instrument      可转让票据，流通证券

10.   endorsee   被背书人

11.   discount   贴现

12.   title   所有权，权利

13.   dishonour 拒绝承兑，拒付

14.   protest      拒付，拒付证书

15.   noting and protest

16.   notary public （public notary）公证人，公证员

17.   recovering the amount of the bill   追补汇票的款项

Translate：

1.    限制性受款人 restrictive payee

2.    凭指示 to order (of)

3.    持票人     bearer (holder)

4.    对--- 提示汇票      present the bill to

5.    即期汇票        sight bill

6.    远期汇票        usance(time) bill

7.    到期付款        to pay the amount on due date

8.    承兑远期汇票        to accept the time bill

9.    可转让票据    negotiable instrument

10.   国际货币市场  international money market

11.   背书人与被背书人  endorser endorsee

12.   议购汇票   to negotiate the bill

13.   贴现公司   discount company

14.   现行贴现率  current discount rate

15.   增值   appreciate

16.   拒绝承兑汇票  dishonour

17.   即期付款        to pay at sight (on demand)

18.   公证人            notary public

19.   拒付证书        protest

20.   追偿损失        recover one’s loss