Steele and Others (Walker's Trustees) v. M'Kinlay - [1880] UKHL 806

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House of Lords.

Monday, June 14. 1880.

(Before Lord Chancellor Selborne, Lord Hatherley, Lord Blackburn, and Lord Watson.)

17 SLR 806

Steele and Others (Walker's Trustees)

v.

M'Kinlay.

( Ante, July 1, 1879, vol. xvi. p. 647, 6 R. 1132.)

Subject_Bill of Exchange — Indorsation — Acceptance — Collateral Obligation — Mercantile Law Amendment Act 1856 (19 and 20 Vict. cap. 60), sec. 6.
Facts:

Held ( aff. judgment of the Court of Session) that the mere signature of a party, not the drawer or drawee of a bill, upon the back thereof, there being no words of acceptance prefixed and no evidence of an intention to become an acceptor, was insufficient, according to the provisions of the 6th section of the Mercantile Law Amendment Act, to infer an undertaking by the person so signing to be answerable for the amount of the bill.

Headnote:

This was an appeal from the judgment of Seven Judges of the Court of Session, whose decision is reported of date July 1, 1879, ante, vol. xvi. 647, 6 R. 1132. The documents on which the case depended and the course of transactions between the parties are there narrated.

The pursuers (Steele and others) appealed.

In moving the judgment of the House

Judgment:

Lord Blackburn said that he had come to the same conclusion as the majority of the Judges, but not on the same grounds. He did not infer from the facts, as some of the Judges in the Court below did, that Walker drew the bill and sent it to James M'Kinlay to accept, or ever treated his signature as an acceptance. The utmost that could be properly inferred was that James M'Kinlay said that if the proposed mortgage went off then he would see the bill paid. But such an engagement could not be proved except by statutory evidence. Since the Act of 19 and 20 Vict. cap. 60, sec. 6, the law of Scotland is as the law of England was before—namely, that no undertaking to answer for a debt of a third person is enforceable unless there is a writing signed as the statute requires. The

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question was, whether there was an obligation, under the custom of merchants as modified in Scotland, incurred on this bill by J. M'Kinlay to Mr Walker? Mr Bell in his Commentaries had been in error when he said that such a signature as this might according to English law be evidence of a collateral undertaking. It was not so in England. All the Judges below in this case held that this signature could not operate as an acceptance. Lord Shand showed that the cases quoted in Scotland did not support the view that that was ever the law of Scotland even before 1856. Other four Judges held that before 1856 this might have been a valid acceptance. But the statute of 1878 showed that the Common Fleas wrongly construed the statute of 1856, and that it would have been, and is now, a valid acceptance to sign the name across a bill without any words preceding it. James M'Kinlay, however, never intended to be an acceptor; and even if it was intended, which however was not clearly made out, that James M'Kinlay was to bind himself as a surety for his sons to Walker, and wrote his name on the back of the bill with that intention, he did not carry out his intention. He cannot be treated as a guarantor, because the law of England extends to Scotland, and there must be a writing signed to make a guarantee effectual—and there was no such writing proved.

Lord Hatherley concurred.

Lord Watson said he also was unable to agree with the grounds on which the majority of the Judges in the Court of Session decided this case. The tenor of the bill sufficiently showed that James M'Kinlay was not an acceptor of the bill. But that was not because he did not use words before his signature. On the contrary, the Mercantile Amendment Act of 1878 showed that it was a mistake of the Court of Common Pleas to have supposed that an acceptor would not sufficiently bind himself by merely signing his name without more even while the statute of 1856 stood alone. And after the Act of 1878, which was a declaratory Act, the mere signature would now amount to a valid acceptance. It was plain however from the facts that James M'Kinlay did not sign as a party to the bill, but merely gave his signature without exactly knowing what the effect of that would be. And there was no sufficient evidence that James M'Kinlay had made himself a guarantor of the bill. The judgment of the Court was therefore right.

The Lord Chancellor said that after reading the opinions of Lord Blackburn and Lord Watson he would not ‘have added anything of his own, being satisfied with their reasons. But as the question was one of general importance, and turned on the construction of the two Mercantile Amendment Acts of 1856 and 1878, he was of opinion that the Act of 1878 was a declaratory Act, and showed that the construction of the Act of 1856 had been misapprehended. It was, and now is, quite enough to bind an acceptor that he merely sign his name across the bill without any words preceding the signature. But in this case it was sufficiently apparent that he did not sign his name as an acceptor, and his liability could only be established by evidence in writing signed by him that he was a guarantor, and here there was no such evidence; therefore the decision of the Court below should be affirmed and the appeal be dismissed.

The House affirmed the judgment of the Court of Session, with costs.

Counsel:

Counsel for Appellants— Benjamin, Q.C.— Romer. Agents— Simson & Wakeford and Ronald & Ritchie, S.S.C.

Counsel for Respondent— Pearson, Q.C.— Scott— Roger. Agents— Holmes, Anton, & Greig, and Morton, Neilson, & Smart, W.S.

1880

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