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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Robertson or Ross v. Ramsay and walker's Trustees [1877] ScotLR 14_595 (29 June 1877)
URL: http://www.bailii.org/scot/cases/ScotCS/1877/14SLR0595.html
Cite as: [1877] ScotLR 14_595, [1877] SLR 14_595
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SCOTTISH_SLR_Court_of_Session
Page: 595↓
Court of Session Inner House First Division.
[
v.
Facts:
L. advanced a sum of £2000 to R., in consideration of which R. granted his personal bond for £10,000, payable in event of his succeeding in a claim which he was then making to certain landed estates. R. also gave L. an ex facie absolute disposition of the estates, L. granting a back-letter acknowledging that the disposition was granted, inter alia, in security of the bond. Held that the fee of the agent for preparing the bond fell to be regulated by the consideration, viz., £2000, in respect of which it was granted.
In February 1876 the pursuer Andrew Ross Robertson or Andrew Robertson Ross, along with his aunt Mrs Jane Robertson or Macpherson, entered into a transaction with Mr Henry Leck, accountant, Glasgow, whereby the latter advanced to the former the sum of £2000. Mr Robertson Ross and his aunt were at that time claimants to the estate of Shandwick, as nearest heirs-portioners of the last heir in possession of that estate, and the money advanced to them was for the purpose of enabling them to prosecute their claim. The consideration given by them to Mr Leck was a personal bond for the sum of £10,000, which was thus expressed—“We, … In consideration of the sum of two thousand pounds sterling paid to us by Henry Leck, accountant in Glasgow, do hereby bind and oblige ourselves, jointly and severally, and our several and respective heirs, executors, and successors, without the necessity of discussing them in their order, to make payment to the said Henry Leck, and his heirs and executors or assignees, of the sum of ten thousand pounds sterling, and that so soon as and at the date that we or either of us shall succeed to the said estate of Shandwick, in the county of Ross, with a fifth part more of the foresaid principal sum of liquidate penalty in case of failure, and the interest of said principal sum of ten thousand pounds sterling at the rate of five pounds per centum per annum from the date of said succession until paid.” They further granted an ex facie absolute disposition of one-half pro indiviso of the estates of Shandwick; and Mr Leck, on his part, gave them a back-letter acknowledging that the disposition was granted, inter alia, in security for the bond of £10,000.
Messrs Walker & Ramsay, writers, Glasgow, acted as agents for both parties in carrying out the transaction. Their account for law charges against the pursuer in this matter amounted to £100,14s. 6d., but they accepted £90 from him as full payment, £10, 14s. 6d. being deducted as discount. The account was not taxed or examined in any way. The charge for the preparation of the bond above-mentioned was made on an ad valorem scale, and amounted to £73, 10s.
The pursuer alleged that there had been an overcharge for the preparation of the bond, and that according to the table of fees applicable to and binding on Edinburgh and Glasgow agents the charge ought to have been £3, 3s., calculated in accordance with the table, upon the consideration of £2000 given for the bond. He sued for repetition of the balance between £90 and the sum he admitted he was liable to pay.
The defenders, William Ramsay and the trustees of Matthew Walker, the only other partner along with William Ramsay of the firm of Walker & Ramsay, averred—“(Cond. 2) By the existing table of fees there is no ad valorem fee allowed to the agent who prepares a personal bond unless security is given. In the present case a disposition of half the estate of Shandwick was given in security of the personal bond. The two deeds were part of the same transaction. … The agents in the transaction might, instead of charging as they have done, have charged regulation fees for the bond, and ad valorem fees for the disposition; but the result would not have been more favourable for the pursuer. In the most favourable case for the pursuer the ad valorem fee would have been on a sum of £10,000, which was the sum repayable to Mr Leck.”
The Lord Ordinary remitted to the Auditor of the Court of Session to audit the defenders' account. The Auditor having reported that the fees of the agents should be regulated by the consideration in respect of which the bond was granted, the Lord Ordinary gave decree against the defenders, and added the following note:—
“ Note.— … The principle on which the account was framed was to charge the expense of the transaction against the pursuer and Mrs Macpherson as if they were the borrowers of £10,000, according to the rule that a borrower pays the expense of the loan.
“The Lord Ordinary remitted the account to Mr Baxter, the Auditor of the Court, for his report, and he has reported that the fees of the agents should be regulated by the consideration in respect of which the bond was granted. The Lord Ordinary agrees with him. The transaction in truth was not a loan, but a purchase; and in the case of a purchase the ad valorem fee is charged on the price.
“The defenders urged that as the transaction was settled between them and the pursuer the latter is not entitled to re-open it. The Lord Ordinary cannot adopt that view. The defenders had a duty to discharge to the pursuer in seeing that the account was charged according to the proper principle. They have, in the opinion of the Lord Ordinary, made a gross overcharge, and it would be very inequitable to allow them to retain the benefit of it. The Lord Ordinary desires it to be understood that he has no doubt that the defenders believed that they were entitled to make the charge; but they cannot, it is thought, profit by their own mistake.”
The defenders reclaimed.
At advising—
In order to determine whether there is an overcharge or not, it is necessary to examine the nature of the transaction which the defenders
Page: 596↓
The account before us is charged on the principle that the matter to be dealt with was a personal bond with an heritable security for £10,000, and if that be the right view of it, an ad valorem fee, which is the charge made, is the proper one. The Lord Ordinary made a remit to the Auditor of Court, and has now adopted the view reported to him, that the transaction was not one of loan, but of purchase, and that Mr Leck bought from the pursuer and his aunt a chance of obtaining £10,000 for a present payment of £2000. I confess I do not care much what the nature of the transaction is. It must be either a loan or a sale, if it is a legitimate transaction at all. I may say it appears to me to look very like a bet, and perhaps that is another aspect of it. I am very clearly of opinion, with the Lord Ordinary, that according to the rule in the table of fees now in use the consideration is the proper sum upon which to charge the valorem fee.
It was very ingeniously argued that the responsibility of the agents was not limited to £2000, but that it might amount to £10,000. There would be a great deal of force in that contention if the holder of the bond were secured with what would at some future date for certain be worth £10,000. But here the chance was all the lender got, and although the agent's liability might be for £10,000 in the event of their being guilty of crassa negligentia, yet in another view it might be nil. I therefore see no reason to doubt that the conclusion to which the Auditor and the Lord Ordinary have come is quite right.
The Court adhered.
Counsel for Pursuer— Nevay — J. A. Reid. Agent— A. Nivison, S.S.
Counsel for Defenders — Asher—M'Kechnie. Agents— Ronald & Ritchie, S.S.C.