Scottish Court of Session Decisions

This case arose out of a note of suspension presented to the Court at the instance of John Napier, Eglinton, Irvine, against James Graham, coalmaster in Glasgow. The note set forth that the complainer Mr Napier had been charged to make payment to the respondent—(1) of the sum of £100 sterling, with interest, due by a bill drawn by James Graham upon and accepted by the complainer, dated the 15th day of January 1873, and payable three months after date; and (2) of another sum of £100 sterling, with interest, due by another bill of the same date, similarly drawn and accepted, and payable four months after date.

The complainer averred that on 15th January 1873 he accepted two bills drawn upon him by the charger for £100 each, both dated that day, the one payable three and the other four months after date, and that these bills were given for the charger's accommodation, he, Mr Napier, receiving no value for them, and that he was not and is not indebted to the charger in these sums. On receiving the bills, Mr Graham stated that he would get them discounted at a bank in Glasgow, and engaged to retire them when due. It was admitted, in answer, that Mr Napier accepted the bills drawn upon him by the respondent, being the bills charged on. But the other statements were denied, and it was averred that the bills were accepted for value received by the complainer. Further, the complainer said that on the 25th of January 1873 Graham called upon him and stated that he had been unable to get the bills discounted in Glasgow, and that he found that £160 would meet his present wants, and he asked for a loan of that sum. The complainer declined, but eventually, on 27th January, to accommodate the charger, he accepted two other bills to him, the one for £100 and the other for £60, and payable at three and four months’ date respectively. When he received these two bills, the charger mentioned that he had left the other two bills for £100 each in Glasgow, but he stated he would cancel them. The two bills for £100 and £60 which the complainer accepted on 27th January were discounted by the charger, and were both retired by him when they arrived at maturity. But instead of cancelling the two bills of 15th January for £100, the charger protested them, and gave the present charges thereon. The charger (respondent) admitted that the bills had been protested, and the complainer charged, but denied the other statements. Finally, the complainer referred the facts and circumstances in connection with these transactions to the charger's oath.

The complainer pleaded—“(1) The reference to the charger's oath ought to be sustained. (2) The complainer having received no value for the bills charged on, and the same having been granted for the charger's accommodation, the complainer is entitled to have said charges suspended. (3) The complainer not being indebted to the charger in the contents of the said bills, or any part thereof, the charges complained of should be suspended, and the charger found liable in expenses. (4) In the circumstances of the present case, and looking to the terms of the deposition made by the charger in the reference, the complainer is entitled to a proof prout de jure of his averments.”

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The respondent pleaded—“(1) The oath of the respondent is the only competent means of instructing that the bills were not accepted for value. (2) The averments of the complainer being unfounded in fact, the note should be refused, with expenses. (3) The bills having been accepted for value, and the charge having been regularly given, the note should be refused, with expenses.”

The Lord Ordinary ( Shand), by interlocutor of 2d August 1873, sustained the reference to the charger's oath, and thereafter the Lord Ordinary on the Bills ( Gifford) pronounced the following interlocutor and note:—

“ Edinburgh, 28 th August 1873.—The Lord Ordinary officiating on the Bills having considered the note of suspension and answers, report of the deposition of the charger on the reference to his oath, and whole process, on caution passes the note of suspension.

Note.—The Lord Ordinary is of opinion that the terms of the charger's deposition in the reference are not such as to entitle him to have the note of suspension at once refused; and as the suspender offers caution, the Lord Ordinary thinks that the note should be passed on caution.

There are clerical errors in the report of the deposition which should be corrected; the word ‘charger’ being used in the whole latter part of the deposition instead of complainer; but assuming this to be corrected, the oath does not prove that the complainer is due the charger the sums charged for. No money passed when the bills were granted; nor were they granted upon any settlement of accounts between the parties, nor as any acknowledgment of debt or balance due. No doubt the charger says that the complainer is due to him a larger amount than that in the bills, but then he admits that he cannot tell what the debt is; and part of it consisted in advances for Riggend Colliery, the charger admitting that it was never settled whether he himself was not the tenant of that colliery. Then there were the bills of 27th January, accepted by the charger to the suspender, but the proceeds of which the charger admits having received; and lastly, there is the agreement between the charger and the complainer's son, dated 14th May 1873, which seems to have been acted on, and under which the charger admits that the two bills now charged on were agreed to be delivered up.

On the whole, the Lord Ordinary thinks that the questions between the complainer and charger really resolve into a count and reckoning, and as the suspender offers caution for the sums charged for if really due, the charger can ask no more.

The bills charged on, though called for, have not been produced, and this alone would necessitate the passing of the note.”

The record having been closed, the case was sent to the Procedure Roll, and ultimately the Lord Ordinary ( Shand) pronounced the following interlocutor.

“ Edinburgh, 12 th January 1874—The Lord Ordinary having considered the cause, with the oath on reference emitted by the charger, finds that in May last, 1873, at a meeting between the charger and the complainer's son, the agreement No. 14 of process was entered into, and that it was understood and agreed that the bills to be destroyed, and therein referred to, included bills to which the complainer was a party: Finds that, in respect of the agreement thus entered into on the terms stated by the charger, the complainer destroyed an I O U in his favour for £2500, by his son James Napier and the charger: Finds that, in terms of said agreement, the charger became bound to destroy the bills charged on, and that in any view he is not entitled to do summary diligence thereon: Therefore, finds the said oath affirmative of the reference, and suspends the charges complained of, and whole grounds and warrants thereof, and decerns; Finds the respondent liable in expenses: Allows an account thereof, &c.

Note—In the note of suspension the complainer referred to the oath of the charger ‘the whole facts and circumstances in connection with’ the bills in question, and the Lord Ordinary is of opinion that the charger has admitted facts under the reference which preclude him from proceeding farther with the diligence complained of.

There is considerable room for holding, as maintained for the suspender on the terms of the charger's oath, that the charger's statements constitute an admission that the complainer received no value for his acceptance of the bills in question. There was no account made up when the bills were accepted. The charger says the bills were given on account of advances made by him, ‘some of them indirectly to Mr Napier, and for the business in which he was interested’ alluding to the Riggend Colliery as the business referred to; and taking the statements in the oath as a whole, there is much ground for the contention that the charger has admitted that he and the suspender's son were the parties truly interested in the Riggend Colliery until some months after the date of the bills in question, when the complainer took it over.

The Lord, Ordinary has thought it unnecessary, however, to make up his mind on this question, for he entartains a clear opinion that, apart from this question, the charger has admitted an agreement which precludes the use he now attempts to make of the bills charged on. The agreement referred to, which is made part of the deposition, contains an obligation to destroy all bills between the parties to it. It is admitted that though in terms this obligation would include only bills by James Napier and the charger, it was intended and agreed to apply to bills to which the complainer was a party; and it is matter of obvious inference that in entering into it James Napier was acting also for his father, the complainer, for he undertook to have the I O U for £2500, in which his father was the creditor, destroyed also. The charger states that the I O U was then destroyed. Yet, two months afterwards, he proceeded with diligence on the bills in question, which in the meantime he got up from the banker with whom they had been deposited. The Lord Ordinary is of opinion that this proceeding is entirely against the faith of the admitted agreement. The counsel for the charger maintained that this proceeding was competent and justifiable, because, according to the terms of the deposition, the suspender had undertaken ‘to settle all money matters’ with the charger, or, as it is expressed in another passage, ‘to square up all matters connected with the Riggend Colliery, and pay all money that was due to me;’ and it was said to be enough that the charger now deponed that the complainer has never settled up with me yet,’ and that the contents of bills in question, and more, was due to him. The Lord Ordinary cannot adopt this view. He thinks summary diligence is out of the question after the arrangement between the parties: but he is further of opinion, that the true arrangement,

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as disclosed by the terms of the oath, with the destruction at the time of the I O U, on which the charger was bound for £2500, was, that both parties were to destroy the written obligations they held from each other, and that the complainer was to pay any balance which was due by him on an accounting in connection with Riggend Colliery. Under this obligation, the charger's remedy is an action for payment when he has made up his account, if he can show a balance due; but be cannot enforce payment of bills which he ought to have destroyed.

At the debate the Lord Ordinary alluded to the absence of any statement in regard to the agreement on which judgment has now been given on the record as made up and closed on the passed note. He is of opinion that, under the general terms of the reference, it was competent to examine the charger as to this agreement, to which the charger was himself a party; but he thinks it should have been set forth in the note, and, at all events, in the closed record. The matter is one, however, on which the charger cannot plead that he was taken by surprise; and the Lord Ordinary has felt himself entitled, even in the absence of a special statement on the record, to proceed on the agreement, as its existence has been fully admitted by the charger himself.”

Against this interlocutor the respondent reclaimed

The following authorities were referred to— Stair, 4, 44, 18, (More's Notes, 418); Greig v. Boyd, 8 S. 382; Mather v. Nisbet, 16th Dec. 1837, 16 S. 258; Macfarlane v. Watt, 6 S. 1095; Phœnix Fire Insurance Go. v. Young, 10th July 1834, 12 S. 921; Soutar v. Soutar, 14 D. 140.

At advising—