Scottish Court of Session Decisions

This was a suspension by John Alexander, Arnhill, by Huntly, complaining that he had been charged at the instance of John Stuart, Mill of Crannabo, Marnoch, to pay £35 under an alleged bill, dated 20th June 1876, by the complainer and William Roger, residing in Huntly, payable four months after date, but under deduction of £18, 6s. 6d. paid to account on 20th Oct. 1876. Alexander averred that Roger was a mutual friend of himself and the charger. He had fallen into embarrassed circumstances, and in the month of June last, at the suggestion and solicitation of the charger, the complainer was induced to accept of the bill charged on, along with Roger, on the understanding and agreement that it was to be drawn by the charger and indorsed and cashed by him at the Aberdeen Town and County Bank, at its branch in Banff, and that the charger was to hand the contents of the bill to Roger for his own use, under deduction of a sum of £5 to be paid out of it to account of a debt due by Roger to the charger. This was done because the Bank would not discount the bill in the names of the charger and Roger alone. It was part of the said agreement that, although the charger was the drawer and indorser of the bill, he should have no right of relief against the complainer as one of the acceptors, except to the extent of one-half of any sum which Roger might be unable to pay. Upon this agreement alone the complainer accepted the bill charged on, and delivered it to the charger for the purpose of being discounted. He received no value for the bill. The charger discounted the bill, but failed to implement the agreement under which it was accepted by the complainer and Roger. The respondent fraudulently, and in breach of that agreement, applied the whole of the money to his own uses and for his own purposes, and fraudulently failed to give to the acceptor Roger any part of the sum. The bill became due on the 23d October 1876. On the 20th of that month Mr James Forbes, solicitor of the charger, wrote to the complainer a letter, in which he demanded immediate payment of £16, 13s. 6d., alleged to be due by the complainer and Roger to the charger on the bill in question. In that letter the charger's solicitor stated that the £16, 13s. 6d. was the amount of a bill for £14, 5s., with interest payable on the same since 20th May 1873, which was accepted by Roger to the charger, and in respect of which the charger's solicitor stated that the bill for £35, being the one charged on, was granted. On receipt of this letter the respondent's solicitor wrote to the charger's agent stating the agreement under which the complainer was a party to the bill as above set forth. To this letter the complainer's agent received no reply. Until receipt of the letter of 20th October the complainer did not know of the existence of the bill for £14, 5s. The complainer would not have accepted the bill charged on had he known that it was to be applied to the payment of a former bill.

The respondent, on the other hand, averred that on 23d January 1873 he drew a bill upon Roger for £14, 5s., payable four months after date. This bill was duly accepted by Roger, and was for value had and received by Roger from the respondent. After the said bill had become due, or about that time, the respondent learned that Roger had been putting away or had put away his effects in favour of his mother and brother, and that he was not able to pay the said bill, and in point of fact he did not pay it. The respondent frequently pressed Roger for payment of the said bill, and ultimately threatened him with personal diligence, and the result was that at a market held at Keith on 14th June 1876 Roger offered the respondent, on condition that he should not do diligence against him in the meantime, a bill at four months by the complainer in favour of an unnamed acceptor. The bill had £35 in the corner, and was signed by the complainer. The respondent, it was proposed by Roger, was to retain the bill for £14, 5s. This offer was considered by the respondent, and the result was that he agreed to take the £35 bill, with the complainer as acceptor, only on the conditions (1) that Roger should also be an acceptor; (2) that he should retain the £14, 5s. bill until the £35 bill was paid; (3) that he should discount the £35 bill and have the use of the money in the meantime; and (4) that on the £14, 5s. bill with interest being paid, he should hand over the £25 bill. In point of fact, the £35 bill was a collateral security for the £14, 5s. bill, and was granted by the complainer and received by the respondent only on that footing. The complainer was present and agreed to all those conditions. The £35 bill was granted for that sum by Roger and the complainer, who was really Roger's cautioner, to induce the respondent to postpone diligence against Roger, and in consequence of its being granted he did postpone such diligence. The £35 bill was protested against the complainer for the sum in the bill for £35, under deduction, as the protest bears, of “£18, 6s. 6d. sterling,” being the difference between the said bills for £14, 5s., with interest thereon, and the £35 bill. That difference has been paid by the respondent to the bankers who discounted the £35 bill, but neither Roger nor the complainer has made any payment to account of either of the bills. The charge sought to be suspended was given for payment of the said sum of £35, less the said sum of £18, 6s. 6d.

The Lord Ordinary refused the note, and the suspender reclaimed.

Argued for him—The suspender is entitled to a proof pro ut de jure of his averments. A relevant case of fraud is alleged. In Anderson v. Lorimer, 21st November 1857, 20 D. 74, a proof was allowed of the averment that a bill had been signed blank on the understanding that it was to

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be filled up for a sum much less than the amount it bore. The fraud was not in the inception of the bill, but in the misappropriation of the money. In Steele v. Bridge, 13th July 1872, 9 Scot. Law Rep. 573, a proof at large was allowed of an averment of a simulated transfer of a bill.

Argued for respondent—In Brock v. Newlands, 11th Nov. 1863, 2 Macph. 71, it was held that the admission that a bill had been to a certain extent granted without value did not deprive the charger of the usual privileges and presumption to the extent to which he maintained the onerosity of the bill. This was followed in Mercer v. Livingstone, 21st December 1864, 3 Macph. 300.

At advising—