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. IX.

Acceptance.

Colin Campbell of Carnbeg
v.
James Campbell

Date: 21 November 1781
Case No. No 70.

Acceptance absolute, and cannot be clogged with any condition.

Click here to view a pdf copy of this documet : PDF Copy

Donald Campbell of Balinaby, a captain in the Argyleshire regiment of Highlanders, being ordered upon foreign service, and waiting to embark at Greenock, found himself unable to discharge some pressing demands which were made upon him. James Campbell, however, agreeing to advance the money, Balinaby drew two bills in his favour upon Colin Campbell of Carnbeg, to whom he had already disponed his whole estate, under a power of redemption.

James sent the bills by express to Ilay; where Carnbeg resided, and he, perceiving that his friend's situation would admit of no delay, immediately accepted them; but as he had no effects of the drawer in, his hands, instead of returning them to James, he transmitted them to his own agent at Greenock, with orders not to deliver them, unless Balinaby would agree to give up his power of redemption; and, at any rate, to keep them in his hands till that gentleman should be clear away for America. At the same time, he wrote to James, informing him of what he had done, and referring him to his agent for the conditions of his acceptance.

Balinaby haying absconded before the express returned from Ilay, it became impossible to procure his consent to the terms proposed The bills, however, were forced from Carnbeg's agent by a decree of the sheriff; and being afterwards indorsed by James, the effect of acceptances, so qualified, came to be considered, in a reduction of the Sheriff's decree, brought by Carnbeg, and in an action against him, for payment, at the instance of the indorsee.

Pleaded for Carnbeg: To impose an obligation upon a person without his consent, is adverse to the first principles of justice. Every man is entitled to chuse whether he will oblige himself or not, and is at liberty to adject what conditions he pleases to his obligation.

That a bill, therefore, may be accepted conditionally, is clear; and, among merchants, nothing is more common than such acceptances; Harcarse, p. 36. Postlethwait, voce Acceptance: Law of Bills of Exchange, p. 30, 31. It has been equally well understood, since the point was settled by Lord Hardwicke, in the case of Lumley and Palmer, that a bill may be accepted by letter, or even verbally; and if so, a condition may, in the same way, be adjected to the acceptance.

When the bills in question arrived at Ilay, Carnbeg was under no obligation to accept them; because the subjects disponed to him, under reversion, being already more than exhausted, he had no effects belonging to Balinaby in his hands. His accepting the bills, therefore, was a voluntary act: He was entitled to propose his conditions; and if those conditions were not complied with, he had a right to with-hold his acceptance.

On the other hand, it may be admitted, that James Campbell, the holder of the bills, was not bound to take any but a simple unqualified acceptance; and if the terms proposed were not agreeable to him, he might have held the bills as refused, and protested them for non-acceptance. But this was the farthest he could go; and he was not entitled to avail himself of the acceptance procured from Carnbeg, while, at the same time, he rejected the condition of that acceptance,

Had the parties been present together on this occasion, it is evident that James Campbell must either have taken the acceptance qualified, in the manner proposed, or he must have gone without it; and although circumstances rendered it necessary that Carnbeg should sign the bills as acceptor, before he had an opportunity of knowing whether or not his terms would be agreed to, this makes no difference in the rights of parties, It was incumbent on James to have signified his disapprobation immediately to Carnbeg's agent. In that case, he might at once have got up his bills, upon agreeing to cancel Carnbeg's subscription, which every acceptor is entitled to do before the bill goes out of his possession; Forbes on Bills, c. 5. § 13. Postlethwait, 1. c.; and which ought to have been done here, as the holder was unwilling to take a conditional acceptance.

Answered for the defenders: It is not of smallest consequence, whether Carnbeg had value in his hands or not; for, by accepting the bills, he unquestionably became liable to the onerous holder of them. Carnbeg was, no doubt, at liberty to have accepted the bills, or to have refused them, as he pleased; but he had no right, without the holder's consent, to adject any condition to his acceptance. But, in fact, the bills bear a simple acceptance, unqualified by any restraint, or exception, whatsoever; and such acceptance, being once adhibited to a bill, cannot afterwards be either altered or revoked; Law of Bills of Exchange, p. 35. It was therefore incompetent for Carnbeg, after having accepted the bills in question simply, to qualify his acceptance with the conditions contained in the letter to his agent. It was equally incompetent for James Campbell to have agreed that the acceptance should be cancelled on any account. He had no right to discharge Carnbeg, who, by accepting the bills, constituted himself the proper debtor, and rendered Balinaby's obligation, as drawer, only subsidiary.

But, at any rate, Carnbeg was culpable in retaining the bills, or in directing his agent to keep possession of them, till Balinaby should be gone. He ought to have determined positively, either to honour or to dishonour the draughts. Had he returned them unaccepted, James Campbell might immediately have had recourse against the drawer; and, by with-holding them improperly, Carnbeg became answerable, even although he had not accepted.

Observed on the Bench: The obligation of a bond, already signed, may be qualified before delivery: But the acceptor of a bill is not entitled to retain it an hour, or to adject any condition to his acceptance, without the holder's consent. It is the holder's document of debt against the drawer, and must immediately be returned to him.

The Court adhered to the Lord Ordinary's interlocutor, “repelling the reasons of reduction in the action at Carnbeg's instance, and decorning against him in that, at the instance of the indorsee.”

Lord Ordinary, Alva. Act. Blair & A. Abercromby. Alt. Cullen. Clerks, Tait & Home. Fol. Dic. v. 3. p. 77. Fac. Col. No 5. p. 10.