Conseqences, where a Person Subscribes a Bill for behoof of another.
Thomas Connel v. Hugh M'Lelland
Date: 5 July 1782 Case No. No 76.
Found, that a person drawing a bill in his own name, for behoof of another, without mentioning his character of factor, is presumed to have interposed his credit for his constituent, and must be personally liable.
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M'Lelland, in the line of his profession as a mercantile factor, having purchased from Connel at Glasgow, upon the commission of John Learmonth at Leith, a quantity of mahogany, he gave to Connel the following draught on Learmonth:
“Three months after date, pay to Mr Connel, or order, at the house of Sir William Forbes, James Hunter, & Company, bankers, Edinburgh, L. 260: 13: 7 Sterling, value received. (Signed) Hugh M'Lelland: And addressed, To Mr John Learmonth, merchant, Leith.”
Mr Learmonth accepted this bill; but, before the time of payment, having failed in his credit, Connel used diligence against M'Lelland the drawer; who, in a process of suspension,
Pleaded: In this transaction M'Lelland has no proper concern; he acted merely factorio nomine for Learmonth, by whom was received that value for which the bill in question was granted, to whose sole credit the charger trusted, and upon whom only, according to the res gesta, and the sense of all parties, an obligation for payment of it could lie. The bill is therefore to be understood and interpreted agreeably to these circumstances, known and transacted on by the charger himself. Bona fides, it is true, or ignorance of the res vere gesta, might have entitled an indorsee of Connel to claim on this bill. But Connel himself, the original party, can plead no such bona fides, no such ignorance, no deception against which he is to be protected. He is therefore equally bound by the undoubted or confessed terms of his own covenant, whether these do or do not appear on the face of the bill. In short, this bill in his hands is not to be raised, by special privileges, above exceptions, founded in the very transaction of which itself is in part a voucher.
Answered: That M'Lelland meant to interpose his credit for Learmonth, is proved præsumptione juris et de jure, by his becoming drawer of the bill. A contrary idea would render narrow the broad basis of bills, so necessary for the aid and the support of commerce.
The Court were much moved by this last consideration; and thus had little difficulty in adhering to the interlocutor of the Lord Ordinary, by which it was found, ‘That though it appeared that M'Lelland purchased the mahogany not for himself, but on account of Learmonth; and though it be true, that a factor purchasing goods in the name of another, is not himself liable for the value of them; yet, as in this case M'Lellan thought proper to give his own security to the seller, by signing a bill as drawer, instead of letting the seller draw a bill himself upon the buyer, he thereby became liable for the price.’
Lord Ordinary, Monboddo.Act. Sir J. Ramsay.Alt. Mat. Ross.Clerk, Robertson.
Fol. Dic. v. 3. p. 78. Fac. Col. No 50. p. 79.
