Scottish Court of Session Decisions

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Cite as: [1834] CA 13_193

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SCOTTISH_Shaw_Court_of_Session

Page: 193↓

Rust

v.

Brand No. 64.

Court of Session

2d Division. F

Dec. 12 1834

Ld. Medwyn, Lord Justice-Clerk

William Rust and Cautioners, Suspenders.— Thomson. John Brand, Charger.— Sol. Gen. Skene— Munro.

Subject_Bill of Exchange.—

The holder of a bill having deponed, on a reference to oath, that he had received it as factor and agent from an employer to discount for his behoof, and place the proceeds to his credit—that he discounted it accordingly, and placed the proceeds to the credit of his employer—that when it fell due, be retired it with his own funds—and his employer being then considerably in his debt, that he considered himself to be an onerous bona fide holder:—Held that he was not entitled to the character of an onerous indorsee.

The charger Brand, writer in Stonehaven, was the holder of a bill for £100, dated 1st October, 1822, and accepted by the suspender Rust, a farmer, to one Trail, by whom it had been blank indorsed. Brand had discounted it with the Bank of Scotland, by whom it had been protested for non-payment; and thereafter Brand had retired it, and he now charged Rust, the acceptor, for the amount, with interest, under deduction of certain partial payments. Rust thereupon brought a suspension, on the allegation that he had accepted the bill to Trail without value, for the purpose of being placed in the hands of Mr Farquharson of Finzean, as a back security to him for an obligation in a cash credit which he had agreed to come under in favour of Trail, but which agreement he never fulfilled—that the bill had been delivered by Trail to Farquharson blank indorsed for this purpose—that Farquharson handed it to Brand, who was his factor and agent, without indorsing it, and without value, but simply in his character of agent—that Brand had discounted it with the Bank of Scotland for Farquharson's behoof, and had in like manner retired it as his agent, and so was liable to the objections above mentioned pleadable against Farquharson. Brand, besides denying the statements on which the objections as against Farquharson were rested, contended that he was an onerous bona fide holder who could not be affected thereby; and he also founded on a letter of 17th March, 1829, alleged to have been written by Rust, promising to pay the bill. This letter, however, was denied by Rust; and with reference to the plea of Brand being a bona fide onerous indorsee, Rust referred to the oath of Brand, who emitted the following deposition:—

“Depones, That in the autumn of the year 1822, or winter of that year, the deponent, who at that time was factor and agent for Archibald Farquharson, Esq. of Finzean, happened to be at Blackhall, where Mr Farquharson then resided, on which occasion Mr Farquharson delivered to the deponent the bill charged upon, along with several other bills, in order that the deponent might get them discounted, and place the amount to the credit of Mr Farquharson's account: That the said bill, when so received by the deponent, was blank indorsed by the drawer, George Trail, and Mr Farquharson did not put his name upon it as an indorser: That the deponent did accordingly, soon after, discount said bill at the office of the Bank of Scotland, in Aberdeen, and placed the net proceeds to Mr Farquharson's credit, in account with the deponent: That, at the time Mr Farquharson delivered said bill to the deponent, he stated that the said George Trail owed him a considerable sum for wood, which he had purchased from him, Mr Farquharson, and that Trail intended to purchase more wood from him, and also wished that he, Mr Farquharson, should become security for him for a cash-credit, which he, Trail, was desirous to obtain; but Mr Farquharson did not say to the deponent that he had agreed to become cautioner for Trail to the bank, or that he had received the bill in question from Trail on that condition; and the deponent's impression, from what Mr Farquharson stated, was, that he, Mr Farquharson, had got the said bill from Trail, in security of what Trail owed him for wood, which the deponent was aware amounted at that time to about £200, for which Mr Farquharson held no security prior to receiving the said bill from Trail. Depones, That when the said bill fell due, it was not retired, either by the acceptor, or by the drawer and indorser, Trail, and was in consequence protested at the instance of the bank, and the deponent thereafter retired and took up the same. Depones, That he paid the said bill with his own funds, and not from any money impressed in his hands for that purpose by Mr Farquharson: That he placed the amount so paid by him to Mr Farquharson's debit in account with the deponent; but as Mr Farquharson was at that period indebted to the deponent in several hundred pounds, and as the deponent retired the said bill out of his own funds, as already stated, he conceives himself to be an onerous bona fide holder thereof, having never received payment from Mr Farquharson of any part of the contents of said bill: That the only payments which the deponent has received to account of said bill, arc those marked on the back thereof, which he received from the suspender, amounting in whole to £20. Depones, That Mr Farquharson, when he delivered the said bill to the deponent, did not say any thing in regard to the suspender's having got value for it or not from George Trail, and the deponent being entirely unacquainted with the transactions between Trail and the suspender, cannot say whether the suspender had or had not got value from Trail for the said bill. Depones, That after the suspender had got a charge of payment at the deponent's instance on the said bill, he on one occasion called on the deponent and Mr Farquharson at the Lemon Tree tavern, in Aberdeen, and told his own story respecting the said bill, but Mr Farquharson did not, either then or at any other time in the deponent's hearing, admit that he had got the said bill from Trail without value, or on condition of his becoming cautioner for Trail to the bank. Depones, That Mr Farquharson was solvent in his circumstances at the time the deponent acquired right to said bill, and continued to be so till the cud of the year 1826, when he became insolvent. Depones, That he never agreed to accept of £20, or any other sum less than the contents of the said bill, in fall thereof; That, in conformity with instructions from Mr Farquharson, he at one time wrote to the suspender, stating that Mr Farquharson would accept of £50 in full of the said bill, provided the money was paid within a limited time, but which the suspender failed to fulfil, and which offer consequently fell to the ground: That, at the time the said offer was made, Mr Farquharson was solvent, but the deponent never, on his own account, as in right of the said bill, agreed to take a composition or modified payment from the suspender in full of the contents thereof; and, on the contrary, he received and holds a letter from the suspender, dated in 1829, in answer to a demand made upon him by the deponent for full payment, or a payment to account of the full balance remaining due upon the bill, promising that he, the suspender, would pay up the said bill in the course of the said year. Depones, in answer to a question put by the commissioner to the deponent, upon the suggestion of his agent, that Mr Farquharson, at the date of his failure, was indebted to the deponent to the extent of nearly £3000, and still continues to be so.”

On considering this deposition, the Lord Ordinary pronounced the following interlocutor, adding the subjoined note. ^*

_________________ Footnote _________________

^* “The suspender has not admitted the letter of 17th March to have been written by him, or by his authority. It is a very improbable denial, but in the mean time it must be assumed to be as he has stated it, though it will be competent to disprove it afterwards. The Lord Ordinary did expect that it would be admitted, and thought this might obviate the necessity of considering whether the charger is entitled to the privileges of a bona fide onerous indorsee. The statement on this point is, that he received this bill with others from Finzean, to get them discounted, and to place the amount to the credit of his account; that he did discount this bill with the Aberdeen bank, and credited Finzean's account with the proceeds. That the bill was not retired from the bank by the parties to it, and on its being protested by the bank, the charger retired it with his own funds, and placed the amount so paid by him to Finzean's debit, in account with him; ‘but as Mr Farquharson was at that period indebted to the deponent in several hundred pounds, and as the deponent retired the said bill out of his own funds, he conceives himself to be an onerous bona fide holder thereof, having never received payment from Mr Farquharson of any part of the contents of said bill.’ Now, the Lord Ordinary does not draw the same conclusion in point of law from the premises so distinctly stated by the charger. He gave no value for the bill originally to Finzean, and when he retired it from the bank he only paid back the money he had originally received from the bank when he discounted it. If he had deponed that having got it discounted, he paid over the amount to Finzean, or perhaps even allowed him an additional credit in his account, the case probably would have been different. But he does not state this; so that, upon the whole, the Lord Ordinary can only look upon the charger as Finzean's agent in the transaction, as to retiring the bill, as he unquestionably was in his discounting it, and that he must be liable to all objections which the suspender could relevantly state, if Finzean was himself pursuing on this bill.”

“Finds, That the charger is not entitled to the character of an onerous indorsee of the bill claimed, and appoints the cause to be called, that the objections stated by the suspender against his liability for the same may be put into a course for trial and decision.”

Brand reclaimed; and Rust having in the mean while been sequestrated, appearance was made for his cautioners in the suspension.

Lord Justice-Clerk.—The facts deponed to in the oath lead directly to the conclusion of the Lord Ordinary, and I am therefore for adhering to his Lordship's interlocutor.

The other Judges concurring—

The Court adhered.

Solicitors: James M'Cook, W.S.— J. H. Burnett, W.S.—Agents.

SS 13 SS 193 1834