Scottish Court of Session Decisions

Subject_1 DECISIONS of the LORDS OF COUNCIL AND SESSION. reported by ALEXANDER TAIT, CLERK OF SESSION, one of the reporters for the faculty.
Subject_2 BILL.

M'Kennan
v.
Garrioch

Date: 17 February 1775

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Whether an indorsee to a bill indorsed in security ought to be liable in negotiation has been disputed. Groset, son to the collector at Alloa, had remitted a bill accepted by Drummond to the Receiver-general, inclosed in a letter, bearing, That the bill was to be in his hands as a deposit till the money was paid. The Receiver-general did not follow out the rules of negotiation, and afterwards contended that he was not liable to do so; as the bill was not indorsed to him in payment, but merely as a deposit. The Lords (February 1762,) sustained the defences, and assoilyied; but, upon an appeal, the judgment was reversed; and the Receiver-general found liable for the sum in the bill, (17th March 1763.)

In the above case, Groset against Murray, the reversal proceeded upon these two special points:—first, That the commissioners of the customs, in their instructions, had directed that bills transmitted by the collectors to the Receiver-general, should be negotiated; and that accordingly an officer, with a salary, was appointed for that purpose. Secondly, The Receiver-general, in order to obtain a writ of extent, had deponed, before a Baron of Exchequer, that the bill indorsed was a Government debt, and had thereupon obtained a writ to that purpose.

In the case M'Kennon against Garrioch, 1st February 1775, the point was held as established, viz. that an indorsee in security was not liable in negotiation.

The Lords found, “That a bill drawn on a debtor, payable to a third party, and protested for not-acceptance, is equivalent to an intimated assignation, and preferable to an after arrestment by another creditor.”

Same decision pronounced, 4th March 1778, John Spottiswood, Esq. against M'Neil of Colonsay.

They decided upon the same principles, M'Leod against Crichton, 14th January 1779. In this case, the bill was twice presented to the person, viz. Sir William Forbes and Company, upon whom drawn; first for not-acceptance,—next for not-payment. At the time of the protest for not acceptance, they had no money, in their hands, of the drawer; but, at the time of the protest for not-payment, they had received a bill, payable some short time after. The Lords seemed to hold even the first presentment sufficient to prefer the holder, and that it drew back. Indeed, in this case, there was another circumstance, that the other bill was not drawn upon Sir William Forbes and Company, but only made payable at their house. The Lords held this per se noways equivalent to an assignation.

There seems to be three different kinds of bills; bills for instant value,— bills to account,—bills in security.

Indorsees to the first are onerous indorsees, if value is given; and indorsees to the second are onerous indorsees if value is due; but indorsees to the last are not onerous indorsees,—they are not entitled to the privileges of onerous indorsees, nor are they liable to negotiate.

It has been often doubted, whether an indorsee value in account is an onerous indorsee, and entitled to the privileges of an onerous indorsee; 22d February 1775, Messrs Harris against Crosbie; the Lords found that he was so.