Scottish Court of Session Decisions

You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Susp. - Morgan v. Morgan [1866] ScotLR 1_117 (20 January 1866)
URL: http://www.bailii.org/scot/cases/ScotCS/1866/01SLR0117.html
Cite as: [1866] SLR 1_117, [1866] ScotLR 1_117

[New search] [Contents list] [Printable PDF version] [Help]

SCOTTISH_SLR_Court_of_Session

Page: 117↓

Court of Session Inner House First Division.

1 SLR 117

Susp.—Morgan

v.

Morgan.

Subject_1Promissory-note
Subject_2Stamp.

Facts:

Terms of two documents which held (aff. Lord Kinloch) not to be promissory-notes.

Headnote:

The question in this case was, whether the following two documents were promissory-notes. It was pleaded that they were, and could not therefore now be stamped. Lord Kinloch held that they were not promissory-notes, but that they were documents requiring to be stamped, and he sisted process that this might be done.

The one document is in the following terms:—

“Dear Will,—I have borrowed from you one thousand pounds sterling, which I hereby bind and oblige myself to repay to you at Whitsunday next, with interest at the rate which shall be paid on money lent upon first heritable security. And I also engage to grant you, if required, satisfactory heritable security for the above sum.—I remain,” &c.

And the other is as follows:—

“Dear Will,—I was favoured with your letter of yesterday prefixing letter of credit on the Western Bank for three hundred and ninety-seven pounds, which, with the interest due to you at last Whitsunday by the Mumrill's family, and the interest thereon since that date, makes up five hundred pounds which I have received in loan from you, to be repaid in December next, but hope you wont be too strict as to the time of repayment, as it will depend much upon the price of Clydesdale Bank stock, as I am averse to sell at present prices.—Yours truly.”

The suspender reclaimed, and argued that the documents had all the requisites of promissory-notes—viz. (1), a promise to pay; (2) the name of a payee; and (3) a definite term of payment. The case of Macfarlane v. Johnstone and others, 11th June 1864 ( 2 Macph. 1210), and other cases, were founded on.

The Court adhered.

Judgment:

The Lord President said—We must look at the whole character of these documents, and, doing so, it appears to me that neither of them was given as a promissory-note. They are acknowledgments of debt with an obligation to repay.

Lord Curriehill—I am very clear that the first of these two documents is a bond, and not a promissory-note. It requires a bond stamp. The question about the other is more nice, but I think it is just an acknowledgment of a loan. The true import of the letter is that the writer of it will repay the loan “in December next,” if he could not agree with his creditor that the period of payment should be extended. There is, however, a proposal that the term should be extended, and that takes from the document the character of a promissory-note, which is a liquid document. This letter contemplated a future agreement.

Lord Deas also concurred as to both documents. What he proceeded upon in the case of the second was the fact that there was not in it a definite period of payment. There was no day in December named. When, therefore, could it be protested? It was quite true that in Macfarlane v. Johnstone and others, the period of payment was just as indefinite; but his Lordship thought that this fact must have been overlooked in the decision by the Judges, because the Lord Justice-Clerk distinctly laid down that one of the essentials of a promissory-note was that it should be payable “at a particular date,” and Lord Neaves in the same way said that it was necessary that the time of payment must be “definitely ascertained or ascertainable from the document itself.” But farther, the letter is one acknowledging receipt of a letter of credit, and could never be held to have the privileges of a promissory-note, in respect of which privileges the stamp duty is imposed.

Lord Ardmillan concurred. The first document was a personal obligation, with an intrinsic engagement to convert it into an heritable security. The second was not a promissory-note, because it had no definite date.

Counsel:

Counsel for Suspender— Mr Clark and Mr Birnie. Agents— Messrs G. & J. Binny, W.S.

Counsel for Respondent— Mr Adam. Agent— Mr Alexander Howe, W.S.
1866

About BAILII - FAQ - Copyright Policy - Disclaimers - Privacy Policy amended on 25/11/2010