Page: 901↓
Subject_Partnership — Bill of Exchange, —
Circumstances in which held that a debt by bill subscribed by a company firm, was the private debt of a partner, and not the debt of the company.
John Blair and William Morrison carried on business in Glasgow as calenderers, under the firm of “Blair and Morrison.” Blair died in 1814. Previous to 1823, his son, Robert Blair, became a partner with Morrison in the concern, which continued to retain its original firm. The company was in existence in March, 1823. Some months after this, Morrison died insolvent; and, in the course of a short time, Robert Blair also died.
In 1830, an action was raised before the Magistrates of Glasgow, by the respondent, William Bryson, manufacturer there, against the advocators' representatives, some of them of John Blair, and others of Robert Blair, founded on a bill for £200, dated 12th March, 1823, and payable at four months, apparently drawn by “Blair and Morrison,” upon the respondent, and accepted by him. Bryson likewise founded on and produced the following letter, of the same date:—
“To Mr William Bryson.
“Sir,—We acknowledge to have received from you your acceptance for £200, at four months, of this date, for which you have received no
(Signed) “ Blair and Morrison.”
The action concluded for payment of the £200 in the bill. The advocators having denied that the debt was a company debt, or one for which either John Blair or Robert Blair was liable, the Magistrates allowed a proof; from which it appeared that the subscription of the firm of Blair and Morrison on the bill, and relative letter were not in the handwriting of Robert Blair; that in the company books of Blair and Morrison there was no entry regarding the bill, although there was an account with Bryson coming down to May, 1823, but in a private book kept by Morrison, there was such an entry; that between Bryson and Morrison, in his individual capacity, there had been many similar bill transactions; and that, upon Morrison's death, Bryson ranked as a creditor upon his individual estate.
The Magistrates, on advising the proof, found the libel sufficiently instructed, upon which Mrs Blair, &c. advocated, and pleaded, inter alia, that this was a private transaction between the respondent and Morrison; that the letter was not genuine; and, as the bill in question was payable in July, 1823, and the claim was not made till 1830, after all the parties who could throw light on the transaction were dead, the presumption was for payment having been made by the proper debtors on the bill.
Bryson, on the other hand, maintained, that unless it could be shown that this was a fraudulent transaction, the bill and relative letter formed good documents of debt; that it was from no fault of the respondent that the bill was not entered in the company books; and the fact of its being entered in the private book of a partner was not probatio probata against him.
The Lord Ordinary pronounced this interlocutor, adding the note subjoined:
*—“Finds, that in so far as the summons concludes against certain
_________________ Footnote _________________
* “The bill of exchange referred to bears the acceptance of the pursuer, ‘Blair and Morrison’ being the drawers. The pursuer, therefore, never took that as a proper ground of debt against the company. He was himself the proper debtor in it, and of course knew that any claim arising to him in consequence of the transaction must be entirely out of the ordinary course of dealing, and not at all on the negotiable instrument. His action must rest on the letter of obligation. That letter is not holograph even of Morrison, and not tested. Taking it, however, to be admissible, as in re mercatoria, the question is, Whether, in the circumstances proved, it will bind Robert Blair's representatives?
“It must be observed that this action was not brought till February, 1830, nearly seven years after the bill became due, and long after William Morrison, Robert Blair, and every one said to be connected with it, except the pursuer, were dead. There is, therefore, even on the face of it, a strong presumption against the justice of the claim, and great allowance to be made for the difficulties in which the parties here called as defenders are placed.
“Then, what are the facts upon the proof? Neither the bill nor the obligation is signed by Blair. The subscriptions of the firm must be taken as made by Morrison. But the bill, as drawn by the firm, is no ground of debt against the company, or against Blair as a partner; and the question is, Whether the pursuer, in granting the bill to Morrison, was entitled to rely on the letter of obligation signed by the firm of ‘Blair and Morrison,’ as a good ground of guarantee or relief by the company? Now, it is on the one hand proved, that there is no trace of such a transaction in the books of the company, though there is an account with the pursuer coming down to May, 1823, two months after the date of the bill. Not merely the bill is not mentioned, but the proceeds of it, when discounted, are not brought into the account at all. This might go far to show that in fact it was a private transaction of Morrison. But there is much more; for a private cash, or other book kept by Morrison, was exhibited to the commissioner, and excerpts made from it, which show a long series of bill transactions between Morrison himself and the pursuer, extending from 1817 downwards, in which this very bill, in March, 1823, is entered as the last article. Mr Douglas, the holder of that book, declined to put it into process; but though he also declines exactly to swear that it is a private cash-book of William Morrison, he does swear that ‘he infers that it is, from the character of the entries which it contains, and from sets of entries of bills of various persons there appearing.’ It appears, therefore, that the pursuer had, for a course of years, been engaged in a series of transactions with Morrison individually, specially by bills and counter-bills passing between them; that the bill in question, accepted by the pursuer, was of this description, and was so treated; that neither it nor the proceeds of it, in any form, entered the books of the company; and it has not been shown that it ever was known to Robert Blair previous to the death of Morrison in a state of bankruptcy.
“In these circumstances, the Lord Ordinary is of opinion that it has been very sufficiently proved that the letter of obligation was not granted in the business, or for the behoof of the company; and that the pursuer must have been fully aware at the time that it was not, as indeed he has farther evinced by the delay in bringing the action; and, coming to this conclusion on the facts, he holds the law applicable to them to be clear. See Bell, II., 616, 617, 618, and the cases there referred to.”
Bryson reclaimed.
The Court accordingly adhered.
Solicitors: Campbell and M'Dowall, S.S.C.— William Young, W.S,—Agents.