Scottish Court of Session Decisions

In 1830, James Hall, some time farmer at Callange, raised an action before the Sheriff of Fife against Andrew Christie, writer, formerly bank-agent at Cupar for the British Linen Company, and Thomas Arnot, trustee on Christie's sequestrated estate, setting forth that, in 1813, he had employed Christie, who was his ordinary man of business, to conduct a sale of his farm stocking, and guarantee the proceeds; that the proceeds amounted to £3357, and had never been duly accounted for; and that they ought now to be accounted for, and the balance due to the pursuer should be paid over to him.

Arnot pleaded in defence, that Christie, besides having a business-account against Hall, for law-agency, &c., had, as bank-agent, discounted many bills for him, and had rendered an account within 18 months after the roup, showing that a balance was due by Hall to him (Christie); and that an action of count and reckoning, which had been raised by Hall in 1816, and allowed to lie over, was dropped by Hall's agent at that period, in consequence of an inspection of the account and vouchers, which were then exhibited to him. Arnot produced an account from the books of Christie, in which Christie debited himself, as on May 11, 1816, with proceeds of the roup, &c., amounting to £3079; and credited himself with sums which left a balance of £160, 5s. 9d. then due to Hall. On the credit side of the account the chief items consisted of bills retired for Hall in 1814 and 1815. To this account a note of other bills was appended, considerably exceeding £1000, as also retired by Christie, and for which Hall was liable to him. This was the same account which Christie had rendered to Hall as above mentioned. The whole of the bills stated as retired for Hall were in the hands of Christie at his bankruptcy, and were now held by Arnot as his trustee. On these bills Hall stood either as drawer, acceptor, or indorser.

Hall objected that the bills were now prescribed, and could not be taken into view; and he contended that, laying them aside, there was a large balance due to him.

During the proceedings Christie died.

In 1830, Arnot obtained an assignation from the British Linen Company of bills to the amount of about £1800, on which Hall was an obligant, and which had been discounted by Christie as agent for the British Linen Company in the years 1814 and 1815. The assignation narrated that Christie “did, some time ago, and previous to the sequestration of his estates in 1827, make an arrangement with the said British Linen Company in regard to the said bills, whereby they were given up to him for his own behoof.” On two of the bills, amounting to £625, letters of horning and caption had been raised, and the assignation narrated, that the whole bills, and diligence thereon, were, “at the period of the arrangement above mentioned, delivered up to the said Andrew Christie, to be kept and used by him as his own proper writs and evidents.” The bills contained in this assignation formed great part of those against which prescription was pleaded.

The Sheriff found that “the pursuer has no claim upon the estate of the deceased Andrew Christie, and that, on the contrary, there appears to be a large balance due by the pursuer to the estate of the deceased; therefore assoilzied the defender from the conclusions of the action, and found the pursuer liable in expenses, subject to modification.”

Hall brought an advocation. The Lord Ordinary “advocated the cause, repelled the plea of prescription maintained by the pursuer, and, before farther answer as to the other pleas of parties, granted diligence at the pursuer's instance, for recovery of the states rendered by Mr Christie, as agent for the British Linen Company, to that bank, containing a list of the losses sustained by him as bank agent, or excerpts therefrom, in so far as relates to any of the bills founded on by the defender; also for recovery of letters or writings between Mr Chrisiie and the British Linen Company, containing the terms of the arrangement between them, referred to in assignation No. 96 of Process; also excerpts from the bank books of all entries relating to the said bills.” His Lordship also remitted to an accountant to report whether any balance remained due to the pursuer.

Hall Reclaimed.

The Court, “in hoc statu, recalled the interlocutor reclaimed against, in so far as it repelled the plea of prescription, adhered, quoad ultra, and, before answer, remitted to the Lord Ordinary to proceed accordingly, and to do in the cause as shall be just, reserving all questions of expenses.”

The Lord Ordinary of new remitted to the accountant, who reported that no cash-books, or day-books, of Christie for the years 1813, 1814, or 1815, were extant; but that there were two ledgers which had been carefully and accurately kept, chiefly holograph of Christie; that the account which had been rendered by Christie to Hall in 1816 corresponded with the entries in the ledgers, and that the same balance of £160, 5s. 9d. was brought out in the ledger, as due on 11th May, 1816, by Christie to Hall; that under that date there was a note in the ledger, apparently holograph of Christie, in these terms:—“N.B.—This balance retained, and to be applied to account of his bills with Arthur Edie, Robert Pearson, and others;” and that the ledger exhibited an account in name of Edie, on which a large balance remained due to Christie, including bills on which Hall was an obligant, to a much greater amount than the sum of £160. The accountant also reported that the ledger contained an account of “bills discounted for accommodation” of Christie, and that none of Hall's bills were there entered; that the whole of Hall's bills were discounted by Christie as bank-agent; and that no trace of evidence existed that they were discounted for his own accommodation. And, on the whole, that, if the plea of prescription were repelled, the balance of accounts was against the advocator.

Under this report, parties were heard by the Lord Ordinary. It was pleaded by Hall, that, under the imperative words of the statute, 12 Geo. III. c. 72, all bills after six years were prescribed, and of no legal efficacy, unless in the special case excepted by the statute, where diligence had been “raised and executed,” or “action commenced” on them within that time. That all the bills in question, but two, were thus prescribed, and must be wholly disregarded in the accounting, so that while Christie remained debited, under his own hand, to the large amount exhibited against him by his books, as the proceeds of the roup of the advocator's effects, he was not entitled to credit himself with the amount on account of the prescribed bills.

Arnot answered, that Christie was agent both of the bank, and also of Hall; and it appeared that as bank-agent, he had discounted bills for Hall's behoof, which he afterwards retired, and retained in his own hands. At that date he held funds of Hall to a large amount, and in these circumstances there was the most pregnant presumption, that, as Hall became debtor to Christie, by the act of retiring the bills, while he was creditor of Christie for the amount of his funds in Christie's hands, Christie must have retired and paid Hall's bills, with Hall's funds, and afterwards retained the bills, not as possessing any of the force or privilege of bills of exchange, but merely as vouchers of his disbursements. And this was in the strongest manner corroborated by the ledgers carefully kept by Christie, in which the several bills were, under their respective dates, entered to the debit of Hall, when retired by Christie, and was farther confirmed by the circumstance, that after Hall raised his first action of accounting against Christie, in 1816, Christie produced an account, debiting Hall with these bills; all which occurred within the years of prescription, and Hall then desisted from prosecuting his action. Upon the proof, therefore, the case resolved into this, that Christie, as Hall's agent, paid Hall's bills, with funds of Hall's in his hands, and afterwards retained the bills as vouchers of his disbursements; and in any subsequent action of accounting between his principal and him, Christie was entitled to found on these bills, as such vouchers, without regard to the term of the sexennial prescription.

The Lord Ordinary pronounced this interlocutor:—“Finds that this is an action of accounting brought in the year 1830 by the advocator against Andrew Christie, since dead, and the trustee on his sequestrated estate, for the alleged balance of the intromissions had by the said Christie, as the pursuer's agent, in the disposal of the crop and stocking on his farm in the year 1814; finds, that in the accounts rendered by the respondent, credit, more than sufficient to extinguish those intromissions, is taken on the part of Christie for various bills bearing the name of the advocator as drawer, acceptor or indorser, and which were discounted by Christie as agent for the British Linen Company at Cupar, about the time of the sale of the advocator's crop and stocking, and for which consequently Christie was, in his character of agent, liable to the Bank; finds, that in the year 1816, an action of accounting, the same in effect as the present, was brought by the advocator against Christie long before his bankruptcy, and that on this occasion, an account, containing all those bills as articles of discharge, was furnished by Christie to the agent for the advocator; finds, that after that account was so furnished, no farther proceedings took place in that action, and no steps of any kind were taken against Christie by the advocator till the year 1830, when the present action was raised; finds, that in these circumstances, the question is truly a question of accounting, and that the advocator is not entitled to plead prescription against bills only used as articles of discharge in that accounting, more particularly as the application of those bills to that purpose was intimated to the advocator in the year 1816, long before prescription had run against them: Therefore, repels the plea of prescription: Further, finds that the advocator has failed to prove the only other objection to the account appearing on the Record, viz., that the bills were granted and discounted for the accommodation of the late Andrew Christie: Therefore, of new, approves of the report of the accountant: Finds that there is no balance due to the advocator, and repels the reasons of advocation:

Remits the case simpliciter to the Sheriff of Fifeshire, and decerns; and finds the advocator liable in expenses.” ^*

Hall reclaimed.