Of Bills with clauses stipulating Annualrent and Penalty.
Henderson of Gairdie v. Sinclair of Quendal
1727.
December. Case No. No 20.
Bills are sustained, tho' bearing annualrent from the date, and before the term of payment.
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Sinclair of Quendal being debtor for some feu-duties to Henderson of Gairdie, upon the 2d February 1725, accepted a bill for the bygones, payable 1st October thereafter, bearing interest from the date.
Against this bill, an objection of nullity was made; as not being of the proper nature of a bill; because it bore annualrent in gremio, not from the term of payment, but from the date. And it was urged, that bills are stricti juris writs of a certain form and tenor, against which there is no liberty to transgress: But here the clause objected against, is even contrary to the nature of bills; which bear annualrent after the term of payment only, ob moram; but never from the date. And the case was cited betwixt Innes and Flockhart, determined January 1727, (supra,) where a bill was found null, “as bearing annualrent from the term of payment, and a fifth part of the sum as penalty.” And if it be a nullity to stipulate annualrent from the term of payment, much more from the date.
Answered, That it is agreeable both to practice, and the nature of bills; that they contain clauses for annualrent from the date. And now that debts betwixt creditors and debtors are frequently transacted by way of bills; since, by the acceptance, the acceptor acknowledges himself debtor, it is an easy transition, that he also binds himself for annualrent. And were not this sustained, it would go harder with debtors; for instead of giving a long day to pay, this would oblige creditors to draw their bills payable upon fight, in order to bear annualrent. In the decision cited, it was the penalty alone, that prevailed upon the Judges not to sustain the bill; for a penalty is, in every view, contrary to the nature of a bill; the essence of which consists in its being a permutative, and strictly onerous contract: Nor is it a good answer, that penalties are generally restricted to the expence and damage; for this is a stretch ex nobili officio; and if an adjudication were led upon such a bill, the whole penalty would be accumulated: And, therefore, if a bill with a penalty were sustained, there would be the same reason for sustaining a donation by way of bill, or an obligation ad factum præstandum; for they are all equally contrary to the design and nature of bills. That it was the penalty alone, that annulled the bill, will further appear, in that annualrent was only stipulated from the day of payment. Now, whatever be said with respect to a clause of annualrent from the date, it can never do harm to stipulate annualrent from the term of payment, “for whatever follows from the nature of a writ, may surely be expressed in the writ.”
The Lords repelled the objection upon the nullity.’
Fol. Dic v. 1. p. 96. Rem. Dec. v. 1. No 99. p. 192.
