Holder of bills of exchange may take legal action

The First Hall of the Civil Court ruled that the holder of bills of exchange is entitled to take legal action to collect the debt, irrespective of any other argument that the debt is not due. This was decided on 24 March by Mr Justice Lawrence Mintoff in Paul Pullicino -v- George and Victoria Camilleri.

Paul Pullicino filed a lawsuit where he explained that the Camilleris failed to pay 25 bills of exchange from 1 February, 1996 to 1 February, 1998, which amount to Lm1,050 (€2,445). Pullicino asked the court to order the defendants to pay these bills of exchange.

Victoria Camilleri filed a statement of defence claiming that she is separated from her husband George, and according to the separation contract, it is her husband who assumed the responsibility of this debt.

On the other hand George Camilleri held that he does not owe any money to Pullicino. George Camilleri filed a counter claim in that he had purchased a car from Pullicino and both he and his wife signed bills of exchange of Lm42 each. On 26 December, 1995 he was involved in a traffic accident in Fleur de Lys. The parties then agreed that Pullicino was to take back the car and not insist on payment. Camilleri asked the court to order Pullicino to return the bills of exchange. 

Pullicino replied by saying that such a counter claim was not allowed in bill of exchange actions and the only replies were limited to the validity of the bills of exchange.

Mr Justice Mintoff examined the facts of the case where the price of the car was Lm2,200 and that 55 bills of exchange were signed by the two defendants. The Camilleris paid six of these bills of exchange. The traffic accident resulted in Lm1,075 in damages and the defendants stopped paying the bills. The plaintiff testified that he was prepared to receive the wreck and that the insurance firm was to pay for it, however, in actual fact he was never paid, because the insurance firm contended that the accident was George Camilleri’s fault.

He explained that the value of the wreck was lowered and he returned to the defendants 24 bills of exchange and held on to the remaining 25 bills. George Camilleri disputed this agreement and held that it was agreed that all the bills of exchange were to be returned, and not just 24. 

The court then considered the legal points of the case. The court pointed out that this action is known as actio cambiaria and 25 bills of exchange were in fact presented in court. The defendants are not contesting their validity, but that the debt was withdrawn by the plaintiff once the wreck was returned to him. In fact the wreck was sold and Pullicino pocketed the money. A witness for the insurance company confirmed that the damage to the car was not paid for because no claim was filed. 

The court in its judgement commented that the bills of exchange remained in possession of the plaintiff. If the debt were withdrawn by the plaintiff, the defendants should have made sure that these bills were put in their possession. Therefore, the plaintiff’s version of the matter was more credible. With regard to the fact that Victoria Camilleri’s claim that she is not bound to pay these bills of exchange, the court pointed out that she was a signatory to these bills and as a consequence she was jointly responsible for their payment.

With regard to the counter claim where the defendant George Camilleri is asking for the bills of exchange to be returned, the court held that in previous actions the defendant cannot bring forward personal pleas. The defendant had to prove that the plaintiff had to release the bills of exchange in his favour following the agreement reached by the parties. The legal norm qui allegat probat – who alleges must prove – applies here too, but the defendant failed to prove his version of events. 

The court then moved to order the Camilleris to pay to Pullicino the value of the bills of exchange together with court costs and interest.

Malcolm Mifsud, Partner, Mifsud & Mifsud Advocates

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