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.

Sir James Murray, Bart Receiver-General of his Majesty's Customs,
v.
James Grosset, Merchant in London

Date: 16 February 1762
Case No. No 156.

Found in opposition to No 150. p. 1582. that bills indorsed in security require due negotiation.

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Walter Grosset, collector of the customs at Alloa, transmitted to the Receiver-General an acceptance of James Drummond, of 6th November 1747, for L. 205: 6s. desiring, by the letter which inclosed it, that it should “lie as a deposit till applied.” Mr Grosset some time after, before that bill became due, desired Mr. Clephan, the Deputy Receiver-General, to pay a sum which exceeded the sum at the time in his hands belonging to Grosset by L. 92: 3: 9½; consequently he advanced that sum, it might be said, on the faith of Drummond's acceptance not yet due. When this bill became due, Clephan did not protest for non-payment, but allowed it to lie over, without diligence of any kind, or any notification to Grosset for several months. Drummond turned out to be entirely bankrupt; and it was alleged he had been so even before he granted the acceptance. Grosset's indorsation of it, bore “for value, being his Majesty's money;” and Mr Clephan obtained a writ of extent against Drummond's effects, but which produced nothing. In an action in the Court of Session, involving the question of recourse, Clephan pleaded, That holding the bill not for value, but only in security, or as a deposit, he was not bound to strict negotiation; and that, beside, Grosset knew Drummond's situation all the time, and had been verbally informed the bill had not been retired.

Grosset pleaded, That the practice of remitting to the Receiver-General, by bills of exchange, was usual and legitimate; and that Clephan had allowed the bill to lie over, in order to derive advantage by the interest growing on it.

Grosset died during the dependence; and his representative was made a party.

The Court of Session found that Clephan was not liable for the amount of Drummond's bill:——But the case went to appeal; and the House of Lords, 17th March 1763, “Ordered and Adjudged, That the interlocutors complained of in the said appeal be, and the same are, hereby reversed; and it is further ordered, that the respondent is liable to the appellant, as representative of his father deceased, for the sum of L. 205: 6s. lost by the insolvency of James Drummond, the acceptor of the bill of exchange in question in this cause; but is not liable to any interest on account thereof.”

For the Appellant, C. York, Al. Wedderburn. For the Respondent, Thos. Miller, Al. Forrester. Fol. Dic. v. 3. p. 89. Appealed Cases in Advocates' Library.