Scottish Court of Session Decisions

The late James Gemmell, S.S.C. was employed by the defender, Duncan Moon, to perform for him various matters of professional business. Inter alia, he acted as agent for him in a process of suspension, the account as to which, amounting to £42, commenced on 3d October, 1823, and terminated on 23d November, 1824. Moon was sequestrated under the Bankrupt Act in July, 1824. No specific claim on the above accounts was lodged by Gemmell in the sequestration. After certain proceedings, Moon made offer of a composition, which was accepted by the creditors, Charles, John, and James Moon (also defenders), binding themselves as cautioners, along with Duncan Moon as principal, for payment of the composition, and of the expenses incurred and to be incurred in the sequestration. Moon obtained his discharge in August, 1825. Gemmell was agent in the sequestration. His accounts for the expenses of which, amounting to £87, commenced on 30th July, 1824, and terminated on 19th May, 1826. This account was never liquidated, nor any decree pronounced for it. He afterwards conducted certain other legal proceedings for Moon's behoof, the account for which, amounting to £22, began 23d November, 1825, and ended in 1827.

During the period from 3d October, 1823, to 10th May, 1825, Gemmell held no attorney's license. Of this last date he took out a license; but did not take out another till March, 1827, subsequent to the currency of the above accounts.

On the death of Mr Gemmell, his executors, in 1836, raised action against Duncan Moon and his cautioners above mentioned, concluding, (1. and 2.) for payment of two business accounts alleged to have been contracted prior to October, 1823, and for payment (3.) of the account of £42, running from 3d October, 1823, to 23d November, 1824, to the effect (these accounts being alleged to be duo at the date of the sequestration) of subjecting for full payment Moon's estate and effects, in virtue of any right of hypothec competent to the deceased over his title-deeds and papers, and of subjecting (under the bond of caution) Moon as principal, and the other defenders as cautioners, in payment of the composition upon the sums of the accounts; (4.) for payment (under the bond) of the account of expenses incurred in the sequestration; and (5.) for payment by Duncan Moon personally of the account of £22 incurrred subsequent to the sequestration.

The defenders, denying that the 1st and 2d accounts concluded for were due, and stating that they were willing to pay those sums which could be legally constituted against them according to their respective liabilities, pleaded, in regard to the last three sums concluded for, that the pursuers were not entitled to sue for or recover payment of Gemmell's accounts for business done during that period of the years embraced by the accounts in question when he had no attorney's certificate.

In reply to the defence founded on the want of the attorney license, the pursuers alleged a certain arrangement with the solicitor of stamps, and pleaded, with reference to the sequestration expenses, that the defenders were barred from objecting to the account thereof, it being an essential condition of the composition contract and discharge that these expenses should be paid.

The Lord Ordinary pronounced the following interlocutor, with the note subjoined: ^*—“Finds it sufficiently instructed, that the sum due to the deceased James Gemmell, in respect of the business referred to in the first account libelled on, or at least a sum amounting to £16, 17s. 3d. in payment thereof, was paid to him in November or December, 1823, when he put into the hands of Mr Thomas Cranstoun the title-deeds over which he claimed a hypothec for what was so due to him: Finds no evidence produced to instruct that the said James Gemmell ever paid the sum of £25, 16s. 9d. to Mr Thomas Cranstoun, as alleged in the account second libelled on, and in the record, but on the contrary, finds it proved, that that precise sum was paid to Mr Thomas Cranstoun as the expense of preparing the heritable bond to Sir William Forbes and Company, by the said Sir William Forbes and Company, on account of the defender, Duncan Moon: Finds it proved, that during the period from the 3d October, 1823, to 23d November, 1824, in which the account of £42, 10s. 8d., for business, third libelled on, is said to have been incurred, the said James Gemmell held no attorney license: Finds, that during the period from the 30th July, 1824, to 10th May, 1825, being the first part of the time comprehended in the account of £87, 13s. 9d., being for the expenses of the sequestration of the estate of Duncan Moon, and which is the account fourth libelled on, and also between the 1st November, 1825, and the 19th May, 1826, being the expiry of that account, the said James Gemmell had no attorney license: Finds, that from the time when the force of the license obtained on the said 10th May, 1825, expired, which by the 37 Geo. III. c. 90, sec. 28, was on the 1st November, 1825, till the 27th March, 1827, which period comprehends the whole time of the currency of the account of £22, 7s., which is fifth libelled on, the said James Gemmell had no attorney license: Finds, that in so far as the defenders may not on special grounds be barred from insisting, to any extent, on the objection to the competency of the action for judicial business by any party in the right of the said James Gemmell, in respect of his having held no attorney license during the periods above specified, any such action is incompetent in terms of the statute 25 Geo. III. c. 80, and 37 Geo. III. c. 90, sec. 30: Finds that such objection of incompetency was not removed by any thing that is shown to have passed between the said James Gemmell and the solicitor of stamps in April, 1829: Finds that the said Duncan Moon's estate having been under sequestration in the year 1824, and it being admitted that he obtained his discharge on a composition contract, he and his cautioners would, according to the principles adopted by the Court in the cases of Ewing v. Wallace, February 3, 1831, and Atkinson, &c. v. Walls, February 22, 1833, be barred from objecting to any debts, on which specific claims had been made by third parties, and admitted or not objected to in the process of sequestration; but finds, that there is no evidence produced, that any specific claim was made in the sequestration for the debts alleged to be due to the said James Gemmell, for the three first accounts libelled on; and that the random statement of a supposed debt of £40, for which the title-deeds were said to be hypothecated, without any particular account thereof having been exhibited, cannot have the same effect to bar an enquiry into the truth and legality of such alleged claim, more especially in a question with Mr Gemmell, the agent in the sequestration, and the private agent of the bankrupt or his representatives: Finds that the incapacity to sue under the statutes in force at the date of the said process of sequestration, in respect of the party having held no attorney license, would, if the objection were not barred by the proceedings, apply to all charges for business in Court, or directly connected therewith in the process of sequestration, but not to extrajudicial business, by conveyancing or the like, though bearing relation to that process; but finds that the defender, Duncan Moon, having obtained his discharge by a composition contract, and he and his cautioners having become expressly bound by their bond, as an essential condition of such discharge, to pay the expenses of the sequestration, they are barred from objecting generally to the claim founded on the account, which is fourth libelled on, on the ground of the said James Gemmell not having held an attorney license: But finds that they can only be liable for the fair expenses of the process, as they may appear from the account rendered, no liquidation thereof having taken place, and no decree for a precise sum having been pronounced: And, with these findings, appoints the cause to be enrolled, in order that they may be accurately applied to the state of the cause; and, in the meantime, reserves the question of expenses.”

_________________ Footnote _________________

* After referring to the circumstances of the 1st and 2d accounts, the note proceeded:—

“On the question regarding the attorney licenses, the Lord Ordinary has to observe, 1. That it is the imperative duty of the Court to give effect to the statutes, wherever they do truly apply, unless the form of the case be such that the objection comea too late. 2. That he can entertain no doubt that Mr Gemmell placed himself within the operation of the existing statutes in the period specified in the interlocutor; at least, after minute attention to the particulars, he thinks that this is the result, though, if there were any mistake, it might be corrected. 3. That ho can find no ground in the statutes, even with the aid of the 7th Geo. IV., for holding that, by complying with the demand of the solicitor of stamps in 1829, that he should pay £12 for a license at that time, he could bar the objection of a third party, if otherwise well founded. Whatever money he had paid in the beginning of his practice, he had not complied with the statutes in taking out the licenses at the time required. But, in truth, the solicitor of stamps merely proceeded upon Mr Gemmell's own statement, not admitting the correctness of it, but, on the contrary, reserving his right to insist for penalties if the demand were not complied with, and merely consented to forego prosecution if the payment were made. 4. That judicial proceedings in a sequestration were within the meaning of the statutes, but that, before the act 9 Geo. IV. the penal consequences did not apply to extrajudicial business. 5. That whatever might be the Lord Ordinary's opinion with regard to the principles of the case of Robertson v. Strachan, ¹ 12th February, 1825, and 29th June, 1826, he could not withstand the authority of Walls v. Atkinson, ² February 22, 1833, and Ewing v. Wallace, ³ February 3, 1831, and the judgment of the House of Lords in the latter, August 13, 1832. These two cases combined, seem to make out the point, that if a debt has been specifically claimed in a sequestration, and if, on the faith of that, as a just debt, not objected to, a composition contract and discharge have been settled, it is incompetent for the bankrupt or his cautioners afterwards to object to the debt, on the ground that the alleged creditor had no attorney license. But in the present case, the material question is upon the fact. It does not at all appear, at least from the sederunt-book, that Mr Gemmell lodged any specific claim on the accounts libelled on in this action. The vague allusion in the state of the affairs (made up evidently by Mr Gemmell himself) to some claim or other, ‘say £40,' for which the titles are said to be hypothecated, could never be considered as a proper claim of debt, on which a decree, either express or implied, could follow. At any rate, it is not the claim which is made by any of the accounts in this action. In the case of Ewing, there was precise decree for a definite sum. But it is very different here, where there is nothing of the kind; and the objection being statutory, the Lord Ordinary does not see how the Court can refuse effect to it. 6. That the expenses of the sequestration stand in a different situation. Mr Gemmell was the agent in the sequestration, and known by the defenders to be so. But it was an indispensable condition of the contract and discharge that these expenses should be paid; and although the account appears not to have been liquidated, or a decree pronounced for it, it seems impossible, consistently with the principle of the case of Atkinson, to allow any objection of personal disability or general exception to be afterwards raised against the claim by the bankrupt or his cautioners. Hut, supposing the account not to have been produced and audited, the Lord Ordinary sees no ground upon which Mr Gemmell's representatives can just claim whatever account they may make up against the bankrupt. 7. That the last account libelled on is said to have been contracted posterior to the discharge, and consequently that the defenders are not exposed to the same difficulty in regard to it.”

¹ Ante, III. 528 (new ed. 366), and IV. 771 (new ed. 780).

² Ante, XI. 429.

³ Ante, IX. 385.

The pursuers reclaimed, praying to have it found, inter alia, “that the attorney certificate taken out by the said James Gemmell, in May, 1825, was a valid and complete license for the year from 1st November, 1824, to 1st November, 1825, and the certificate taken out by him in March, 1827, a valid and complete license for the year from 1st November, 1826, to 1st November, 1827.”

The defenders also reclaimed against the interlocutor, “in so far as it found that they were barred from objecting to the claim for the expenses of the sequestration.”