Scottish Court of Session Decisions

Sequel of the case mentioned ante, XI. 314, which sec. After the: judgment there mentioned, the cause having returned to the Outer-House, the Lord Ordinary remitted of new to the accountant to make out a final state in conformity with that judgment. A report was accordingly returned, to which several objections were taken for Robarts. Of these, however, it is only necessary to notice two, viz. those to charging him with interest on a sum, short consigned, and to disallowing his claim for commission.

I. As to the first, the circumstances regarding it were these. In 1828, Robarts, by allowance of the Lord Ordinary, consigned a certain sum of money, consisting, according to a state lodged by him, of so much principal, with interest thereon, at the rate of four per cent. In 1829, an order was made by the Lord Ordinary for consigning a farther and separate sum of principal, “with interest thereof, at the rate of four per cent, from the respective dates of receipt till the date of consignation,” and the gross amount was consigned accordingly. Ultimately, Robarts was found liable in interest at the rate of five per cent; in consequence of which, it came now to be held, that these consignations were considerably short of the funds actually due by him and in his hands, and, in making up the final state, the accountant charged him with interest on the sums short consigned from the dates of consignation.

To this Robarts objected, that, contrary to the terms of the judgment of the Court, he was thereby charged with interest upon interest, inasmuch as having consigned so much specially as principal, and so much as interest, at the rate of four per cent, the deficiency was undoubtedly as to the interest which thus was short consigned in consequence of a higher rate being afterwards found due, and not as to the principal, which was fully consigned, and consequently that, by allowing interest on the sum deficient, interest was truly charged upon interest.

To this it was answered, that the consignation had been as of the whole sum due, whether principal or interest, and so that there was no proper special appropriation of so much for the principal and so much for the interest, and consequently that, on ordinary principles of law, it fell to be applied, first to the interest due, and then to the principal, leaving a balance of principal, on which interest was justly chargeable.

II. As to the claim for commission. Robarts, as mentioned in the former report, had become surety for the late Mr Cuthbert for payment of the rent of the provost marshal's office, and due performance of the duties. In indemnity of this obligation and security of debts otherwise due him, Mr Cuthbert, in 1796, granted him an ex facie absolute conveyance of his Scotch estates, qualified by a back-letter, declaring that they were held in trust for his own security and payment in the first instance, and in the next, for payment of Mr Cuthbert's other debts, and providing, that he should have an allowance of £200 a-year for his trouble in management, &c., till the expiry of the lease of the provost marshal's office, which was to take place in 1807. Mr Cuthbert died in 1802, leaving a will, whereby Robarte and others were appointed his executors, and directed to invest the monies to arise from the sale of the Scotch estates “in the public funds, or on other good security.” In 1804 and 1805, Robarts sold as much of the Scotch estates as satisfied his own and the other preferable debts; and, in 1806, a meeting of Mr Cuthbert's creditors was held, at the desire of his brother, the Bishop of Rhodez, who stated to them that his object was “to endeavour to bring about some arrangement of his brother, Mr Lewis Cuthbert's, affairs, to the satisfaction of Mr Robarte, and the creditors of his brother, in which he hoped the creditors, and all concerned, would readily concur ih the view of yielding a reversion to the family of his brother, and that this be done at the least expense possible.” This meeting, inter alia, agreed “that Mr Robarts be requested to take the trouble of receiving the prices of the lands sold and to be sold, and of paying the same, agreeably to the awards that may be given by the arbiter, not doubting that he will allow interest thereon after the rate of five per cent per annum, so far as said prices shall not be exhausted by payment of his own and prior preferable debts.” In compliance with this request, Robarts appointed a factor, by whom the Scotch estates were sold, and the prices remitted, and who was allowed a commission for his trouble. These prices, and certain other sums due Mr Cuthbert's estate, were received by Robarts; but except in the act of so receiving them, he had no trouble whatever—having, instead of himself making any division among the creditors, raised this process of multiplepoinding, the fund in medio in which, in consequence of the pending claims relative to the provost marshal's office, Was allowed to remain in his hands till consigned as above mentioned, blended with his own funds, and employed by him in his business of banker. He was allowed to charge the £200 a-year above mentioned, till the expiry of the lease of the provost marshal's office in 1807; but ho further claimed a commission on all the monies thereafter received and paid, or consigned by him. In the circumstances of the case, and Robarts being found not liable to have the interest accumulated in the charge against him, whereby, without taking into view profit realized by the employment of the money, he gained £13,000 of interest alone, the accountant disallowed his claim for commission, and Robarts objected to his report on that head, as already mentioned.

With reference to these two points, the Lord Ordinary pronounced as follows: “Repels the second objection, in respect that the sums consigned having been less than the sums now ascertained to have been due at the dates of consignation, the said sums so consigned are to be applied, in the first place, to extinguish the interest due, thus leaving the whole balance unpaid a principal sum, upon which interest is due, so that interest upon interest is not charged: repels also the third objection as to commission, finds no commission due, in respect, that being the friend, and executor, and disponee, with a power of sale, of the late Mr Cuthbert, and much interested as a creditor in the winding up of his affairs, the late Mr Robarts undertook the duty of trustee, without any stipulation for commission being made by him, or on his behalf, at the meeting of 1st August, 1806, when the Bishop of Rhodez stated, that the object of the arrangement was with ‘the view of yielding a reversion to the family of his brother, and that this be done at the least expense possible;’ and that the duty of managing the sales, and recovering the price, was devolved on Mr Campbell Mackintosh, the factor, who has charged and been allowed a commission for this trouble, the trouble of Mr Robarts having been confined to receiving the proceeds in remittances from the factor, which, to a large amount, he was allowed to retain in his hands for unsettled claims, and for which he has been held bound to account only for simple interest.”

Robarts reclaimed.