In January 1772, Archibald Graham drew a bill upon Hugh Mackay, payable on Whitsunday of that year. According to the pursuer, David Elliot, Archibald Graham later endorsed the bill to James Campbell as compensation. This bill was then endorsed to William Graham, who later endorsed it to David Elliot. No demand was made on Mackay's bill until December 1773, 18 months after the term of payment. At this time David Elliot brought action against Hugh Mackay, who attested that he was not aware that the bill had been endorsed over, and pleaded compensation. The cause came before Lord Pitfour, who assoilzied (absolved) Mackay in February 1775. Elliot represented against this interlocutor, and the cause was remitted to Lord Auchinleck. Auchinleck reported the cause to the full court. In January 1777, the Court found compensation to be valid, and assoilzied Mackay. In a petition responding to this ruling, Elliot argued that other mercantile countries held much longer expiration dates for bills, and allowing compensation for a bill held by an onerous endorsee would be destructive for business. In July 1777, the Court agreed with the petitioner, and overturned its previous ruling.

Published Reports

William Morison, The Decisions of the Court of Session (1811), pg. 1648, , pg. 2692, , pg. Compensation - Retention App. Pt. 1 P. 4
Mungo Brown, Supplement to the Dictionary of the Decisions of the Court of Session (1826), pg. 395
Dalrymple, Decisions of the Lord of Council and Session, from 1766 to 1791, pg. 764