Scottish Court of Session Decisions

Subject_1 BILL OF EXCHANGE.
Subject_2 DIVISION I.

Of the Object, Nature, and Requisites of Bills.
Subject_3 SECT. I.

Money only, the proper Subject of Bills.

William Douglas
v.
Colonel Erskine

Date: 18 February 1715
Case No. No 2.

Bills for fungibles are not privileged as bills of exchange. Indorsee considered as an assignee.

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Colonel Erskine drew a bill upon his salt-grieves of Torrie or Kincardine, to deliver 420 bolls of salt to Archibald Ronaldson, for which he had received satisfaction. Ronaldson indorsed the bill to William Douglas for value received, who pursued the Colonel to deliver the salt, who alleged, 1mo, That a salt-bill had not the privilege of a money-bill, which passes de mam in manum; but that bills for salt are liable to all exceptions as other debts, and an indorsee is but an assignee. And in this case, the true cause of the bill was a mutual bargain, whereby Ronaldson was to pay the salt in meal, or the Colonel to pay the value of 200 bolls of meal in salt; and, as the Colonel drew the salt-bill libelled, so Ronaldson gave an obligement, of the same date, to deliver 200 bolls of meal to the Colonel; and having broke shortly after, he absconded, never delivered the meal, nor required the salt for the space of several years, till of late, that the pursuer obtained from him an indorsation. The defender also alleged, That he had retention, in respect of the counter-obligement by Ronaldson never implemented; and that, the bill having lain over for so many years, the counter-obligement was relevant and competent against Ronaldson and his assignee or indorsee.

‘Which, the Lords Sustained.’

Dalrymple, No 139. p. 193. *** The same case is reported by Bruee:

Colonel Erskine having drawn a bill upon his salt-grieves folt 420 bolls of fair, payable to Archibald Ronaldson, merchant in Leith, the.: bill is indorsed to the said William Douglas; but, at the time of granting the bill, the Colonel took bond from Ronaldson for 200 bolls of meal, the price: whereof was equivalent to that of the 420 bolls of salt; neither party having performed their engagements, and Ronaldson breaking in the meantime,. Douglas the indorsee, after five years and odd months, protests the bill for not acceptance, and insits against the Colonel for delivery of the salt, or payment of the price thereof: And the Lord Ordinary having found, That the bill, not being a money bill, was only of the nature of an assignation, and that whatever, was competent, against Ronaldson the indorser, was competent against Douglas the indorsee:

Against this it was reclaimed, and alleged for the pursuer, That where the law makes no distinction neither can we. Now de praxi, inland bills for fungibles, pass as current as money bills; nay, by express act of Parliament, 1696, cap. 36. privilege of foreign bills is extended to inland ones, without distinction, whether drawn for money or other fungibles; and were it otherwise, the currency of commerce would be very much stopped. 2do, That this bill had all the requisites of a bill of exchange, viz. a drawer, a person on whom it is drawn, and another to whom it is payable, and that for value received; therefore it must have the same privileges.

Answered for the defender, That as, regularly, all objections are good against the assignee, that are good against the cedent; so there is here no exception from the rule: For though bills of exchange be indeed excepted, yet the present bill can never have the privilege of these. For by that way of arguing, even, a receipt of goods would not be good against an indorsee, if the receipt were not marked upon the back of the precept. And the reason of the difference is, That bills of exchange are in place of money, and contrived to save the trouble of portage, and therefore must have a course as free as it has: But bolls of salt, or the like, cannot pass in that manner, nor is it useful for commerce that they should; and therefore have not the privilege of bills, but are only as assignations: Nor does the act 1696 give them that privilege. For, 1mo, The act only concerns diligence upon bills, but determines not how far exceptions competent against the cedent, are good against the assignee. 2do, That act concerns only money bills; for it only extends the act 1681 anent foreign bills, to inland ones of the same nature; but the act 1681 concerns only money bills, as is plain from its rubrick, narrative, statutory part, &c. Consequently the act 1696 concerns only money bills also: And therefore the said, two acts rather argue against the pursuer, thus, That however our laws have justly given privilege to money bills, yet the legislature never thought it useful or necessary to allow the same privilege to precepts for goods. To the second, answered, That this bill wants an essential for giving it the privilege acclaimed, viz. that it is not a money bill, and no others are favoured by the law.

The Lords found, That the bill not being for money, but a salt bill, and not protected, nor diligence done thereon for payment, during the space of five years and some months; therefore William Douglas, the indorsee, was only to be considered as a common assignee.

Act. Sir. Tho. Wallace. Alt. Ro. Dundas. Clerk Roberton. Bruce, No 82. p. 98.