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. II.

Negotiation of Bill.

Langley
v.
Hogg

Date: 17 June 1748
Case No. No 144.

No recourse where the bill is not duly negotiated, altho' the acceptor was bankrupt.

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James Morison of Aberdeen, by his bill, 16th March 1744, drawn on, and accepted by Thomas Morison of London, his son, ordered the said Thomas Morison, 45 days after date, to pay to Mr William Hogg, L. 50 Sterling, value in account with him. This bill was indorsed by Hogg to Adam Watkins, for value received, and by him re-indorsed to Thomas Langley, who protested for not payment no Sooner than the 5th of May, and thereupon brought an action of recourse against Mr Hogg; whose defence was; not duly negotiated, in respect the 45 days elapsed upon the 30th of April, on which day, therefore, the bill became due, and the last day of grace was the 3d of May, and yet the protest for not payment was not taken till the 5th.

To which it was answered, That the desender sustained no damage from the omission to protest sooner, because Morison, the acceptor, had become bankrupt on the 25th April, several days before the day of payment, which was notified by the London Gazette, and, in so much known to Mr Hogg, that he advised his correspondent to take up the bill supra protest for his honour. And though it may be true that the person against whom recourse is Sought, is not bound to instruct damage from an undue negotiation; yet here it is instructed he could have none, which is a different case.

It was notwithstanding found, “That no recourse lay, the bill not having been protested in due time,” on the following grounds:

That, as there was one post lost in protesting and notifying the dishonour, some effects of the acceptor's may, in that time, have been discovered in Scotland which the defender might have got himself possessed of. 2dly, That were the defender found liable as indorse, he would have his recourse against the drawer; and it is a damage to be subject to the same litigation over again with him, whether the bill not protested affords recourse. And 3tio, As the defender cannot be certain, but that the drawer, who is no party to the present question, may qualify an actual damage, he cannot be obliged to submit to that uncertainity.

N.B. Though it be a good reply to a drawer objecting undue negotiation—That he had no effects in the person's hands on whom he drew; yet it is no good reply to an indorser, who is not supposed to have any effects in the hands of the person on whom the bill is drawn.

Fol. Dic. v. 3. p. 84. Kilkerran, (Bill of Exchange.) No 16. p. 81. *** D. Falconer reports the same case:

James Morison, merchant in Aberbeen, drew for L. 50 Sterling, 16th March 1745, upon his son Thomas Morison, merchant in London, payable forty-five days after date, to William Hogg, merchant in Edinburg; which came by indorsation into the person of Thomas Langley, merchant in London, and was protested by him, 5th May, for not payment, and action for recourse raised against Mr Hogg.

Defence: No due negotiation.

Reply: No prejudice, in respect Thomas Morison was notourly bankrupt before the day of payment, as appeared by an advertisement in the London Gazette 25th April, of a commission of bankrupt being taken out against him.

The Lord Ordinary, 22d January 1745, ‘found, That the bill not having been protested in due time, there could be no recourse against the indorser; and that he was not bound to instruct that he sustained damage by not protesting: And further found, that there was an apparent damage; for that the bill not having been protested, could not be stated before the commission of bankrupt, or classed upon the bankrupt's effects: And further found, there was a damage; in that the indorser, claiming recourse against the drawer, behoved to be subject to the same litigation, whether the bill, not having been duly protested, afforded any recourse’.

Pleaded in a reclaiming bill, The pursuer has instructed there was no damage, the acceptor being bankrupt, and no place for any diligence against his effects; and the accepted bill, though not protested, might have been founded on before the commissioners, who met on the 4th of May and 2d of June. The indorser had certainly the same recourse against the drawer, that the indorsee had against him; besides, Mr Hogg being acquainted with the bankruptcy, made answer, that the bill would be taken up either for his honour the drawer's.

Answered, There may have been change in many respects, notwithstanding the acceptor's bankruptcy; one post was lost betwixt the 3d and 5th of May, in which time his effects might have been arrested in Scotland; the indorser's correspondent would have paid it for his honour, but was prevented by its not being protested; and So it was not laid before the commissioners on the 4th, when the debts were to be proved before them. It might at best be a doubtful question betwixt the indorser and drawer, who might be able to qualify damages; and what Mr Hogg wrote of the bill's being to be taken up, was on the supposition of its being duly negotiated.

The Lords adhered.

Act. J. Graham. Alt. Lockhart. Clerk, Justice. D. Falconer, v. 1. No 160. p. 352.