Scottish Court of Session Decisions

Subject_1 BILL OF EXCHANGE.
Subject_2 DIVISION IV.

Possessor's recourse against the Drawer and Indorser.
Subject_3 SECT. II.

Negotiation of Bill.

Messrs Alexander Brown and Son, Merchants in Edinburgh,
v.
Matthew Crawfurd, Merchant in Glasgow

Date: 13 June 1761
Case No. No 154.

Found, that the negotiation of a promissory note, payable in England, must be regulated by the law of England.

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Mrs Edie of Perth had been in use to furnish Matthew Crawfurd with linen yarn, for which he sometimes paid money, and sometimes sent her bills on Edinburgh or London. In May 1758, he sent her, indorsed, a promissory note of one David Leitch, in the following terms:

“Glasgow, 11th May 1758. Forty-six days after date, I promise to pay to the order of Mr Matthew Crawfurd, the sum of L. 25 Sterling, at the house of Malcolm Hamilton and Company, merchants in London, for value received.”

This note Mrs Edie put into the hands of Messrs Brown the pursuers, who sent it to their correspondent at London, and he did not protest it for not payment till seven days after the days of grace were expired; but immediately thereafter gave notice of the dishonour to the pursuers, who intimated the same in course to Mr Crawfurd.

The pursuers, in right of Mrs Edie, brought a process against Mr Crawfurd for payment of an account due by him to her. He insisted that credit should be given him for the sum contained in this promissory note; because, as is was not duly negotiated, there could be no recourse against him for it.

Pleaded for the pursuers: That the note was properly negotiated, and that all had been done that was incumbent on any person to do, to whom a promissory note drawn in Scotland is indorsed; and as the matter falls to be tried by the law of Scotland, there could be no doubt; because, by that law, no negotiation, properly, is required on promissory notes.

It is indeed true, that, by c. 9. 3tio et 4to Annæ, promissory notes are put on the same footing with inland bills of exchange; but then, it is as true, that only such inland bills are privileged as are drawn in England or Wales; as, therefore, promissory notes can be in no better condition than inland bills, it follows of consequence, that unless they be drawn in England, they have none of the privileges of inland bills; nor is the porreur obliged to use the form of negotiation.

Pleaded for the defender: That as the promissory note is payable in London, so it seems to follow of consequence, that the question of negotiation falls to be judged of by the law of England. Indorsees, in taking indorsations, are tacitly understood to contract, that they will follow the custom of the country where the payment is to be made, in demanding payment, and doing every thing else necessary to entitle them to recourse. But it is very clear, that by the statute of Queen Anne, promissory notes in England require the same negotiation as bills; and it is as clear, that such negotiation was not made in the present case.

The Court was of opinion, that the promissory note was not properly negotiated; and therefore ‘sustained the defence.’

Act. Burnet. Alt. Montgomery. Clerk, Kirkpatrick. Fol. Dic. v. 3. p. 88. Fac. Col. No 32. p. 61.