Scottish Court of Session Decisions

On 14th May 1895 Gustav Herman Bartsch, hotel-keeper, Edinburgh, and R. M. Douglas, S.S.C., in consideration of a loan of £250 granted to Bartsch by Poole & Co., corporate accountants, Edinburgh, accepted a bill for £350 drawn by Poole & Co., bearing to be for value received, and payable on demand at the office of Poole & Co. in Edinburgh.

Of the same date, by a writing signed by the acceptors and addressed to the drawers, the following agreement was entered into between the parties:—“Sirs,—We have this day accepted a bill drawn by you upon us for £350, payment of which you have agreed to receive in weekly instalments of ten pounds sterling, commencing on Monday, 27th May 1895, and continuing till the whole be paid up. But in the event of our failing to call upon you and pay said instalments, you are to be entitled to recover from us, at any time thereafter, the whole sum or balance due on the said bill, with the expenses thereof, as if the same were now payable in full.” Sundry further penalties were imposed upon the acceptors by this agreement in the event of such failure.

The instalments of £10 due on 27th May and 3rd June were duly paid; but the instalment falling due on 10th June was not then paid. Accordingly, on 14th June, Poole & Co., after communicating their intention to Bartsch and Douglas by letter, protested the bill. The protest began by reciting the bill, and proceeded—“At Edinburgh, upon the fourteenth day of June, in the year of our Lord, One thousand eight hundred and ninety-five, at request of Poole & Company, corporate accountants, No. 4 North Saint Andrew Street, Edinburgh, drawers and holders of the original bill above copied, I, James Andrews, of the city of Edinburgh, notary-public, presented the said bill at the place where payable to a clerk there, who made answer that no funds had been provided to meet said bill, and payment was refused accordingly. Wherefore I, at request foresaid, do hereby protest the said bill against Gustav Herman Bartsch, 25 Hanover Street, and R. M. Douglas, 5 Annandale Street, all Edinburgh, conjunctly and severally, the acceptors thereof, for non-payment of the contents, and for all interest, damages, and expenses, as accords; but always under deduction of the sum of nineteen pounds, nineteen shillings, sterling, paid to account, before and in presence of John Alexander Robertson, solicitor, Edinburgh, and John Low, clerk to the said Poole & Company, witnesses specially called to the premises. (Signed) Veritas

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vincit, James Andrews, notary-public; 17th June 1895, five pounds further paid to account. (Signed) pro Poole and Company, James Wood.”

The protest was duly recorded in the Sheriff Court books of the county of Edinburgh, and on 20th June a charge was given upon it to Bartsch and Douglas, who immediately presented a note of suspension of the charge. In addition to the main facts above narrated, they averred payments to account of the sum in the bill made by them to Poole & Co. on 17th, 20th, 24th, and 26th June, bringing up the sum paid by them to £50. They further averred, with referenee to the protest—“(Cond. 5.) The said James Andrews did not present said bill, and neither did the pretended witnesses. It was not presented to either of the complainers, or at their dwelling-places or places of business, and payment was never asked by the notary-public, who purports to have protested said bill, from either of said complainers, before protesting it for non-payment. The said Poole & Company knew the addresses of both the complainers, and that they would have paid the bill if it had been presented to them, as the said Poole & Company were bound to do. Said protest is null and void in respect it does not comply with the provisions of section 51, sub-section 7, of the Bills of Exchange Act 1882.”

The complainers pleaded—“(1) Summary diligence on the said bill of exchange being incompetent and illegal, the proceedings complained of ought to be suspended. (2) The said protest being irregular and inept is null and void ab initio, and the proceedings following thereon ought to be suspended. (3) The respondents having, as at 24th June 1895, received from the complainers the whole instalments payable under the said agreement, are barred personali exceptione from enforcing payment of the bill by summary diligence.”

The respondents admitted that £50 had been paid to account of the sum in the bill, but averred that in charging the complainers they had given them credit for the whole sums then paid by them to account, and that at the date of extracting the protest the complainers were £15 in arrear of the instalments payable by them under the agreement. They founded on the agreement, and maintained that the protest contained a correct narrative of what occurred at the presentation of the bill for payment.

The respondents pleaded, inter alia—“(3) The complainers being in arrear with the instalments due by them at the time the proceedings complained of were taken, and the diligence used by the respondents having been regular and proper, the note should be refused.”

The Bills of Exchange Act 1882 (45 and 46 Vict. cap. 61), sec. 6, sub-sec. 7, enacts—“A protest must contain a copy of the bill, and must be signed by the notary making it, and must specify ( a) the person at whose request the bill is protested; ( b) the place and date of protest, the cause or reason for protesting the bill, the demand made, and the answer given, if any, or the fact that the drawee or acceptor could not be found.”

The Lord Ordinary in the Bill Chamber having sisted execution of the charge and passed the note, the Lord Ordinary ( Kincairney) on 30th November 1895 pronounced an interlocutor repelling the reasons of suspension and refusing the prayer of the note.

Note.—.… “It was argued that the protest on which the charge proceeded was irregular in two particulars—first, because it did not state the demand made on presentation; and secondly, because, if it did, it stated that the demand was made for more than was due.

The first of these objections is founded on section 51, sub-section 7, of the Bills of Exchange Act 1882 (45 and 46 Vict. cap. 61), which provides inter alia that a protest must specify ‘the demand made.’ The protest in this case bears that the bill was ‘presented,’ and it does not say expressly what demand was made, if any. The bill is copied at the beginning of the protest in the usual way, and appears ex facie of the copy to be an accepted bill, and I think it is a legitimate inference, that when it was presented it was presented for payment. Section 45 of the Act provides that ‘a bill is duly presented for payment which is presented in accordance with the following rules.’ None of these rules requires the making of any demand other than what is implied by the presentment. I am of opinion that a presentment for payment is a demand for payment, and that the protest in stating that the bill was presented sufficiently complies with the requirement of the statute that the protest shall state the demand made.

But, in the second place, it is objected that, if this was so, then the demand must have been for more than was due, namely, for the whole sum in the bill, whereas at the time £20 or £19, 19s. had been paid to account, and I think that this is so. But, then, I have not been able to find any authority for the position that a protest is invalid and not a ground for diligence, which states that the demand was made in excess, if the protest itself is (as in this case) only for the sum in the bill crediting payments to account. There is no provision in the Bills of Exchange Act to that effect. No decision on the point was quoted, and I was not informed that there was any settled practice in the matter. I confess to some doubt and difficulty on this point, but I have come to think that the bill was dishonoured when payment of what was due on it was not provided or made, and that being dishonoured it might be protested.”

The complainer reclaimed, and argued—The diligence was bad, and must be suspended for two reasons—(1) the protest was invalid because it failed to comply with the requirements of the Bills of Exchange Act, and in cases where summary diligence was involved the language of the code must be strictly interpreted— M'Pherson v Wright, May 19, 1885, 12 R. 942. The statute required the protest to specify “the demand made.” Here, as a matter of

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fact, no demand for payment ever had been made, and there could be no failure to pay till payment had been demanded— Bon v. Rollo, July 20, 1850, 12 D. 1310 ( per Lord Wood, Ordinary). At all events, the protest did not specify the demand made on presentation, and, for aught that appeared, the demand might have been for the whole sum in the bill without any deductions, and such a demand the reclaimers would have been entitled to disregard. The words in the actual protest “under deduction of” the sums paid to account could not be read into the narrative. (2) The bill had lost all efficacy as a warrant for summary diligence owing to the dealings between the parties recorded in the agreement.

Argued for the respondents—The diligence was good. By the agreement the respondents were entitled to recover payment of the whole sum in the bill upon the reclaimers' failure to pay any of the instalments, and such failure had occurred. It was perfectly clear from the protest what the demand had been, and though the statute must be strictly interpreted, diligence would not be suspended on account of trifling errors so long as it was what the document meant— Crichton v. Watt, November 25, 1830, 9 S. 68; Gordon v. Sloss, June 3, 1848, 10 D. 1129. The protest here was in the usual form—Juridical Styles, last edition, ii., 20. The reclaimers were bound to be present at the office of Poole & Company when the bill was presented, or to provide money to meet it, for they knew that they had failed to pay one of the instalments; having failed to appear or to provide the money, they must take the consequences, and could not be heard to say that no demand had been made. As regards the place of payment named in the bill, the reclaimers had consented to it, and as a matter of practice nothing was commoner than for a bank to be named as the place of payment in a bill drawn by the banker and accepted by one of the banker's customers. The cases were precisely analagous. With reference to the contention that the protest was invalid because there might have been pluris petitio on presentation, an analogy was to be found in adjudications, where, though too much might be sought, the adjudication was good if the decree was taken for no more than the sum due— Maxwell, M. 110; Mackinnell, M. 312.

At advising—