James Grosett, son and executor-dative of Walter Grossett of Logie, Esq., deceased, formerly Inspector-General of His Majesty's Customs in Scotland v. Sir James Murray, Receiver-General of the Customs in Scotland [1763] UKHL 2

UKHL

James Grosett, son and executor-dative of Walter Grossett of Logie, Esq., deceased, formerly Inspector-General of His Majesty's Customs in Scotland v. Sir James Murray, Receiver-General of the Customs in Scotland

[1763] UKHL 2 · 1763-03-17

James Grosett, son and executor-dative of Walter Grossett of Logie, Esq., deceased, formerly Inspector-General of His Majesty's Customs in Scotland, Appellant v. Sir James Murray, Receiver-General of the Customs in Scotland, Respondent

House of Lords, 17th March 1763 .

Subject_ Bill — Negotiation .—

bill was indorsed in security of the customs, was bound, on the bill falling due, duly to negotiate it, and payment not being recovered in consequence of his neglect to do so: Held him liable in the contents.

Held a party (a public officer) to whom a

Page: 82 ↓

The Collectors of revenue and customs are required to render quarterly accounts to Exchequer, and, in making their remittances, they must state to what branches of the revenue the sum remitted is to be applied; but when that cannot at the time be ascertained, or when a collector is removed from his office, the practice is, to remit cash or bills to the Receiver-general, to lie as a deposit until that be ascertained.

Nov. 6, 1747.

On the removal of Walter Grosett, who was Collector-general of Customs at Alloa, to a higher sphere of duty, a balance remained in his hands, due by him, to the amount of £205. 6s.; and in payment of which he transmitted a bill, signed by James Drummond, merchant, as acceptor, drawn in favour of himself, and indorsed to the Receiver-general, and payable at Candlemas then next, and bearing to be indorsed for value, being his Majesty's money . This bill was sent with the following note:—

“Sir,—Enclosed I send you Mr. James Drummond's acceptance, of 6th Nov. 1747, for £205. 6s., to lie as a deposit till applied.” To which there was the following answer:— “Sir,—Having received from you the sum of £205. 6s. by Mr. James Drummond's acceptance of the 6th Nov. 1747, the same, when paid, shall lie as a deposit, as your letter of the 7th ult. has directed, until applied.”

Sometime thereafter, and before the bill fell due, Mr. Grosett gave directions for the application of £92. 3s. 9 ½d. of this sum. When the £205. 6s. bill fell due at Candlemas 1748, no demand was made by the Receiver-general for payment against Drummond, the acceptor, and the first demand for payment made against him was on 2d August 1748, six months after the bill became due, when, and not before, it was protested for non-payment, and no notice was given of this protest to Grosett, the indorser, for five months thereafter, when the acceptor, Drummond, had become bankrupt. Action was then raised for payment of the bill by Grosett, who, in the meantime, was compelled to account to the Exchequer for the amount, against the Receiver-general, on account of his neglect duly to negotiate the bill, by which the contents thereof were lost. Defence stated by the Receiver-general. That he was only chargeable with the

Page: 83 ↓

Against this interlocutor an appeal was brought to the House of Lords.

Pleaded for the Appellant .—That, by the law and custom of merchants relating to bills of exchange, the holder of any bill is bound to use all legal diligence, when the bill falls due, for the recovery of its contents, in case of non-payment; and was, therefore, bound to due negotiation. The respondent, in the present case, ought to have caused the bill to be protested, and the usual notice thereof to be given to the indorser; which not having been done, he by his failure in so doing, makes, and has made, the bill his own. The defence, that bills were not the legal payment for sums recovered by the Collector of customs was untenable; and is disposed of by the fact, that this practice of payment has been long in use, and was actually sanctioned, and formed a part of the Collector's instructions. Besides, the Receivergeneral had acquiesced in such mode of payment; and he could not have come to any possible loss by such arrangement, if he had duly negotiated the bill in question.

Pleaded for the Respondent :—The Collectors of customs are ordered “to pay to the Receiver-general, the monies from time to time received by them, describing upon what particular branches of the revenue such monies are received;”—That the Commissioners of Customs have allowed the Collectors, by the 4th article of their instructions, to remit their receipts “to the Receiver-general, by good bills of exchange ,” but it was never agreed, nor any way arranged, that the Receiver-general was to undertake any risk to the prejudice of the revenue; or to run any hazard by this method of remittance; and the present case must stand on a different footing altogether from a bill of exchange indorsed and remitted by one merchant to another, for value in the course of trade. In such a case, due negotiation was necessary, but no such obligation, devolved on the Receiver-general, who is accountable only for the actual money he receives, and to his Majesty. Seperatim . Where a debtor, for his own convenience, sends his creditor a bill, to be applied when paid, in discharge of his debt, it never was held, that

Page: 84 ↓

After hearing counsel, it was

Ordered and adjudged that the interlocutor complained of in the said appeal be, and the same is hereby reversed; and it is further ordained, that the respondent is liable to the appellant, as representative of his father, deceased, for the sum of £205. 6s., lost by the insolvency of James Drummond, the acceptor of the bill of exchange in question, but is not liable to any interest on account thereof.

Note .—This decision alters the rule decided in Alexander v. Cumming , that a bill indorsed in security does not require due negotiation. Vide M. 1582.