with a banker, in security of his advances, the bills were not transferred until he obtained the debtor's indorsation, and if the debtor thereafter indorsed the bills within sixty days of bankruptcy, the transaction was struck at by the Act, but, by 8 31 (4) of the present Act, a transfer for value in Scotland without an indorsement now gives the transferee such title as the transferor had in the bill. The subsequent indorsement confers no additional title on the transferee, and the fact of its being made within the sixty days cannot, it is thought, have the effect of cutting down the good title which the transferee previously had. The Act 19 & 20 Vict. c. 79, § 6, provides that "the date of a deed under this Act, or under the Act passed in the Parliament of Scotland, held in the year 1696, chapter 6, shall be the date of recording of the sasine, where sasine is requisite, and in other cases, of registration of the deed, or of delivery, or of intimation, or of such other proceeding as shall in the particular case be requisite for rendering such deed completely effectual." Delivery renders the transfer of the bill completely effectual, and the want of the indorsement does not leave the transferee exposed to the risk of being excluded by some other party acquiring right to the bill.

(4.) In the case of the bankruptcy of a party liable on a bill, the claim must be by the holder, in the sense of this Act, vide § 2. Thus in Campbell v. Inglis, 27th May, 1853, 15 D. 685, a claim by A. B. as agent of a bank to which the bill had been specially indorsed, was repelled on the ground that he had no title to it, but the mere fact of a person being in possession of the bills, the indorsements whereon have not been scored, is not conclusive of his want of title, if he proves that he has the right to the bills. See Aitken v. Woodside, 26th Feb. 1852, 14 D. 572; Hain v. M'Cubbin, 13th Dec. 1853, 16 D. 179; Nicoll v. Romanes, 20th Dec. 1855, 18 D. 283. The holder of a bill may also claim, though it is not yet due, for the sum in the bill, after deducting interest on the sum from the date of the sequestration to the date when the bill falls due, 19 & 20 Vict. c. 79, § 52. The holder is entitled to claim on the estates of all the parties liable on the bill to the effect of recovering full pay

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§ 97.

ment thereof, Thomson on Bills, p. 563, but not more than
full value. Payments made prior to the date of sequestra-
tion reduce the amount of the claim against the bankrupt and
other co-obligants, but not payments made after the obligant's
sequestration, Hamilton v. Cuthbertson, 6th Feb. 1841, 3 D.
494. Where a bill is accepted by a partnership, the creditor
in a bill or note is entitled to rank for the whole amount on
the partnership funds, II. Bell's Com. 550, and to vote in the
sequestration for said amount, 19 & 20 Vict. c. 79, § 61.
When a creditor claims to vote on the estate of a partner,
he deducts the value of his claim on the company's estate,
and also on the estates of the other partners, so far as they
are bound to relieve that partner, ibid. § 61, but he is ranked
under deduction only of the value of his claim on the company.
To rank on the estate of a partner in respect of a bill accepted
by the company, he is ranked for the amount in the bill, less
the dividend received from the company estate, ibid. § 66. On
the other hand, the holder of a bill accepted by a partner as
an individual cannot be ranked on his share of the company's
estate, till the company's debts are paid in full. These rules
are founded on the recognition by the Law of Scotland of the
separate persona of the company, while the partners are
regarded as sureties for the company; but in England, where
the rules as to partnership are different, the rules in bank-
ruptcy are also different, see Chitty on Bills, pp. 450-460.
In the case of cross or accommodation bills—(1.) There can
be no double claim, directly or indirectly, grounded on the
same debt.
Thus an indorser or a cautioner cannot claim to
be ranked on the bankrupt estate of a drawer, upon which
the holder is ranked, Anderson v. M'Kinnon, 17th March,
1876, 3 R. 608. (2.) Mutual accommodation bills are
good considerations for each other. (3.) The dividend
which is paid by a bankrupt estate is payment by that
estate of all that can be demanded in respect of that debt.
(4.) If the cross bills remain undiscounted by both parties
they mutually extinguish each other, and the balance is
ranked on the estate which is debtor on the cross bills to
the larger amount. (5.) If one party discounts his bill
and the other not, the holder of the discounted bill ranks

on both estates for the whole sum, and the holder of the undiscounted is not ranked. (6.) If both parties have discounted their cross bills, the holders will both rank on both estates, II. Bell's Com. 420-424. The English bankruptcy rule known as ex parte Waring, reported 19 Vesey, 345, 2 Rose, Bankrupt Cases, 182, has not been adopted in Scotland, and is held to be inconsistent with Scotch bankruptcy. In Scotch practice, where B. accepts bills drawn by A. against goods left in B.'s hands as security, if both become bankrupt, the holder of the bill can rank on the estate of each to the effect of recovering full payment, but as B.'s estate is entitled to be indemnified for any dividends which his estate may be required to pay in respect of the bill, the goods in B.'s hands are applied to relieve his estate of the dividends successively paid to the holder, until the holder's claim is extinguished, and the balance of the fund, if any, is payable to A.'s trustee, Royal Bank v. Commercial Bank, 15th June, 1881, 8 R. 805, 10th July, 1882, 7 Appeal Cases, 366. "The subject of the acceptor's lien, when converted into money, becomes a fund to which his trustee in bankruptcy may legitimately resort, in order to avoid the necessity of making payments out of B.'s estate. When the amount of the assets available for dividend has been ascertained, nothing can be more simple than to calculate once for all, what sum must be taken from the fund in order to obtain indemnity." The trustee on B.'s estate "has merely to ascertain the dividend which B.'s estate will yield to creditors other than the bill holders, and then pay to the bill holders out of the indemnity fund, a corresponding dividend upon their claim. If the fund prove insufficient for that purpose, they will add it to the dividend fund, and divide the total between the creditors of B., including the bill holders," per Lord Watson, ibid. p. 397. For the rules of bankruptcy in England, see Chitty on Bills, 442-478; Byles on Bills, 441-469.

(b.) The law merchant is that part of the common law which is founded upon the custom of merchants, as ascertained

§ 97.

$97.

Saving of summary diligence in Scotland.

in decided cases, or by evidence of facts proving the custom, see Edie v. East India Company, 2 Burr. 1216 (1226); Goodwin v. Roberts, L. R. 10, Ex. 337 (346); 1 App. Cases, 476, 490, 496.

(c.) Vide Appendix.

(d.) Vide Appendix.

98. Nothing in this Act or in any repeal effected thereby shall extend or restrict, or in any way alter or affect the law and practice in Scotland in regard to summary diligence (a).

(a.) The subsisting enactments relative to summary diligence on bills and notes are 1681, c. 20; 1696, c. 36; 5 Geo. III. c. 49, SS 4, 5, 6; 12 Geo. III. c. 72, §§ 36, 42, 43; 1 & 2 Vict. c. 114, 1 and 9, vide Appendix. Summary diligence on a bill or note proceeds on a protest, vide Forms in Appendix, for non-acceptance or non-payment, vide § 52, which may be registered in the Books of Council and Session, or in the Books of the Sheriff-Court within the jurisdiction of which the person to be charged resides, although the other parties liable on the bill reside in other counties, Sutherland v. Gunn, 17th Jan. 1854, 16 D. 339. The protest must be made by a notary. The words of this section seem to imply that § 94 does not apply where summary diligence is to be used. The protest must be registered within six months after the date of the bill in the case of non-acceptance, and within six months after the falling due thereof, vide §§ 10 and 14, in the case of non-payment. Protests on bills payable on demand, vide § 10, are registrable within six months of the date of presentation for payment, and not from the date of the bill, Bon v. Lord Rollo, 20th July, 1850, 12 D. 1310. An extract of the registered protest contains a warrant to charge the party liable on the bill to pay the sum in the bill with interest and charges within six days, 1 & 2 Vict. c. 114, § 1 and 9. stamps on protests, see Appendix. Re-exchange and interest on a bill dishonoured abroad, as allowed by § 57 (2) may be

For

sued for in an ordinary action only, but if a party liable on a bill brings a suspension of a charge or threatened charge on the bill, these damages may be decerned for against the sus pender, and his cautioner in the suspension, Act 1681, c. 20. This power is rarely, if ever, used.

Summary diligence may proceed at the instance of the holder of the bill, whether payee or indorsee or bearer in the case of a bill payable to order, but the title of the holder must appear ex facie of the bill, and if extrinsic proof be required, an ordinary action alone can be brought. Thus in Fraser v. Bannerman, 21st June, 1853, 15 D. 756 a bill bore the following indorsements,-"Pay to the Agent for the North of Scotland Banking Co., at Macduff, A. B." and "Pay to the Manager of the North of Scotland Banking Co., Aberdeen, C.D. Agent." It was laid down that the principle of summary diligence was this, that the charger's title must appear perfect on the face of the bill, and that nothing must depend on extrinsic evidence, and that the charge on the bill was therefore inept. In Smith v. Selby, 10th July, 1879, 7 Sh. 785, a bill was granted to a woman, who thereafter married, and the bill passed to her husband jure mariti. It was held that he could not use summary diligence. See also Summers v. Marianski, 16th Dec. 1843, 6 D. 286. The drawer unless payee of the bill, cannot use summary diligence though he can raise action against the acceptor.

Where the bill is indorsed, after a protest has been taken, the indorsee, on obtaining an assignation of the protest, may raise diligence upon it, and also if diligence has begun, he may proceed with it in his own name on an assignation of the diligence, Thomson on Bills, p. 418. Where the bill is not accepted, diligence may be used against the drawer and prior indorsers, but not against the drawee, even though he have funds in his hands sufficient to meet the bill, vide § 55 (3). Where the bill is accepted diligence is competent against all parties liable on the bill, provided that due notice of dishonour, vide § 49, is given to the party against whom the diligence is to be used.

Summary diligence is competent on a bill signed by a notary or justice of peace in presence of two witnesses, 37 &

§ 98.