Scottish Court of Session Decisions

Subject_1 PRESCRIPTION.
Subject_2 DIVISION VII.

Septennial Prescription of Cautionary Obligations, by act 5th Parl. 1695.
Subject_3 SECT. II.

Who entitled to the benefit of the act 1695. - Can the benefit of it be renounced.

James Ewart of Mulloch, and Robert Cutler, Merchant in Dumfries,
v.
Richard Lothian of Staffold

Date: 29 July 1762
Case No. No 226.

A person becoming cautioner for one partner of a company, to relieve the other partners of the company debts, not entitled to the benefit of the act 1695.

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In 1747, John Graham, Robert Ferguson, James Ewart, and Robert Cutler, entered into a co-partnery for carrying on a wine-trade. Each partner advanced L. 150; but, in the course of their trade, they had occasion to contract debts, and borrow money to a considerable extent.

In 1754, the other partners agreed to convey their several shares of the copartnery to John Graham, upon his paying to each of them L. 150 Sterling, the original stock put in by them, with interest, at the rate of 8 per cent. from the time of the advance, and relieving them of all the company debts.

Graham accordingly granted bills to the other partners for their respective shares of the company's stock; and a bond was also granted by him as principal, and Richard Lothian of Staffold as cautioner, for relieving them of the company debts.

By this bond, after reciting the several debts due to the company, and the above agreement entered into by the partners, the said John Graham as principal, and Richard Lothian as cautioner, surety, and full debtor, with and for him, “Bound and obliged them, conjunctly and severally, their heirs, &c. to free, relieve, harmless and skaithless keep, the said Robert Ferguson, James Ewart, and Robert Cutler, and each of them, of and from the sums of money particularly before written, due and addebted to the said company, to the several persons therein designed, amounting, in whole, to the sum of L. 1236 19s. 3d. Sterling of principal sums, and of and from the several penalties obliged for the same, and annualrents thereof, bygone, resting unpaid, and in all time coming: And, for their further security thereanent, the said John Graham and Richard Lothian bound and obliged them, conjunctly and severally, betwixt and the term of Martinmas 1756, to make payment of the said principal sums due to the several creditors, in manner before mentioned; and also of the hail annualrents, bygone, and in time coming, due upon the respective principal sums, as aforesaid; and of the hail expenses, if any be or shall be, or diligence done or to be done, for the recovery of the same; and to retire and deliver up to the said Robert Ferguson, James Ewart, and Robert Cutler, the several bonds, bills, and other vouchers of the said debts, with habile discharges thereof: And further, the said John Graham as principal, and Richard Lothian as cautioner, bound and obliged them, conjunctly and severally, to free and relieve the said Robert Ferguson, James Ewart, and Robert Cutler, of and from all other debts and sums of money, if any be due by the said company, more than these particularly before mentioned; all under the penalty of L. 250 Sterling, over and above performance.”

Matters being thus settled, Graham carried on the trade for several years upon his own account; but having thereafter failed, without paying up the whole of the company debts, the other partners charged Mr Lothian upon his bond to relieve them of these debts.

Mr Lothian suspended this charge; and, in bar of it, pleaded the benefit of the septennial prescription, introduced by the act 1695.

Answered for the chargers; The act 1695, being a correctory law, has always been restricted to the precise case provided for by its enacting words, viz. cautionry obligements, in bonds or contracts, for the payment of liquid sums of money to the creditors in such bonds or contracts. But, in the present case, the suspender is bound not only to pay the precise liquid sum of L. 1236 19s. 3d. the computed amount of the principal sums due to the company creditors, but also for the annualrents, bygone, and in time coming, with the expenses incurred, or to be incurred, thereupon; and is likewise taken bound to relieve the former partners “of all other debts and sums of money, if any be due by the said company, more than those particularly above mentioned.” From whence it appears, that his obligation is not for a precise liquid sum. Besides, it is not a bond for a sum of money due by Graham to his former partners, but only an obligation of relief, by which Graham and his cautioner became bound to pay the whole company debts to the company creditors; and, consequently, whatever plea the cautioner might have upon this statute against the creditors of the company, after the lapse of seven years, he can have no such plea against the creditors in this bond, to whom no sums are payable by the principal debtor and his cautioner, and who are only creditors for relief of those debts which the principal and cautioner had undertaken to pay to the proper creditors. With respect to the other partners, it is a mere obligation ad factum præstandum, which can never fall under the enactment of the statute.

“The Lords found, that Richard Lothian, the suspender, had not the benefit of the septennial prescription; and, therefore, found the letters orderly proceeded.”

For the Chargers, Advocatus. For the Suspender, Ja. Ferguson. Fol. Dic. v. 4. p. 100. Fac. Col. No. 94. p. 211.