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. II.

Nature of a Bill.

David Gibson
v.
James Campbell

Date: 27 November 1753
Case No. No 11.

A person accepted a bill subjoining the words “as cautioner.” Being pursued, he objected, that a cautionary obligation could not be constituted by bill. The objection repelled.

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David Gibson, merchant in Inverary, signed, as drawer, a bill addressed in the following terms:

“To Archibald Campbell tacksman of Succoth principal, and James Campbell of Rashoily cautioner, conjunctly and severally.”

Both these persons accepted; but Archibald subjoined principal, and James cautioner to his acceptance. Archibald, who received the value of the bill, became bankrupt; and Gibson pursued James Campbell for payment.

James Campbell judicially acknowledged, that both the bill and its address were written by himself; and that he had agreed to become surety for the sum contained in the bill: he contended, nevertheless, that he was not liable in payment; for that a cautionary obligation may not be constituted in form of a bill: and he pleaded, that the law holds bills, when used as the vehicles of commerce, to be equal to ready money, and therefore exempts them from the solemnities requisite in other probative writings: in them the subscription of the party constitutes the obligation, and renders them probative; but whenever they deviate from their proper form, their nature is understood to be changed; they cease to be bills, and are deprived of these extraordinary privileges. According to these principles, the writing, on which this action is brought, cannot be considered as a bill; for that a bill presumes value received by the acceptor: now this cannot be applied to a cautioner, who receives not value himself, but becomes bound for the debt of another person. If a cautionary obligation could be constituted by a bill, the principal would be bound to relieve the cautioner, and the cautioner would have the benefit of the septennial prescription; and these things are equally inconsistent with the nature, and foreign to the purpose, of bills: neither is the case altered by these words conjunctly and severally, which are added to the address: it is the acceptance, not the address, which constitutes the obligation; the term cautioner qualifies the acceptance; and as the pursuer founds on this writing, he must found on it with all its qualities.

Answered for the pursuer, The question is not, whether the defender became cautioner by his acceptance of the bill? but whether his qualified acceptance as cautioner be sufficient to withdraw him from that obligation to which his simple acceptance would, in terms of the address, have subjected him? The bill is drawn on him and his co-obligant Archibald Campbell, conjunctly and severally: they both accept: they are therefore conjunctly and severally liable; more especially as the underwriting of a bill, in what form soever, is, by the custom of merchants, held sufficient to bind the underwriter. But although it should appear, that in fact the defender meant not to be bound as co-obligant, and that in law he cannot be bound as cautioner, yet must he still be liable. It appears from his own judicial acknowledgement, that he agreed to become cautioner for the sum in the bill; and as he thereby induced the pursuer to rely on his security, and to advance the money, he will not in equity be permitted, under the pretext of legal nullities, to render his engagements ineffectual.

The Lords repelled the objections against payment of the bill.

Act. J. Erskins. Alt. A. Lookhart. Clerk, Gibson. Fol. Dic. v. 3. p. 74. Fac. Col. No 93. p. 141.