Scottish Court of Session Decisions

Subject_1 BILL OF EXCHANGE.
Subject_2 DIVISION IV.

Possessor's recourse against the Drawer and Indorser.
Subject_3 SECT. I.

Whether value presumed given, by the Person who holds the Bill.

Mrs Auchinleck
v.
Ensign Millar of Mugdrum

Date: 15 February 1715
Case No. No 120.

An indorsee to a bill is presumed to have given value for it.

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Lieutenant Douglas draws a bill upon Ensign Millar, for paying to himself, or order, L. 30 Sterling, as the balance of a stated account betwixt them. This bill is accepted, and by the Lieutenant indorsed thus ‘Pay to Grace Douglas, or order, the within contents’; and further indorsed by her to Mistress Auchinleck in the same way. The acceptor suspends upon a back-bond relative to, and restrictive of, the bill granted by the drawer to him. And the question being, Whether an indorsation, not bearing value received from the indorser, does so denude him, that the contents of the bill could not be affected by his creditors, or by an obligation restrictive of the bill?

It was alleged for the suspender, That we, having scarce any laws or decisions touching the present question, it falls naturally to be determined by the laws and practice of other nations. And, as to this, the French King's Ordinance in 1673 is plain, That the property of such a bill is not transmitted, where value is not mentioned to be received. And Mr Savary, a French writer, in his Avis & Conseils sur le Commerce, in the 34th avis states the present case plainly, and determines it in the suspender's favour. 2do, Mr Scarlet, who does not confine himself to the customs of any particular nation, but takes in what is law and practice all Europe over, does, in his 12th rule of the 8th chap. thus determine the present case, ‘if the indorsement have no more than, ‘Pay for me to N. N.’ and it be not expressed from whom the value was received, then it is looked on as no more than a single order; and the indorser is still considered as the principal possessor of the bill.’ 3tio, Supposing the indorser had actually gotten payment from the acceptor, and granted discharge; and that, upon clearance betwixt the drawer and acceptor, the drawer had got up this bill, he would be no doubt justly founded against the indorsers for the repetition of the money; because it would stand proven, by the discharge, that they had uplifted the money by virtue of a naked order, which did not bear that they had paid the value; and which would necessarily force them to prove, by his oath, that value was paid, though not exprest. And, it is certain, there is still recourse for repetition where value is not expressed; but none where it is expressed, unless the repeater will redargue value by the receiver's oath.

Answered for the charger, That the French King's Ordinance is no rule to us; for, by it, a blank indorsation in France is void, which, nevertheless, by the laws of Scotland and England is valid. And, therefore, that article, above cited, being expressly contrary to our daily custom, ought not to be regarded. And in general it is a rule with us, and in England, That, in all bills, value is presumed to have been paid by the possessor, except it be otherwise made appear, either from the form of the draught of the indorsement, or from the circumstance of the persons; or by oath of party. Thus, No 177. p. 1535, value was presumed to have been given by the possessor of a bill, though it bore not value received, unless it were proven by writ or oath that no value was paid. Again, 16th January 1709, Swinton and Executors of Bonnar contra Representatives of Thom, No 118. p. 1536., by an order to deliver to a bearer a sum of money, and take his receipt, value was presumed to have been given, though it did not express value received. Further, where the statutory law of a country allows indorsations to be signed blank, the possessor is still to be looked upon as full proprietor of the contents. Now, in the act 1696, anent blank writs, indorsations of bills are excepted. The reason whereof is, That they might pass blank through many hands for the expedition of commerce. Therefore, by our law, blank indorsations are authorised. 2do, The form cited out of Scarlet, (Pay for me to N.), is like a factory or mandate, and does not denude the indorser of the property of a bill. But this cannot be applied to the present case, where the indorsements on the bill are not in that form.

The Lords found, the indorsation presumes value, and cannot be taken off, but by a contrary probation.

For Millar, Leith. Alt. Spotiswood. Clerk, Sir James Justice. Fol. Dic. v. 1. p. 99. Bruce, No 67. p. 81.