A bill was accepted blank in the drawer's name; and a person, who had no title to it, filled up his own name. The indorser's oath found not competent against the onerous indorsee.
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Thomas Turnbull, merchant in Hawick, obtained a bill indorsed to him for value by Robert Taylor, tobacconist there; drawn by Taylor upon Robert Tudhope, flesher there for L. 20 Sterling, payable twelve months after date.
Tudhope suspended, for that Taylor wanting such a sum, prevailed on him to borrow it from his aunt Jean Taylor, not inclining to let her be acquainted with his straits; that the bill was accepted blank, in the drawer's name, and the money given to Taylor, on his bill to the suspender of the same date; but Jean Taylor having left her bill in her nephew's hands, he had filled up his own name as drawer, and indorsed it for no value truly received: The charger therefore had no title to the security, which really belonged to Jean Taylor; or, if it was carried by the filling up and indorsation, compensation upon Taylor's bill was a competent defence; both on account of the gratuitousness of the indorsation, and that the term of payment being a year after the date, the bill was not entitled to any privileges.
Turnbull condescended, that the cause of the indorsation was for L. 17 Sterling, which Taylor owed him, he being to account for the remainder; and the Lord Ordinary, 17th January 1747, “repelled the reasons of suspension, and found the oath of the indorser could not be received against the charger, an onerous indorsee, so far as concerned the L. 17 Sterling.”
Pleaded, in a reclaiming bill, That the privileges of onerous indorsations were only competent upon bills of exchange, where one drew payable to another in the way of trade; not when a security for money was taken in this shape betwixt two; that it had been made a doubt in this Court, whether inland bills of exchange barred compensation; which was decided, on the advice of merchants, 24th June 1714, Fairholm against Cockburn, infra h. t.; but it surely could not then be supposed bills of this sort would have that effect: This bill was, by its term of payment, designed for a permanent security, not a vehicle of money; and was indorsed for security of a former debt; which made a great difference betwixt this case and an indorsation for value truly paid: Beside, the money belonged to Jean Taylor, as was offered to be proved by Taylor's oath, the best proof that could be got in the circumstances of the case; and was partly evident from the dates, sums, and terms of payment of the two bills; which being the same, they could not have been truly executed between the same parties.
Answered, The charger knew nothing of any transaction between Taylor and his aunt and Tudhope; he took the indorsation for value, as he had condescended, and nothing was more ordinary than indorsations for value in account. Inland bills, under which denomination bills of this sort had always been comprehended, were, by statute, in all respects, made equal to foreign ones; 12th December 1711, Erskine against Thomson, infra h. t.; and 31st January 1699, Stewart against Gordon and Campbell, infra h. t.; and the indorser's oath was not competent against the indorsee.
The Lords adhered.
Act. Veitch.Alt. H. Home.Clerk, Justice.
D. Falconer, v. 1. No 261. p. 353.
*** See This case, as reported by Lord Kilkerran, and by Lord Kames, Div. 2. Sect. 2.
