Cases have recently arisen in the Courts of New York and Louisiana, wherein it has been decided that Bills at Sight are entitled to grace.

This is at variance with ordinary usage among the Banks of New York, Philadelphia and Baltimore, although recognised for many years at Boston.

Our readers will find this subject discussed at page 144 of the present volume, in an article written by the Cashier of one of the Virginia Banks. It is a point of great importance to bankers and brokers, and it is desirable that the subject should be closely examined by those who deal in commercial paper.

While any uncertainty exists upon the point in question, it would be prudent for those who purchase bills payable at sight, to take them with the words "without grace" inserted.

Our banking friends should be provided with "Story on Bills," and also with "Byles on Bills of Exchange," published at Philadelphia, 1848.

The following cases and extracts will furnish our readers with the latest authorities upon these topics:

Grace on Sight Bills.

Alanson Trask et al. vs. Warwick Martin and Joseph S. Lake.—This was a suit on a sight bill drawn by Martin & Co., of New Orleans, on James S. Lake & Co., New York. The cause was tried in the New York Common Pleas, before Judge Ingraham, on the 9th October, 1848. E. Terry, Esq., for the plaintiffs produced the original draft, proved the signatures of the drawers, that the bill was presented for payment and duly protested for non-payment, and notice given, and here rested the

case.

Edwards Pierrepont, Esq., the defendant's counsel, thereupon moved for a non-suit, on the ground that the bill had not been presented for acceptance, and that grace had not been allowed; and insisted that sight bills were entitled to the same days of grace as time bills, and fortified

this position by citing many English and American authorities. The court after holding the case under advisement, sustained the position taken by the defendant's counsel and granted the non-suit.

New York, October, 1848.

A very important case has lately been decided in New Orleans, which appears to have created considerable excitement in that city, and the decision will, if confirmed by the Supreme Court of Louisiana, lead to a revolution in the system of drawing drafts, upon this and other northern cities. It seems that a certain banking firm in New Orleans had drawn several bills, payable at sight, upon their correspondent banking establishment in New York, which bills were not paid on presentation, the drawers failing between the time of the drawing of the bills in New Orleans, and their arrival in New York. The bills were protested on the first day of presentation and refusal to pay, and returned for recourse against the drawers. The latter, being sued, pleaded in defence that three days of grace were not allowed on the bills, and that the demand and protest should have been made on the third day following the first demand. The holders of the bills replied that, by custom of merchants in New York, no days of grace upon sight bills were given, and that it was usual to protest on a first refusal, and offered to prove this by the evidence of a number of exchange dealers. To the introduction of evidence to this effect the defendants (drawers of the bills) objected, because the elementary writers and the various judicial dicta held very postively that days of grace must be given on sight drafts, and no evidence of custom could be admitted to control or vary positive law. The learned judge concurred with the defendants' counsel, and the plaintiffs, holders of the bills, were non-suited.

To the Editor of the Bankers' Magazine:

Merchants' Magazine.

Boston, Aug. 25, 1848.

Our Banks have always considered that drafts at sight were entitled to three days of grace, and this you are aware is the doctrine maintained by all the modern treatises on Bills of Exchange. It was formerly the practice here not to allow days of grace on promissory notes, unless the words "with grace" formed a part of the notes. As this sometimes gave rise to questions between parties, a law was passed in 1824, declaring bills of exchange and promissory notes to be entitled to grace. I am aware that a different usage has prevailed with the Banks of N. Y. and other cities, but I have always considered that they assumed a great responsibility, as it is well known that our Courts never allow usage to take the place of an established principle of law, or to be pleaded as an excuse for its infraction. This usage has at length come under the cognizance of the Courts of Louisiana, and the holders of a bill drawn on N. Y. payable at sight, were non-suited on the ground that the bill was protested before the expiration of the days of grace. You no doubt have seen a report of the case, if not, you will find a notice of it in Hunt's Magazine, vol. 19, No. 2, August, 1848.

Our Banks have been thrown into some embarrassment in conse

quence of a decision of the late Justice Story. In a case which was tried before him in 1841, he designated drafts on banks as checks, and declared that they were not entitled to grace, not only drafts at sight, but also those payable on a day certain. Since then, our banks have considered that their security required that they should protest on the first day for non-payment, and again on the third day of grace for nonpayment. A CASHIER.

The following Etxracts are from Byles' Treatise on Bills of Exchange.

Of the Presentment for Acceptance.

Advisable in all cases. Necessary where Bill is drawn at or after sight. When to be made. At what hour. Excused by putting Bill in Circulation. Or by other reasonable Cause. To whom it should be made. What time may be given to the Drawee. Consequence of Negligence in Party presenting. Proper Course for Holder when Drawee cannot be found, or is dead. Pleading.

It is in all cases advisable for the holder of an unaccepted bill to present it for acceptance without delay; for, in case of acceptance, the holder obtains the additional security of the acceptor, and, if acceptance be refused, the antecedent parties become liable immediately. It is advisable, too, on account of the drawer, for, by receiving early advice of dishonour, he may be better able to get his effects out of the drawee's hands.

But presentment for acceptance is not necessary in the case of a bill payable at a certain period after date. It is said, however, that it is incumbent on a holder who is a mere agent, and on the payee, when expressly directed by the drawer so to do, to present the bill for acceptance as soon as possible; and that, for loss arising from the neglect, the payee must be responsible, and the agent must answer to his principal.

Presentment for acceptance is necessary, if the bill be drawn payable at sight, or at a certain period after sight. Till such presentment there is no right of action against any party; and unless it be made within a reasonable time, the holder loses his remedy against the antecedent parties.

What is a reasonable time, depends on the circumstances of each particular case, and is a mixed question of law and fact; although reasonable time in general, and reasonable time for giving notice of dishonour in particular, is clearly a question of law. Plaintiff, on Friday, the 9th, at Windsor, twenty miles from London, received a bill on London, at one month after sight, for £100. There was no post on Saturday. It was presented on the Tuesday. The jury thought it was presented within a reasonable time, and the Court concurred.

A bill drawn by bankers in the country on their correspondents in London, payable after sight, was indorsed to the traveller of the plaintiffs. He transmitted it to the plaintiffs after the interval of a week, and they, two days afterwards, transmitted it for acceptance. Before it was presented to the drawees, the drawer had become bankrupt; the drawees, consequently, refused to accept. Had the bill been sent by the traveller to the plaintiffs, his employers, as soon as he received it,

they would have been able to get it accepted before the bankruptcy. "This is," says Lord Tenterden, "a mixed question of law and fact; and, in expressing my own opinion, I do not wish at all to withdraw the case from the jury. Whatever strictness may be required with respect to common bills of exchange, payable after sight, it does not seem unreasonable to treat bills of this nature, drawn by bankers on their correspondents, as not requiring immediate presentment, but as being retainable by the holders for the purpose of using them, within a moderate time (for indefinite delay, of course, cannot be allowed,) as part of the circulating medium of the country." The jury concurred with his lordship, that the delay was not unreasonable. Where the purchaser of a bill on Rio Janeiro, at sixty days' sight, the exchange being against him, kept it nearly five months, and the drawee failed before presentment, it was held that the delay was not unreasonable. "The bill," says Tindal, C. J., "must be forwarded within a reasonable time under all the circumstances of the case, and there must be no unreasonable or improper delay. Whether there has been, in any particular case, reasonable diligence used, or whether unreasonable delay has occurred, is a mixed question of law and fact, to be decided by the jury, acting under the direction of the Judge, upon the particular circumstances of each case."

But where a bill, payable after sight, was drawn in duplicate on the 12th of August, in Newfoundland, and not presented for acceptance in London till November 16, and no circumstances were proved to excuse the delay, it was held unreasonable, the Court laying some stress on the fact that the bill was drawn in sets.

Presentment should be made during the usual hours of business.

The holder may, however, put the bill into circulation without presenting it. "If a bill, drawn at three days' sight," says Mr. Justice Buller, "be kept out in circulation for a year, I cannot say that there would be laches; but if, instead of putting it into circulation, the holder were to lock it up for any length of time, I should say that he would be guilty of laches." "But this cannot mean," says Tindal, C. J., “that keeping it in hand for any time, however short, would make him guilty of laches. It never can be required of him instantly on receipt of it, under all disadvantages, to put it into circulation. To hold the purchaser bound by such an obligation would impede, if not altogether destroy, the market for buying and selling foreign bills, to the great injury, no less than to the inconvenience, of the drawer himself." Two bills, one for £400 the other for £500, were drawn from Lisbon, on May 12, at thirty days after sight, indorsed to G. at Paris, and by G. to R. at Genoa, and by R. endorsed over. They were not presented for acceptance till 22nd August. The jury found, and the Court concurred, that the bills were, under the circumstances, presented within a reasonable time.

Illness or other reasonable cause, not attributable to the misconduct of the holder, will excuse. But the holder must present, though the drawer have desired the drawee not to accept.

The presentment must be made either to the drawee himself, or to his authorised agent. The holder's servant called at the drawee's

residence, and showed the bill to some person in the drawee's tan yard, who refused to accept it; but the witness did not know the drawee's person, nor could he swear that the person to whom he offered the bill was he, or represented himself to be so. Lord Ellenborough, "The evidence here offered proves no demand on the drawee, and is, therefore, insufficient."

When the bill is presented, it is reasonable that the drawee should be allowed some time to deliberate whether he will accept or no. It seems that he may demand twenty-four hours for this purpose, (and that the holder will be justified in leaving the bill with him for that period;) at least, if the post do not go out in the interim or unless, in the interim, he either accepts or declares his resolution not to accept. If more than twenty-four hours be given, the holder ought to inform the antecedent parties of it.

If the owner of a bill who leaves it for acceptance, by his negligence enables a stranger to give such a description of it as to obtain it from the drawee, without negligence on his part, the owner cannot maintain trover for it against the drawee.

In case the bill is directed to the drawee at a particular place, it is to be considered as dishonoured if the drawee has absconded. But, if he have merely changed his residence, or if the bill is not directed to him at any particular place, it is incumbent on the holder to use due diligence to find him out. And due diligence is a question of fact for the jury. If the drawee be dead, the holder should inquire after his personal representative, and, provided he live within a reasonable distance, present the bill to him.

In an action against the drawer on non-acceptance, it is not sufficient to allege mere non-acceptance, presentment for acceptance must be alleged.

Of Presentment for Payment.

A personal demand on the drawee or acceptor is not necessary. It is sufficient if payment be demanded at his usual residence or place of business, of his wife or other agent; for it is the duty of an acceptor, if he is not himself present, to leave provision for the payment. And it is sufficient if payment be demanded of an agent who has been authorized to pay, or has usually paid bills for the drawee. Thus, where a country bank note was made payable both at Tunbridge and in London, presentment in London was held sufficient, though it was proved, that, had it been presented at Tunbridge, the nearest place, it would have been paid.

The bankruptcy or insolvency of the drawee is no excuse for a neglect to present for payment; for many means may remain of obtaining payment, by the assistance of friends or otherwise. It has been held in the King's Bench, that the shutting up of a bank, when any demand there made would have been inaudible, is substantially a refusal by the bankers to pay their notes, to all the world. But it was decided in the same case, on error in the Exchequer Chamber, that an allegation in the declaration, that the makers became insolvent, and ceased, and wholly declined, and refused, then and thenceforth to pay, at the place specified,