Scottish Court of Session Decisions

This was an action at the instance of John Hay Neill, wholesale stationer, residing at 1A Morrison Place, Piershill, Edinburgh, against Dobson, Molle, & Company, Limited, wholesale stationers, St Clair Works, Albert Street, Edinburgh, in which the pursuer claimed damages for the wrongous use of diligence.

On 5th January 1901 the pursuer accepted a bill for £37, 5s. 6d., at six months' date, drawn upon him by the defenders. The bill was addressed “To Mr J. Neill, 1 Morrison Place, Piershill, Edinburgh.” It was accepted generally, being merely signed by the pursuer as drawee without any additional words. No place of payment was Specified.

This bill fell due on 8th July 1901. It was not presented for payment at that date or subsequently until 10th September 1901, when it was presented for payment at the pursuer's place of business in George Street, Edinburgh, and payment was refused. The bill was immediately thereafter protested, the protest narrating that payment had been demanded on that day, and on the same day a charge was given to the pursuer at his residence.

Thereafter, the defenders having threatened to present a petition to have the pursuer ordained to execute a disposition omnium bonorum for behoof of his creditors under the cessio Acts unless the amount contained in the bill was sooner paid, the pursuer settled the defenders' claim in full, and on 11th October raised the present action.

The pursuer averred (Cond. 8)—… “In failing to present the bill at the proper place and on the proper date the defenders acted illegally and irregularly, and the diligence which they instituted was accordingly wrongful.”

The pursuer pleaded—“(2) The defenders having wrongfully and illegally done diligence against the pursuer as condescended on, are liable in reparation as concluded for.”

The defenders pleaded—“(4) The diligence done by the defenders being legal and regular they ought to be assoilzied.”

The Bills of Exchange Act 1882 (45 and 46 Vict. cap. 61) enacts as follows—(section 45) “Subject to the provisions of this Act a bill must be duly presented for payment. If it be not so presented the drawer and indorser shall be discharged. A bill is duly presented for payment, which is presented in accordance with the following rules … (sub-section 4) A bill is presented at the proper place … ( b) Where no place of payment is specified but the address of the drawee or acceptor is given in the bill and the bill is there presented.” Section 46 sets forth certain cases in which presentment for payment is dispensed with. It was not contended that the present case fell under any of these. Section 47 enacts as follows—“(1) A bill is dishonoured by nonpayment ( a) where it is duly presented for payment and payment is refused or cannot be obtained, or ( b) where presentment is excused and the bill is overdue and unpaid.” Section 51, sub-section 7, provides that a protest must specify “( 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.” Section 52, sub-section (1), provides as follows—“When a bill is accepted generally presentment for payment is not necessary in order to render the acceptor liable.” Section 98 of the Act enacts that nothing in the Act shall extend or restrict or in any way alter or affect the law and practice in Scotland in regard to summary diligence.

On 14th December 1901 the Lord Ordinary ( Stormonth Darling) approved of an issue for the trial of the cause.

Opinion.—“This is an action of damages for wrongous use of diligence by protesting and charging on a bill of which the pursuer was acceptor, although the bill had not been presented for payment at the proper time and place. The defenders maintain that there is no issuable matter, because by sec. 52 (1) of the Bills of Exchange Act 1882, ‘when a bill is accepted generally presentment for payment is not necessary in order to render the acceptor liable.’ “The fallacy of that argument, as an answer to the pursuer's demand for an issue, is that presentment for payment, though not necessary to render the acceptor liable on the bill, is necessary to found summary diligence against him. By section 98 of the Act the law and practice of Scotland in regard to summary diligence are preserved entire. Now, there can be no such diligence without a protest (‘the protest,’ says Mr Bell, Com. i. 437, ‘is, in Scottish law, the sole foundation for summary execution’), there can be no protest without dishonour of the bill (sec. 51), and there can be no dishonour without due presentment for payment, except when presentment is excused on one of the grounds mentioned in section 46, none of which apply to the present case. Accordingly presentment for payment, according to the rules set out in section 45, becomes a necessity even in the case of an acceptor, if the holder desires to do summary diligence against him. And it is of wrongful use of diligence in respect of undue presentment that the pursuer complains.

It was suggested in argument that by the combined force of sections 47 and 52 (1) a bill might be dishonoured without due presentment for payment, and without presentment being excused on any of the grounds mentioned in section 46, because section 52 is itself a sufficient excuse for non-presentment in the case of an acceptor. But if a protest is the ‘sole foundation for

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summary execution,’ no protest could possibly be framed in accordance with the provisions of section 51 without reciting the fact of presentment for payment.

I may observe that the case of Bartsch v. Poole & Company, 23 R. 328, 33 S.L.R. 233, which was a suspension of a charge on a bill, turned on the regularity of a protest taken by the drawers against the acceptors, and there was no suggestion from either bench or bar that diligence could be used against an acceptor without due presentment.”

The defenders reclaimed, and argued—The defenders should be assoilzied. It was true there could be no protest of a bill without dishonour, but under section 47, subsection 1 ( b), and section 52, sub-section 1, of the Bills of Exchange Act the pursuer's bill, which was accepted generally, was dishonoured without presentment for payment, which was not necessary to render the acceptor liable. The principle of the Act was that a holder could only enforce the guarantee of an indorsee by adhering strictly to the statutory requirements, and it made presentment for payment a necessary step on the part of a holder; but it was not open to an acceptor to object that the drawer had not come to ask for his money at the right place; it was within the acceptor's knowledge that the debt was due, and the provisions as to presentment for payment had nothing to do with the relation of drawer and acceptor. Therefore in a question between the pursuer and defender this bill was dishonoured the moment a demand was made and the pursuer refused payment, the bill being then overdue and unpaid. The cases in which presentment for payment was dispensed with were not restricted to those specified in section 46. The pursuer's bill had been competently protested. The Lord Ordinary was in error in holding that no protest could be framed in accordance with the provisions of section 51 of the Act without reciting the fact of presentment for payment; the words “demand made” did not involve presentment for payment, these words were used instead of “presentment for payment” to provide for such a case as the present, where under sections 47 and 52 a bill was dishonoured without presentment for payment.

Argued for the respondent—The Lord Ordinary correctly laid down the law and practice in Scotland as to summary diligence, and it was preserved entire by section 98 of the Act. Section 47 had to be read together with section 46, which exhausted the cases in which presentment for payment was dispensed with. No place of payment being specified in the bill, presentment for payment at the drawee's address was necessary under section 45 ( b). Sections 52 and 47 could not be read together to make summary diligence competent without presentment for payment, and so to contradict the rest of the Act.