Scottish Court of Session Decisions

This case came up by reclaiming note against an interlocutor of the Lord Ordinary (Mackenzie). The summons, containing warrant to arrest, was dated 3d March 1873. The pursuers are glass-bottle manufacturers in London, and the defender is a practical chemist and oil merchant in Glasgow. The conclusions of the summons were for payment of two sums of £70, 9s. 6d. and £65, 11s. 10d., with interest as from 8th October 1871 till payment, but subject to deduction of two sums of £7, 17s. 6d. and £8, 7s. The pursuers averred that, by bill of exchange, dated 5th June 1871, they ordered the defender to pay them or their order, four months after date, the sum of £70, 9s. 6d. for value, and by another bill of exchange, dated 1st September 1871, they in like manner ordered him, four months after date, to pay them the sum of £55, 11s. 10d. for value. The defender duly accepted both of these bills, and they were dishonoured at maturity. The total amount of the two bills is thus £126, 1s. 4d. The defender made a payment of £7, 17s. 10d. on 31st May 1872, and another payment of £8, 7s. on 4th November 1872, on account of the principal sum contained in these bills, and the two sums of £70, 9s. 6d. and £55, 11s. 10d. were said to be due by the defender to the pursuers under deduction of the two partial payments of £7, 17s. 10d. and £8, 7s. The defender also owed to the pursuers the interest on these sums from the respective dates of the bills falling due, at the rate of 5 per cent. per annum. These claims the pursuers stated that the defender would not acknowledge. Further, Yuille's estates were sequestrated on 20th September 1871, before the bills in question fell due, and at the meeting of creditors held on the 9th day of October thereafter, for the election of a trustee, it was unanimously resolved that the estates should be wound up under a deed of arrangement, and that an application should be presented to the Sheriff to sist procedure in the sequestration for a period not exceeding two months from the date of the meeting. That resolution having been

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reported to the Sheriff in terms of the statute, he found that it had been duly carried, and he sisted procedure accordingly. Within the period of the sist there was produced to the Sheriff a deed of arrangement entered into and executed between the defender on the one part, and the creditors or mandatories for creditors of the defender therein named and designed (among whom, according to the defender's statements, were the pursuers), constituting in all four-fifths in number and value of the creditors, on the other part, by which it was arranged and agreed that the defender should pay as at the date of the sequestration of his estates a composition of 4s. per pound sterling on the respective debts due to his creditors, and that in three equal instalments, payable at four, eight, and twelve months respectively from the date of the deed of arrangement being approved of by the Sheriff, and the sequestration declared at an end. And the creditors on the other part accepted this composition, payable as aforesaid. The defender also bound himself to grant promissory-notes for the instalments of composition in favour of his creditors, when required by them to do so. This deed of arrangement was found duly entered into and executed, and to be reasonable, and was approved of by the Sheriff, and the sequestration was declared at an end. The interlocutor of the Sheriff is dated 8th January 1872, and became final on the 17th of that month. The amount claimed by the pursuers against the defender, conform to their affidavit lodged in the process of sequestration, was £125, 4s. 8d., the composition on which amounted to £25, 1s., payable in three sums of £8, 7s. each. The defender stated that in implement of obligation he had paid the pursuers the first two of these instalments, and had also been all along willing and ready to pay the third and last instalment, but the same was never asked, and the pursuers did not acknowledge receipt of the second instalment. Immediately after this action was raised the defender tendered payment of the third instalment to the pursuers, but it was refused. The defender consigned £8, 7s., with interest thereon since it fell due. The defender was never asked to grant bills for the composition. The bills sued on, he averred, were not the property nor in the possession of the pursuers when this action was raised. They were lodged in the sequestration process, which is in the custody of the sheriff-clerk at Glasgow, from whom they were borrowed on the 19th day of March 1873. They are the property of the defender, and should have been delivered up to him as his documents when the deed of arrangement was approved of by the Sheriff. A copy of the foresaid deed of arrangement and a certified copy of the interlocutor of the Sheriff of Lanarkshire, were produced. These statements on the defender's part were denied by the pursuers, who averred that they were no parties to the arrangement, and that the deed was not signed by them or by any one authorised by them, the signer having no such authority.

The pursuers pleaded—“(1) The defender being justly indebted and resting-owing to the pursuers in the said principal sums and interest, under deduction as aforesaid, they are entitled to decree against him therefor, with expenses as concluded for. (2) The defender's statements are not relevant or sufficient to sustain his pleas in defence. (3) The deed of arrangement founded on in the defences is of no effect against the pursuers, in respect that they were no parties thereto, and that the same was not signed by any one having their authority. (4) Separatim, the signature of Thomas Landells Selkirk is not effectual against the pursuers, in respect that the said Thomas Landells Selkirk was an instrumentary witness to the signatures of other parties to the deed. (5) Assuming the said deed of arrangement to have been originally binding and effectual against the pursuers, the defender has lost the benefit thereof by his failure to pay the instalments of composition in terms of the said deed. (6) Generally, in the circumstances above set forth, the pursuers are entitled to decree with expenses, in terms of the conclusions of the summons.”

The defender pleaded—“(1) The action is excluded by the deed of arrangement referred to, and ought to be dismissed, with expenses. (2) The defender, having carried out the said deed of arrangement, ought to be assoilzied, with expenses. (3) The action having been unnecessary and uncalled for, and being oppressive, the same should be dismissed. (4) The defender not being indebted to the pursuers to any greater extent than the sum consigned, he ought to be assoilzied, with expenses.”