Scottish Court of Session Decisions

Subject_1 BONA ET MALA FIDES.
Subject_2 SECT. II.

Private Knowledge of a Prior Right.

M'Aul
v.
Logan

1728. June.
Case No. No 9.

An onerous indorsee, who knew, when he received the indorsation, that the sum had been arrested before the drawer's name was filled up, was obliged to give way to the arrestment.

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In a competition between Archibald M'Aul in Killoside, and Hugh Logan in Littlecreoch, M'Aul arrester, was preferred to Logan an indorsee; because, “it consisted with the indorsee's knowledge, that the arrestment was laid on before the signing of the bill by the drawer.”

At the time the indorsation was taken, the indorsee, knowing of the arrestment, saw that the bill was not signed by the drawer, but then got him to add his subscription.

In a petition for the indorsee, it was argued, That there is no law or custom enjoining the drawer of a bill to sign at the time of acceptance, otherwise the bill shall be null. Neither can such consequence be founded on the reason of the thing, or the nature of the contract. It is the acceptance which constitutes the transaction. There is no obligation imposed on the drawer. A bill is not a contract between the drawer and the acceptor. If it be a contract at all, it is ab una parte tantum obligatorius, as mutuum or stipulatio in the civil law. In the case of a draught, the drawer often pays without at all subscribing. In that case, it may be the drawer who is the debtor, and the drawer will have recourse on him, although there is the name of but one of the parties on the bill. If the debtor in a bill sign it, it is good, whether he be drawer or acceptor. In this case, however, the drawer's name is in the body of the bill which ought to be held sufficient.

This bill is holograph, which does away any argument founded on the risk of forgery. In the case of the Kirk of Bogrie,* a bill was reduced accepted while blank in the drawer's name, not simply because it wanted the drawer's name, but because it fell under the act of Parliament against blank writs.

The drawer of the bill in question, by not having signed it, has transgressed no law. And the indorsee's knowledge, that there was an arrestment upon a

* Examine General List of Names.

bill, which sua natura is not arrestable, could hot put him in mala fides to take the indorsation for payment of a just debt. If the bill be found null, the consequence would be injurious to commerce. Many creditors on bills cannot write. In a case, Ewart contra Murray,* a bill, blank in the drawer's name, was sustained, where the creditor had put his name to a receipt at the bottom of the bill, for a partial payment. Whence it appears, the want of the drawer's name in its proper place can be supplied aliunde.

Answered: Bills of exchange would be void, as wanting the solemnities of writs required by statutes, if they were not excepted by the custom of merchants. Custom, therefore, must ascertain, whether the subscription of the drawer is requisite or not. As to foreign bills, it is unquestionable that the drawer's subscription is essential. Inland bills were introduced in imitation of foreign bills, therefore must follow the same rule.

A bill is a mandate upon the acceptor to pay; and, when accepted, an obligation on the acceptor to pay to the possessor. There is likewise an obligation on the drawer, viz. to pay to the possessor if the acceptor fail to pay; so the argument in the petition is without foundation.

There may be an obligation upon the person signing a mandate, though the mandatarius do not formally sign it; but the present question is, whether the acceptor can be bound where there is no mandate.

A bill accepted without a drawer is equivalent to a promissory note; which, if not holograph of the obligant, would be null. See 29th January 1708, Arbuthnot against Scot, Forbes, p. 233. voce Promissory Note.

Bank bills, and notes of trading companies, are particularly excepted from act 1696, c. 25. relative to blank writs. The notes of private individuals have not the same privilege.

The case of Ewart against Murray can have no effect on the present question; for though the defect of the drawer's name may be supplied, it does not follow, that, before that defect was supplied, the bill was good. The bill was not good at the date of the arrestment.——The petition was refused.

For Arrester, Chas Areskine. For Indorsee, Jas Cochrane. Fol. Dic. v. 1. p. 105. Session Papers in Advocates' Library.