Scottish Court of Session Decisions

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Cite as: [1886] ScotLR 23_306, [1886] SLR 23_306

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SCOTTISH_SLR_Court_of_Session

Page: 306↓

Court of Session Inner House Second Division.

[Sheriff of the Lothians.

Tuesday, January 19. 1886.

23 SLR 306

Byers

v.

Lindsay.

Subject_1Bills of Exchange
Subject_2Proof of “No Value”
Subject_3Bills of Exchange Act 1882 (45 and 46 Vict. c. 61), sec. 30
Subject_4Presumption of Value in Hands of Onerous Holder.
Facts:

Circumstances in which held that the acceptor of a bill which had been dishonoured had failed in an action at the instance of the holder to displace the presumption raised by the 30th section of the Bills of Exchange Act 1882, that “every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value.”

Headnote:

Peter Byers, a farmer at Longford, West Calder, raised this action for payment of £85, which he alleged was due to him by David Lindsay, residing at Whitburn, on a bill drawn by William Alexander, cattle dealer, and accepted by the defender, and of which he alleged he was onerous indorsee and holder, and which had been dishonoured by the defender. The defence was—(1) that the pursuer was not an onerous holder of the bill; (2) that the bill was not granted or indorsed for value, and that the pursuer was informed of this both by the drawer (Alexander) and the defender, the acceptor, before he got possession of it.

The Sheriff-Substitute ( Melville) allowed the defender a proof of his averments.

The proof was largely directed to the question whether the defender, as he deponed, had accepted the bill for Alexander's accommodation, and while the evidence was somewhat conflicting, it appeared that the pursuer and Alexander had had many previous bill transactions; that the latter
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owed him £600 at the date of the bill; that the bill had been regarded at the bank as one for value by the agent of the Commercial Bank, who deponed—“Alexander, in exchanging Lindsay's bill for Walker's (a bill for £100 drawn by Alexander on Walker), stated that Lindsay was owing him £85 for cows. He did not say the £85 bill was an accommodation one.”

The Sheriff-Substitute pronounced this interlocutor—“Finds it proved that the bill in question was granted by the defender for the accommodation of the pursuer and William Alexander, and that no value was given for it to the defender: Therefore finds the defender is not liable for the sum sued: Assoilzies the defender,” &c.

On appeal the Sheriff ( Davidson) affirmed this judgment.

The pursuer appealed, and argued—While under the 100th section of the Bills of Exchange Act 1882 (45 and 46 Vict. c. 61) it was competent for the defender to lead parole evidence of his averments in defence, the 30th section of that Act provided that “(X) Every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value.” The onus of displacing this presumption lay upon the defender, and on a consideration of the proof, he had completely failed to discharge it by proving that the bill was merely an accommodation one.

The defender replied—(1) On the merits it was clearly proved that the bill was not granted for value; (2) where from defect of consideration the original payee could not recover on a bill, it fell upon the indorsee to show that it was for value— Heath v. Sansom and Evans, April 27, 1831, 2 Barnewall and Adolphus’ Rep. 291.

Judgment:

At advising—

Lord Justice-Clerk—This case is interesting in so far as it may raise questions under the Act of 1882, but as regards the particular factshere I have no doubt whatever. I am unable to agree with the Sheriff-Substitute. The pursuer was prima facie an onerous indorsee, and I have heard nothing to displace him from that position. The Act of 1882 no doubt warranted the Sheriff-Substitute in allowing the defender, the acceptor, to prove prout de jure that the bill was for accommodation in the hands of the indorsee. But the proof has entirely failed in this respect. There is a presumption raised by the 30th section of the statute that the holder of abill in due course is to beheld prima facie as a holder for value. Has this presumption been displaced? Alexander, the indorser, is clearly under the impression that Byers was his creditor, and I think it is clear that Alexander was his debtor to the extent of at least £600. In my opinion, then, the presumption remains. Latterly, I think the contention was given up by Mr Rhind that although the bill was not for accommodation between the indorser and indorsee, still it was for accommodation between the drawer and indorser. There was no ground for this contention in the statute. On the whole matter, then, I am of opinion that though it was competent for the defender to prove that the bill was granted by Alexander to Byers as an accommodation, he has completely failed to do so. I am of opinion, then, that the judgment appealed against must be altered.

Lord Carighill—I concur. The action is raised by Byers against Lindsay for the sum of £85 said to be due by bill drawn by Alexander upon the defender and endorsed to Byers. The pursuer says that he is an onerous holder, and he asks decree for the sum. There are two defences set forth—1st, that the pursuer is not an onerous holder, and 2nd, that the bill was accepted for the accommodation of Alexander, the drawer. There is no doubt that the Sheriff-Substitute took the right course, having reference to the Act of 1882, when he pronounced the interlocutor allowing the defender a proof of the averments made in his defences. The burden of proof was clearly on the defender to show that the pursuer was not an onerous holder. The pursuer was not called upon to prove that he was a holder for value. It appears to me that the defender has not proved that which it was necessary for him to establish. He has not disproved that the pursuer was an onerous holder. The evidence is not very clear on the question whether Lindsay was an acceptor solely for Alexander's accommodation. But it is unnecessary to go into that question, because the pursuer was an onerous holder and is therefore entitled to decree.

Lord Rutherfrud Clark conourred.

Lord Young was absent.

The Court pronounced this interlocutor:—

“Find that the defender has failed to prove that the pursuer is not the onerous indorsee and holder of the bill libelled: Therefore sustain the appeal; recal the judgment of the Sheriff-Substitute and of the Sheriff appealed against; ordain the defender to make payment to the pursuer of the sum of £85.”

Counsel:

Counsel for Pursuer— A. J. Young— Orr. Agents— Irons, Roberts, & Lewis, S.S.C.

Counsel for Defender— Rhind. Agent— Hugh Martin, S.S.C.
1886