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. IV.

Of Bills with clauses stipulating Annualrent and Penalty.

Thomas Dinwoodie
v.
William Johnston

Date: 28 June 1737
Case No. No 22.

Found in conformity with No 20. supra.

Bills may be signed by notaries.

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On the 2d February 1728, Johnston drew a bill upon Dinwoodie, payable at Martinmas thereafter, with annualrent from the date; the acceptance of which, in regard Dinwoodie could not write, was adhibited by a notary before two witnesses. Of this bill he intented reduction on the following reasons: 1mo, Because it was accepted by a notary: 2do, In regard it bore annualrent from the date: And, in support of the first, it was observed, That regularly no writing is valid, unless it be either holograph, or duly signed before witnesses; from which rule, bills of of exchange are excepted, for the fake of commerce. It is true, if a person cannot write, the law allows notaries to sign for him; but then it is necessary, in order to render such an obligation valid, that the witnesses be insert; of consequence, if the writing does not admit the inserting them, which is the case of bills, it is illegal to attempt to subscribe such writings by notaries: And here the notary seems to have been sensible of this difficulty, as he has attempted to introduce a new form, not practised in the subscription of regular deeds signed by notaries; namely, to insert the witnesses names and designations in his doquet, which does not come up to the law, it not being in the body of the writ, but in græmio, as it were, of the party's subscription, for such the notary's declaration is, when regularly gone about. In short, this writing does not come under any known description in law, as it is neither holograph, nor bears the writer's name and witnesses, nor is a bill, such as people are generally acquainted with.

With respect to the second, it was pleaded: That bills are not designed to be standing or abiding securities; therefore they ought not to be so conceived as to bear interest from their date, and thereafter, during the not payment; as that is plainly exceeding the proper use, for which they were at first introduced; and altering the very nature of them: e. g. bills, though carrying interest ex lege, after the term of payment, are simply moveable; and, as such, fall under the jus mariti and relictx; but a bill, in this form, would be heritable in these respects as carrying interest ex pacto. And, though the acts 1681 and 1696 do not, in express words, prohibit such a stipulation; yet it is plainly enough implied, by enacting, That bills shall carry interest from the term of payment; which shows it was taken for granted, they are not a security carrying interest ex pacto; therefore this clause, as incongruous to the nature of the writing, must be fatal to it, in the same manner, as if it had born a penalty, which is only a greater deviation from the design of bills.

Answered to the first: That, as bills are a kind of security, which were introduced by custom, and not by statute, they do not fall under any of the regulations, necessary to be observed, in the form of other writings; consequently arguments, drawn from the statutes regulating the form of other deeds, are not in point. At the same time, it may not be improper to observe, That the subscription of one or two notaries is, in all things, equiparate to the subscription of the party; therefore, where nothing but the subscription of the party is requisite to constitute a valid obligation, it follows, that a notorial subscription is equivalent. Nor is there any thing in the observation, That the witnesses are not designed in the body of the writ, seeing the acceptance is part thereof, and the notary's docquet subjoined to it, is likewise to be considered as part of the writ, as much as the clause in other writings, in witness whereof, &c. It is true, the form of this bill is uncommon, yet it is not so on account of any thing bad, but for being devised in a way, which, if enjoined by law, would, in a great measure, take away the cause of that odium, which many have to bills: For, instead of a mark, instead of initials, which are sufficient to validate such a writing, there is here the subscription of a notary, whose faith, in the affair of bills is great; and two witnesses, specially required to his being desired to subscribe, both fully designed and signing with him: So that there is no room left to doubt of the transaction's being fair and honest, as well as valid.

To the second, it was answered: That there is no reason for annulling a bill, because it bears a stipulation for interest from the time of the loan; as it is very common to accumulate the annualrent, from the date to the term of payment; and so render it a sors, bearing interest, in case the acceptor does not pay at the day prefixed; although it is plain he is thereby put in a worse condition: How hard then would it be, for the defender to lose his debt, for want of skill to cover the transaction? If the thing be lawful, it is not the worse for being fairly and openly expressed. As to the stipulation of annualrent on a bill before the term of payment's being discharged by the acts referred to, it was answered, 1mo, Granting it were true, still the adjecting such a stipulation is not sufficient to annual such a writing, but only that the stipulation should be ineffectual; for, notwithstanding such adjection, it would yet remain a bill, as having all the essentials of one a drawer and an acceptor: So that the rule, Utile per inutile non vitiatur, behoved to take place. And, as to the instance of a bill with a penality being found null, it does not touch the present question; since a penalty may be said not to be the subject of a bill, more than a legacy or donation. But, 2do, Neither of the acts will bear such a construction, the design thereof being only to authorise charges of horning to pass upon bills, which before were only the subject of an ordinary action; and therefore we are not to look there for a description of such deeds.

The Lords repelled the reason of reduction, founded on the notary's acceptance, and likewise the objection, That the bill bore annualrent from the date. See Writ.

Fol. Dic. v. 1. p. 96. C. Home, No 61. p. 106.