Subject_1 BILL OF EXCHANGE. Subject_2 DIVISION II.
The Porteur's Action against the Person upon whom the Bill is Drawn.
Subject_3 SECT. II.
Extraordinary Privileges of Bills.
Sir John Erskine of Alva v. William Thomson, Merchant in Leith
Date: 12 December 1711 Case No. No 91.
Separate receipts of partial payments of bills of exchange, do not militate against possessors, to whom these bills are afterwards indorsed.
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William Thomson having accepted a bill drawn upon him by Alexander Colvil of Kincardine, in these terms, “William Thomson pay to me, or my order, against the term of Whitsunday, Lammas, and Martinmas, next to come, 120 pound Scots; and this, without receipt, shall be a sufficient discharge to you of 25 bolls of beer bought and received by you from me, this being but prejudice of any bills formerly accepted by you to me.” Alexander Colvil indorsed this bill to Sir John Erskine, who charged William Thomson for payment. He suspended upon payment made to the indorser before the indorsation, conform to his two receipts: Whereof one bore, Received from William Thomson 100 pound in part of payment, and to account of a greater sum due by him to me.’ And another bore, “Received from William Thomson 20 pound, in part payment of a greater sum retting by him to me, per accepted bills.”
Alleged for the charger: No debt of the indorser of a bill can be a ground of compensation, nor his separate receipts of partial payments a ground of extinction against the possessor, Forbes Treatise on bills of Exchange, p. 163.;* because of the exorbitant trust among traders, whose business requires more dispatch than to allow them time to inquire at the acceptors of bills, (who perhaps are at some hundreds of miles distance from them), whether they had made any partial payment to the creditor since their acceptance. Yea, to sustain separate partial receipts, would open a wide door to much fraud; it being easy for persons to accept bills, and, with the same breath, take private receipts of payment from the possessor, who, being bankrupt, might use them as funds of credit to entangle and cheat honest men. Therefore, no prudent man will pay the whole sum in a bill, without getting up the bill; or pay any part, without getting the partial payment marked upon the back of the bill, or destroying the old bill, and granting a new one for she remainder, 2dly, The receipts produced do not relate particularly to this bill, the tenor whereof bears, that there were other bills, granted by the suspender to the indorser, to which in dubio the payments must be ascribed: Especially considering that the law presumes, That the bill charged on is not paid, from its being still unretired in the creditor's hand. And if the partial payments had been to be imputed in satisfaction thereof, the last of the receipts would not have born ‘in part of payment of a greater sum owing to Kincardine, (as it does) but in full payment of the sum contained in such a bill:’ Since the sums in the two receipts make precisely the total sum in the bill charged for.
Answered for the suspender: Though compensation upon the indorser's debt be not receivable against the possessor of a bill, payment to the indorser is good against any possessor; because payment extinguisheth ipso jure: Whereas compensation takes no effect till it be proponed; seeing Judex non potest vaticinari invicem quid deberi, as the lawyers say.
The Lords seemed to be of opinion, That in the general, separate receipts relative to bills, do not militate against singular possessors. And found, That far less in the present case could the receipts founded on by the suspender be sustained to extinguish the bill in question: Seeing that bill mentions other bills to have been granted by the suspender to the indorser; and the receipts do not expressly relate to the bill charged on. See No 94. p. 1506.
