The British Linen Co. v. Cowan [1906] ScotLR 43_512 (17 March 1906)

The British Linen Co. v. Cowan [1906] ScotLR 43_512 (17 March 1906)

A person whose name is forged to a bill and who neither knew of nor adopted the bill by word or deed does not incur liability to the holder by mere silence in response to notices; passivity cannot create an obligation where none exists.

Citation
[1906] ScotLR 43_512
Parties
Pursuer: The British Linen Company; Defender: Alexander Cowan
Jurisdiction
Scotland
Judgment Date
17 March 1906
Procedural Posture
Civil / Inner House Appeal (reclaiming Note)
Outcome
defender assoilzied (absolvitor)
Legal Topics
Bill of Exchange, Forgery, Adoption, Estoppel, Personal Bar
Commercial Law Banking Law Bill of Exchange Forgery Adoption Estoppel Personal Bar

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Parties

The British Linen Company

Pursuer

Alexander Cowan

Defender

Procedural Posture

Civil / Inner House Appeal (reclaiming Note)

Legal Issues

  1. 1 Whether silence in response to notices regarding forged bills constitutes adoption or homologation of the forged signature
  2. 2 Whether a person whose name is forged to a bill incurs liability by failing to repudiate prior forged bills upon receiving notices

Ratio Decidendi

A person whose name is forged to a bill and who neither knew of nor adopted the bill by word or deed does not incur liability to the holder by mere silence in response to notices; passivity cannot create an obligation where none exists.

Court Disposition

defender assoilzied (absolvitor)

Orders

  • Court adhered to Lord Ordinary's judgment; defender absolved from liability; pursuers' claim dismissed with expenses.