Reports
of cases argued and determined
In the courts of common pleas and Exchequer Chamber
By
Henry Blackstone
1801
Pg.155
Wednesday Feb 11th 1789
Kilgour v. Finlyson, Galbreath, and Harper
Indorsee against the ostensible endorsers, who also
appeared to be drawers of a bill of exchange. Money paid, money had and
received, account stated, Verdict for the plaintiff.
The circumstances of this case were as follow :
The plaintiff was a warehouseman and factor, the defendants
were also warehousemen and factors in partnership from Midsummer 1785, to the 28th
of July 1787, when the partnership was dissolved, and notice of the dissolution
given in the Gazette as under,
“Notice is hereby given, that the copartnership between
Thomas Finlyson, Thomas Galbreath, and Henry William Harper, of Bow church-yard,
warehousemen, under the firm of Finlyson, Galbreath, and Harper, and also at
Glasgow under the firm of William Harper and company, was by mutual consent
dissolved this day; all demands upon the above firm will be paid by Thomas
Finlyson of Bow church yard, who is impowered to receive and discharge all debts
due to the said co-partnership.”
Witness our hands, this 28th day of July 1787,
Thomas Finlyson, Thomas Galbreath, Henry William Harper.
At the time of the above dissolution one Scott was indebted
to the partnership in £758 and the partnership indebted to Sterling Douglas and
Co. in £890. On the 21st of September, 1787 Finlyson drew the bill
in question in the name of the late partnership on Scott, payable on the 23d of
November following for £304. 2s., which Scott accepted. On the 9th
of October Finlyson indorsed it, in the name of the partnership, to the
plaintiff, who discounted it, by giving his own promissory note for £304. 3s.
6d. payable on the 25th of November, (the difference of 1s. 6d. being
on account of the note being due two days later than the bill). This note of the
plaintiff’s was indorsed by Finlyson to Sterling Douglas and Co. who
discounted it, and received the money they had advanced by so discounting the
note, back again from Finlyson, in part of payment of the debt owing to them
from the partnership. When the note became due the plaintiff paid it to Sterling
Douglas and Co. Two days before Scott’s bill became due Finlayson took it up,
and gave in lieu of it another bill to the plaintiff, accepted by Lee, Strachan,
and Co., but did not take back Scott’s bill. Afterwards Lee, Strachan, and
Co.’s bill not being paid, and Finlyson having become bankrupt, the plaintiff
brought this action against all the partners on Scott’s bill, which remained
in his hands, and obtained a verdict.
A rule being granted to shew cause why this verdict should
not be set aside, and a new trial granted,
Adair and Bond, Serjts. Shewed cause. They acknowledged
that the action on the bill could not be supported, but contended that the
plaintiff was entitled to retain his verdict, having paid money to the use of
the defendants, at the special instance and request of a person authorised by
them to receive and pay their debts.
Le Blanc and Lawrence, Serjts. For the rule argued, that it
ought to have shewn, that the money was actually paid in discharge of a
partnership debt; if it were paid, when Finlyson had no right to pledge the
credit of the partnership, it was not paid to the use of the partnership. But
admitting that it was paid for a partnership debt, yet being paid without the
knowledge and request of the defendants it could not be sufficient to raise an
assumpsit. Finlyson had no authority to borrow money to pay their debt, or to
contract for them without their consent. This case must be considered as already
decided by Lord Kenyon in the (a) King’s bench.
Adair replied, that in the case cited it was only holden
that an action could not be maintained on the bill of exchange. The reason of
which was, that the bill being negotiable, and going into the hand’s of
persons who might not know the consideration for which it was given, must be
binding when given, or not at all. The authority of the drawer must be
independent of any application of the money. But no such inconvenience could
arise from the action for money paid. It is admitted that Finlyson paid the
money of the plaintiff in discharge of a partnership debt; he had full authority
from the other defendants to receive and pay : he therefore applied to the
plaintiff for his note at their special instance and request.
Lord Loughborough – I was of opinion at the trial, that
there was an equity in favour of the plaintiff, the money arising from his note
being de facto applied for the benefit of the partnership, and the authority
from the other partners giving him power to discharge their debts. But I am now
convinced that I was mistaken. Consider the nature of this transaction :
Finlyson applies to Kilgour to discount the bill accepted by Scott, and in part
of the discount takes a promissory note from him; Kilgour, before Scott’s bill
became due, changes it with Finlyson for another, accepted by Lee, Strachan, and
Co., returns that, and takes Scott’s bill back again. Now all this was carried
on, without any idea of the former partners being bound by it. On the 10th
of October, long before the plaintiff’s note was due, the defendant applied to
Sterling Douglas and Co. to discount it, who accordingly did discount it, but
received the money back again in part of payment of their debt owing from the
partnership. When this note became due the plaintiff paid it to Sterling Douglas
and Co., but at that time no debt was owing to them from the partnership; the
payment therefore of the plaintiff was not a payment to the use of the
partnership. Though the money raised by discounting his note before it was due,
was in fact paid in discharge of a partnership debt, yet he cannot follow the
money through all the applications of it made by Finlyson.
(a) Heath and Wilson Justices, of the same opinion.
Rule absolute for a new trial.
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