McKenzie v British Linen Company
| Jurisdiction | Scotland |
| Judgment Date | 04 June 1880 |
| Docket Number | No. 140. |
| Date | 04 June 1880 |
| Court | Court of Session |
Lord Adam. B., Lord President, Lord Deas, Lord Mure, Lord Shand.
Bill of Exchange—Adoption of forged signature.—
Circumstances in which held (rev. judgment of Lord Adam, diss. Lord Shand), that a person whose signature was forged as the drawer and endorser of a bill had adopted his signature and was liable in payment of the sum contained in the bill.
Opinion (per Lord Shand) that there is no legal obligation on a person whose signature to a bill is forged to give information of the forgery to the holder of the bill, and that mere silence on his part will not infer adoption of the forged signature.
The British Linen Company charged Duncan M'Kenzie, contractor, Inverness, to pay £70 contained in a bill dated 14th April 1879, which bore to be drawn and endorsed to the British Linen Company by M'Kenzie and John M'Donald, jointly and severally, and to be accepted by John Fraser.
M'Kenzie brought the present suspension of the charge on the ground that his signature was forged. He stated that the bill was a renewal of another bill for £76 on which the complainer's signature was also forged. The whole circumstances were fully brought out in a proof which was led in the case, the import of which sufficiently appears from the opinion of the Lord President.
The respondents, the British linen Company, averred;—(Stat. 8) ‘The said bill was drawn and endorsed by the complainer, or with his knowledge and authority, and the respondents believe and aver that the complainer was aware that the said bill, having his name as drawer and endorser thereon, was presented to the bank, and that the bank discounted it in reliance thereon. He never intimated to the bank that the signature of his name to the first bill was a forgery, nor did he so intimate to the bank in regard to the second bill until a fortnight after he had received notice from the bank of the bill being due. If he did not draw and endorse the bills himself he misled the bank into the belief that the signature thereon was his genuine signature, and he adopted them as his, and assumed the responsibility attaching to drawing and endorsing them.’
The complainer pleaded;—(1) The signatures upon the bill charged on, bearing to be the complainer's, never having been written by him, or with his authority or knowledge, and the respondents” averments of adoption being unfounded in fact and insufficient in law, the complainer is entitled to have the charge suspended. (2) The complainer not being, on any ground known in law, liable in payment of the pretended bill charged on, he is entitled to suspension as prayed for.
The respondents pleaded;—(1) The said bill having been drawn and endorsed by the complainer, or with his knowledge and authority, there are no sufficient grounds for suspending the charge thereon. (2) The complainer, having adopted said bills, is barred from pleading the forgery thereof.
The Lord Ordinary pronounced this interlocutor:—‘Suspends the charge complained of, and whole grounds and warrants thereof, and decerns: Finds the complainer entitled to expenses: Allows an account thereof to be lodged, and remits,’ &c. *
The respondents reclaimed.
John Fraser was tried at the Spring Circuit at Inverness, and convicted
of forgery. The only question argued in the Inner-House was whether M'Kenzie was liable, the forgery being admitted.
At advising,—
Lord President.—This is a suspension of a charge upon a bill for £70 dated 14th April 1879, payable three months after date, bearing to be drawn by the complainer and one John M'Donald upon a person of the name of John Fraser, grocer, Greig Street, Inverness. The ground of suspension is that the complainer's signature thereupon is a forgery, and although originally the chargers denied that allegation, it must now be taken that the complainer's signature certainly is a forgery. But there is another answer made to this suspension, viz., that the complainer adopted the signature upon this bill and allowed the bank to rely upon it as being his genuine signature. That, of course, is a question of fact upon the evidence before us, and I think the case is one that requires very close consideration, because the evidence is undoubtedly of a very peculiar character, and I quite sympathise with the difficulty which the Lord Ordinary has felt in dealing with that evidence. One averment of the chargers is that they ‘believe and aver that the complainer was aware that the said bill having his name as drawer and endorser thereon was presented to the bank, and that the bank discounted it in reliance thereon.’ But there is another averment which brings out elements of particular importance in this case. This bill was a renewal of a previous bill with the same names upon it for the sum of £76. Upon the face of that bill the complainer and M'Donald were drawers, and John Fraser was the acceptor, and that bill had been also discounted with the British Linen Company, and this £70 bill, as I have said, was a renewal to the extent of £70 of that previous bill. The further averment made is—‘He never intimated to the bank that the signature of his name to the first bill was a forgery, nor did he so intimate to the bank in regard to the second bill until a fortnight after he had received notice from the bank of the bill being due. If he did not draw and endorse the bills himself he misled the bank into the belief that the signature thereon was his genuine signature, and he adopted them as his, and assumed the responsibility attaching to drawing and endorsing them.’
There are two averments here which require to be distinguished. The one is that the complainer was aware that this first bill with his forged name on it as drawer was presented to the bank and discounted by the bank in reliance upon his name being genuine. That means of course that at the time at which it was presented to be discounted the complainer was aware that his signature
thereon was a forgery, and if that is established I think the case is clear indeed, because in that case the complainer would be distinctly particeps fraudis, and probably answerable criminally.
But the other averment is this—that by his conduct, not silence merely, but silence combined with his conduct, he allowed the bank to rely upon his signature being genuine, and so adopted it as his genuine signature.
Now, we must examine the evidence in reference to both of these allegations. The first bill was dated 7th February 1879, and was a bill due at two months” date. It therefore became due on the 7/10 April 1879, and when it became due the bank sent an intimation to the complainer, dated 12th April, in these terms:—‘Your bill on John Fraser, 7th February, 2 m/d, for £76, is lying in my hands under protest for non-payment; be so good as to order it to be retired immediately.’ This is sent by the bank's agent at Inverness. Now, M'Kenzie, the complainer, sent no answer to that intimation. He became, as we shall see, immediately aware from the time of receipt of that intimation that his name so upon that bill was a forgery, but he made no intimation of that fact to the bank. The bill was retired in the manner which I have already specified, viz., by the substitution therefor of the bill now charged on for £70 and £6 in money, and the latter bill thereafter came to be regarded by the bank as a genuine bill, and the silence of M'Kenzie on that occasion was certainly very much the reason why the bank was led into the inference that the signatures on it were genuine signatures. But, then, let us see what the complainer did upon receipt of this notice. I think his conduct on that occasion is of the greatest possible importance in leading us to a conclusion in regard to the state of his knowledge of what took place then. We have his statement thus—He says he got the intimation from the bank on the Saturday night, and ‘I went into Inverness on the Monday morning.’ He says, some lines before, that he did not know who John Fraser was who bore to be the acceptor of the bill, but he says, ‘I thought it might be Fraser of Greig Street, Inverness, and I went to him accordingly.’ Now, it certainly is very strange how it was he thought that it was Fraser of Greig Street, Inverness, who was the acceptor of the bill, and who was probably the forger of his name, for there were other Frasers, and particularly there was another John Fraser, a miller, with whom he had had previous bill transactions, but still he did not think it was Fraser the miller's bill, but Fraser of Greig Street, Inverness; and when he is asked at a subsequent part of his deposition whether he thought it was Fraser of Inverness that had signed the bill the question is put to him in these terms—‘Why did you suspect that it was Fraser of Greig Street that had signed the bill?’ he answers, ‘I had a line from him, or he sent me word by a party belonging to our place, that he had something particular to tell me. I do not mind the date of that note. It was before the first bill fell due. I would say it would be about a month before. I did not go to his shop at that time. I think that line or letter should be in Court. (Shewn No. 43, dated 11th February 1879)—This is the line I refer to. I received it through the post.’ Now, that line as he calls it is a letter, and is very peculiar in its terms. It is dated 3 Greig Street, Inverness, February 11, 1879, and is addressed to the complainer—‘My dear Sir,—Will you be so kind as to call to see me the first time you will come to the town, for I wish to see you very particular. Barny Stewart was seeing me to-night. I am keeping very busy since I opened. Remember and do not forget to call, for I have some particular thing to tell you.’ Now, he continues—‘The line says 'Remember and do not forget to call, for I have some particular thing to tell you”.…I did not call, because I did not think it was my duty to call. I did not want anything...
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