same way, and on the same grounds, as a drawer or indorser of the bill." "I should be sorry to affirm the general proposition, that a party who guarantees payment of a bill may not be entitled to some kind of notice. That is a question not in the law of bills, but in the law of cautionary obligations, and it depends on this, whether the creditor in the cautionary obligation has dealt fairly with the party who guaranteed the debt. Cases may be supposed in which the drawer of a bill who gets a guarantee, and finds that the bill is dishonoured when due, may have placed himself in such a position as regards the granter of the guarantee as to be bound to give him intimation, so that the party granting the guarantee may be liberated, if he suffer loss in consequence of the want of intimation.” 2 Similarly, a cautioner for the acceptor of a bill is not discharged merely by the holder's failure to present for payment. 3 One who guarantees the acceptance of a bill is not discharged, though the bill is not presented for acceptance until the period of payment and the drawer has in the meantime become bankrupt. 4

3

On the other hand, a cautioner for a drawer or indorser is discharged, if the holder fails to preserve recourse against prior parties to the bill.5 And if a person has undertaken to indorse a bill, it may be questioned if he should be held bound to pay, unless he is asked to indorse the bill before it is dishonoured or at least receives due notice of its dishonour. Otherwise, he would be more strictly bound than if he had implemented his obligation to indorse. "

1 Brown v. Kirkland, 1861, 23 D. 363, per L.J.C. Inglis; Carter v. White, 1883, 25 Ch. D. 666; Thomson, 363.

2 Brown v. Kirkland, cit. per L.J.C. Inglis; see Bell's Prin. 262-3.

3 Carter v White, cit.; Thomson, 285.

National Bank v. Robertson, 1836, 14 S. 402.

5 See Alexander v. Scott, 1827, 6 S. 150; ss. 45 and 49; Bell's Prin. 260. 6 See Watt v. National Bank, 1839, 1 D. 827.

IV. DILIGENCE AGAINST BILLS OF

EXCHANGE AND BILL DEBTS.

Crown Debts.-Bills of exchange may by statute be poinded for Crown debts.1

Bankruptcy. They are transferred to the trustee in a sequestration in bankruptcy by the Act and warrant in his favour,2 and to the trustee in a cessio by the decree decerning the bankrupt to execute a disposition omnium bonorum for behoof of his creditors. They may be taken possession of by warrant of the sheriff upon cause shown at any time after the presentation of a petition for sequestration or for cessio.*

Poinding. There is no authority as to whether or not bills and notes may be poinded at the instance of an ordinary creditor of the holder, beyond an opinion in an old case that it is competent to poind bank notes.5 The general rule as to poinding is, "that only things corporeally valuable, and capable of being sold by the sheriff's warrant, are poindable.” 6 But it has not been decided whether a document of the peculiar nature of a bill of exchange may for this purpose be regarded as corporeally valuable.

Arrestment. As to arrestment, the institutional writers do not discriminate between diligence against the document itself, and diligence against the debt which is contained in it, or in consideration of which it is granted. "There are some subjects which, though they be moveable, cannot be arrested. First, Bills; for these being considered as bags of money, which pass from hand to hand, cannot be affected with any burden in the person of the possessor." 7 Where the debt is due by bill or promissory note, arrestment is held not the proper diligence." 8

It has been decided that bills cannot be arrested in the hands of an agent or trustee by a creditor of the person to whom they are really due, though the obligation to account may be arrestable.2 It has been said that in these circumstances the proper method by which to attach them is an action of exhibition.3

On the contrary, it is competent for a creditor of the holder of a bill to arrest the debt contained in the bill in the hands of the acceptor.4 If, after the arrestment has been made, the bill is indorsed to a holder in due course,5 he is entitled to payment in preference to the arrester. But in a competition with the holder whose creditor the arrester is, or with an indorsee who is not a holder in due course, the arrester's claim is preferable. An indorsee who has notice of the arrestment is not a holder in due course. It appears that the creditor of the holder of a bill should similarly be entitled to arrest in the hands of all parties liable on the bill to his debtor, and that such arrestment should have the same effect in competition as arrestment in the hands of the acceptor: otherwise the arrestment could not be effectual. The right of the arrester to recover in preference to a holder not in due course is subject to the qualification that no party to a bill can be compelled to pay, except upon production of the bill.9 On the other hand, the holder of a bill may be interdicted from inindorsing it, in circumstances where this can be shown to be necessary for the prevention of an injustice.10 And further, while the acceptor and arrestee is entitled, as appears from the cases cited, in order to save himself from the risk of paying to a

1 Johnston v. Dundas' Trs., 1837, 15 S. 904; Jameson v. Leckie, 1729, M. 711; Pewtress v. Thorold, 1768, M. 756; Haddow v. Campbell and Co., 1796, M. 763, 2 Bell's Com., 68, n.; Dick v. Goodall, June 1, 1815, F.C.; Thomson, 195.

2 Lothian v. M'Cree, 1828, 7 S. 72; Cameron v. M'Ewen, 1830, 8 S. 440; see Graham Stewart, 79; Bell's Prin. 2276.

Jameson v. Leckie, cit.; Dick v. Goodall, cit.

4 See Smith v. Home, 1712, M. 1502; Freer v. Richardson, Nov. 18,

competition.

person who is not entitled to receive payment, to refuse payment of the bill and so to give rise to a competition,1 the holder of the bill is not bound to await the result of the He is entitled to force any parties against whom he has recourse, to retire the bill.2 It thus appears that, unless the common debtor becomes insolvent and unable to take up the bill, it should at once find its way from the hands of any bona fide indorsee to those of the common debtor. In this way, though the bill has after the date of the arrestment been indorsed to a holder in due course, the arrester should generally have the benefit of his diligence.

Sequestration for Rent. It is the generally received opinion that bills and notes are not included in the invecta et illata over which a landlord's hypothec extends; but there is no conclusive authority on the point.3

1 See Agnew v. White, 1899. 1 F. 1026; but as to voluntary assignation of the consideration cf. Bence v. Shearman [1898], 2 Ch. 582.

2 S. 47 (2).

3 Bell's Prin. 1276; 2 Bell's Com. 30; Rankine on Leases, 344; on the meaning of invecta et illata, Stair, iv. 25, 3; Ersk. ii. 6, 64.

V. STATUTES.

1681, cap. 20.

ACT CONCERNING BILLS OF EXCHANGE.

OUR Soveraigne Lord, considering how necessary it is for the flourishing of trade, that bills or letters of exchange be duely payed and have ready execution, conforme to the custome of other parts, doeth therefore, with advice and consent of his Estates of Parliament, statute and ordain, that in case of any forraign bill of exchange, from or to this realm duely protested for not acceptance, or for not payment, the said protest having the bill of exchange prefixed, shall be registrable within six moneths after the date of the said bill in case of non-acceptance, or after the falling due thereof in case of non-payment, in the Books of Council and Session or other competent judicatures, at the instance of the person to whom the same is made payable, or his order, either against the drawer, or indorser, in case of a protest for non-acceptance, or against the acceptor, in case of a protest for non-payment, to the effect it may have the authority of the judges thereof, interponed thereto, that letters of horning upon a simple charge of six dayes, and executorials necessary may pass thereupon, for the whole sums contained in the bill, as well exchange as principal, in forme as effeirs, sicklike, and in the same manner, as upon registrat bonds, or decreets of registration, proceeding upon consent of parties. Providing alwayes, that if the saids protests be not duly registrat within six moneths, in manner above provided, then and in that case, the saids bills and protests are not to have summar execution, but only to be pursued by way of ordinary action, as accords. And farther, it is hereby statute and enacted, that the sums contained in all bills of exchange, bear annual-rent in case of not acceptance from the date thereof, and in case of acceptance and not payment from the day of their falling due, ay and