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. X.

Effect of Fraud on the part of the Drawer; and of False Description of the Value.

James Arthur, Skipper,
v.
Duncan Oldcorn, Merchant

Date: 29 January 1717
Case No. No 73.

A shipmaster drew in favour of the freighter, at the freighter's desire, on a merchant to whom the goods belonged. The bill bore “value received.” Yet, the merchant refusing, the freighter, previously liable to the shipmaster, had no recourse on him as drawer.

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Duncan Oldcorn having entered into a charter-party with James Arthur, skipper; whereby James was to perform a voyage to Rotterdam, and to take in such goods as the freighter pleased, and to return with another loading to Alloa; and both at a certain freight, payable within 24 hours after livering at the respective ports, and with all average, and other dues, used and wont: The ship being stranded in a storm, the skipper was obliged, for getting her saved, to pay a great sum, which he borrowed from Oldcorn's factor in Holland, to whom the goods were consigned, and drew a bill for the same upon Oldcorn: This he refused to accept, till the skipper and he should count, that it might be known, what proportion of this great average belonged to him to pay, and the ship should bear. Accordingly, the same was adjusted betwixt him and the skipper after his return, and a bill drawn on the owners by the skipper for the ship's part, which they paid; but Oldcorn then alleging, that (as to the cargo's part of the average) the goods, though shipped by him, belonged to Mr Blair merchant in Edinburgh, upon whom the skipper ought likeways to draw for the proportional part; the skipper accordingly drew upon Blair payable to Oldcorn; but Blair refuting to accept, Oldcorn returns upon the drawer; who suspends, on this reason, That, though the bill did bear value received, yet the true cause of granting it was for Mr Oldcorn's relief of the skipper's Dutch bills which he drew for paying the salvage pro tanto; and that the charger was debtor himself in that sum, as the proportional salvage of the cargo paid out by the skipper in Holland; and therefore, this being a liquid debt, instantly instructed, and the charger being both possessor of the bill, and merchant-freighter, loader of the goods, he by law is liable in that sum; for, though sometimes compensation be not good on a debt of the indorser's, yet it is always good upon a debt of the possessor's.

Answered for the charger: That, though he was freighter, yet the said Mr Blair was proprietor, of the goods; and, by bills of loading, the goods were to be delivered at Rotterdam to him or his order, (he paying the freight and average conform to the custom of sea); and seeing the skipper had delivered out the goods to Mr Blair's order at Rotterdam, sibi imputet, who might and ought to have retained them till he was paid.

Replied for the suspender: That the bill of loading bears, that the goods were all shipped by the charger, and by his order to be delivered to Mr Blair, or his Order, at Rotterdam; and that the clause in the bill of loading (he or they paying freight and average) was but an additional security to the ship-master for the same, but did not innovate or annul the charter-party; neither was it the practice (and it would be destructive to trade if it were always so) to the master to plead the right of hypothec, and not return the goods till paid, when he is sufficiently secured by charter-party.

‘The Lords found, That the charger could not have recourse against the drawer of the bill charged on.’

Act. Abercromby. Alt. Jo. Ogilvie. Clerk, Roberton. Bruce, No 51. p. 69.