Scottish Court of Session Decisions

The late Alexander Ure, writer in Glasgow, was law-agent of the defender Easton; various cash and bill transactions taking place between them in the course of their business connexion. In particular, a bill for £61, dated February 16, 1829, and payable four months after date, was drawn by Ure upon and accepted by Easton. It was holograph of Ure, and payable at his “office” or place of business. The bill was indorsed by Ure for value to one M'Hardy, who discounted it with the Bank of Scotland; from whom it was retired by Ure, June 19, 1829. At the date of the bill, the balance appearing against Easton on the account-current between him and Ure amounted to almost the exact sum drawn for, including interest and stamp, Ure's books, although they contained entries nearly of the dates both of the drawing and retiring of the bill, yet contained no entry relative to the sum therein, or to cash-advances of a similar amount. Prior to Ure's death, which happened in November, 1830, no reference was made to this bill, in communications had by him with Easton, as an article of charge against that individual.

In 1833, Mrs Mary Ure, widow and executrix of Ure, raised action against Easton for payment of the balance of the account-current between him and Ure, which was stated to amount to the sum of £175, including the contents of the bill.

With reference to this last article of charge, Easton stated in defence, that the bill had been granted by him “for the accommodation of Ure,” maintaining that it was an inference deduceable from the circumstances connected therewith that the acceptance had been truly so granted, and that Ure merely paid his own debt when he took it up from the discounter.

Mrs Ure answered, that Easton, being the acceptor of the bill, must be presumed to have been the true debtor for its contents, and that, Ure having had to retire it from the discounter, she was now entitled to make the advance by which it was so retired an article of charge against Easton, his allegation, that it was accepted without value, being only susceptible of being proved by the writ or oath of Ure.

The Lord Ordinary, after certain procedure, “remitted to the auditor of Court to tax Mr Ure's business accounts, and, as an accountant, to consider the process, and report.”

The reporter was of opinion, under the circumstances above mentioned, that the bill had been drawn for the value appearing on the account-current between the parties at its date, and that credit ought not to be allowed for the amount.

The Lord Ordinary, thereafter, “approved of the report,” and decerned in terms thereof for the sum of £31, with interest, as the balance due upon the account, finding no expenses due to either party, and adding the subjoined note. ^*

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* “The only subject of argument since the date of the former final interlocutor, was as to the pursuer's right to make the bill for £61, 9s. 7d., accepted by the defender to her late husband, and confessedly retired by the latter, an article of charge in the account pursued for, and the point is not without difficulty.

“The pursuer's view has, no doubt, the recommendation of great clearness and simplicity, being rested entirely on the maxim, that an acceptor must always be held to be the true debtor in a bill; and that this legal presumption can only be overcome by the writ or oath of the drawer, or other holder. One answer to this on the defender's part is, that when a bill is simply discharged and receipted by the holder, it must be presumed that it was retired with the acceptor's money, although advanced by another hand. But the reply seems pretty effectually to exclude this ground of pleading in the present case, viz. that it is admitted by the defender on the record, that the bill here was truly retired with the proper funds of the drawer; and that he (the defender) has rested his case on the precise averment that it was truly granted and discounted entirely for the accommodation of the drawer, and therefore properly retired by him as his own proper debt; and then it is maintained that the fact of its having been granted for his accommodation, can be proved only scripto vel juramento, and that there is no such proof.

“It is this which makes the difficulty of the case, and it is no slight difficulty. But looking to the whole circumstances, the Lord Ordinary is satisfied that the demand is unjust; and thinks, that, without touching on the true rule of law, effect may be given to that conviction. The circumstances are these:

“1st, The pursuer was the defender's law-agent. 2d, At the date of the bill he had an account against him, amounting, with interest and stamp, as the accountant has reported (p. 12, &c.), ‘to almost precisely the sum then drawn for.’ 3d, There is no charge or entry in the pursuer's books relating to this bill, either at its date or retirement, indicating that, by the latter act, a debt to that amount was constituted against the defender, though there are various entries to his debit and his credit at or near both these dates. 4thly, The bill itself is holograph of the drawer, and is made payable at his the drawer's house; thus indicating that it was from him that payment was to be ultimately demanded. It seems settled in England, that this circumstance alone is proof that the acceptance was entirely for the drawer's accommodation. See case of Bailey, 23d January, 1829 (9 Barnwall and Cress well, 44). 5th, There are no traces of a sum at all corresponding to the amount being drawn from the pursuer's cash account, or otherwise advanced from his funds to the defender, cither at the granting or discounting of this bill. 6th, Though he survived for a considerable time, and had various communications with the defender as to the state of his accounts, there is not the slightest reference to this bill as an article of charge against him.

“In these circumstances, the Lord Ordinary must say that he cannot resist the impression that this bill was truly accepted, not, as is now pretended, for any actual or separate advance of money by the drawer at the time, but in reference to the state of his account with the defender, and solely in consideration of the acceptor being then truly indebted to him in that very amount. Nor is this really inconsistent with the averment on the record, that the bill was truly accepted for the drawer's accommodation. For though the sole motive for asking or granting it was the fact that so much was actually due by the defender, it may very well have happened that he told the drawer at the time that he most probably would not be able to retire it when due; and though he could not refuse to enable him to get the interim use of the money, on the credit of his name, he must yet lay his account with retiring it himself when the time was expired. It probably was accepted with some such intimation, or at least with the expectation of a contingent failure of payment on the part of the acceptor. But it is enough for the defender, if there be evidence that it was accepted with reference to the account owing to the drawer, and for no other value than what was in that account.

“Suppose the acceptor had himself retired the bill when due, could the drawer, in the circumstances now stated, have afterwards refused to allow credit for the amount, as payment pro tanto of the account ? In short, when a bill is drawn for a certain sum by one who is at the time a creditor of the acceptor in a current account for that precise sum, and is unable to specify any other value granted for the acceptance, will not the law presume, though it bears only for value received generally, that it was granted for value on that account ? and that after it is paid, the drawer must allow the amount to be put to the credit side of that current account. But the pursuer here is claiming both the full amount of the account, as at the date of the bill, and the amount of the acceptance, as for a separate loan or advance. The Lord Ordinary cannot bring himself to sanction this double demand.

“ As to the rule of law that a bill, being granted for accommodation of the drawer, can only be proved by his writ or oath, it is no doubt a very important and a very salutary rule. But, 1st, The allegation here, when fairly considered, is not strictly that this bill was accepted for accommodation merely, but rather that it was granted, not for any separate advance of money made at the time by the drawer, but with reference to, and in consideration of, the particular value contained in the current account then due to him; and that, though it might have been understood that it probably would not be paid when due by the acceptor, but must then be provided for by the drawer, and so was likely to turn out only a temporary accommodation, and in the end be correctly described as such, yet the real question is, whether the general ‘value received,' which is set forth on its face, is not to be understood and interpreted as if it had been written ' value in account,' so as to bar any claim both for the undiminished amount in that account and for the whole sum in the acceptance?—a question which, it is humbly apprehended, may be legally determined upon the whole facts and circumstances of the case, and does not require a reference to the writ or oath of the pursuer. The Lord Ordinary relies chiefly on this view. But he would observe farther—

“2d, There are authorities which seem to warrant the conclusion that, even in a proper question of accommodation or not accommodation, facts and circumstances may be admitted to prove that the claim of the holder of the document is fraudulent and against conscience; though the Lord Ordinary is aware that the Court is laudably scrupulous about admitting such evidence.

“3d, It would appear that the evidence relied on by the defender is, to so great an extent, evidence under the hand of the drawer himself as to warrant him in maintaining that his case is truly made out by the writ of the party. The account due at the date of the bill, and the coincidence of the amount so due with the sum in the bill, is proved by the drawer's own books, and by entries in his own handwriting; and the whole of the inferences on which the accountant relies for the conclusions, in which the Lord Ordinary concurs, are deduced from the state of his accounts, correspondence, and other writings. Though there is no express admission, therefore, that the acceptance was truly for his accommodation, yet, if this be the necessary inference from the documents recovered under his hand, the rule of law may well be held to be satisfied.

“No expenses are given, because the defender, who has been found liable in a certain balance, continued to the very last to deny that he owed any thing; and because the pursuer has failed as to five-sixths of her demand, and upon most of the disputed points in the litigation.”

Mrs Ure reclaimed, contending that Easton having on the record stated the bill to have been granted purely for the accommodation of Ure, was barred from now founding on the explanation suggested by the accountant that it was granted with reference to the state of accounts between the parties. Easton also reclaimed, in so far as he had not been found entitled to expenses.