Scottish Court of Session Decisions

At advising—

Lord President—The sum here sued for is said to be due under an agreement between the pursuers and defenders which was concluded for the purpose of settling a previous action of accounting between these parties. The sum agreed to be paid was £4250, and it was also a part of the arrangement that to provide that sum or a portion of it certain house property was to be sold in Rangoon.

It is stated that a power of attorney having been sent out to Rangoon the property was brought to sale, and the amount of the sales and the amount of rents realised the sum of Rs.32,099: 15: 6. “This sum,” the pursuers state, “at ls. 8d. per rupee—which is the current rate of exchange—amounts to £2675 sterling.”

The defenders' explanation is that they have always been willing to settle with the pursuers upon the footing of the rupee being estimated as of the value of 2s., which is its value in Rangoon. The ground upon which the defenders maintain that contention is, that under the contract the locus solutionis was India. I do not think it rests upon any other basis than that. So that a question is raised upon the construction and effect of the contract between the parties, what is the locus solutionis? If it be not India the defenders are wrong.

Although at first sight I had an impression that as regards the proCeeds of the sale at Rangoon the contract was one which fell to be performed in India, I am now satisfied upon a review of the clauses of the contract that Scotland is the place of performance. The contract is a settlement of a compromise of an action in this Court, and the subject-matter of it is that for a discharge of their liabilities the defenders shall pay a sum of £4250. If that sum be not paid within a year, it is stipulated that the former claims shall revive, and may be again insisted in; but if it be paid within a year, then the defenders are to be entitled to a discharge, and all imputations made against them upon record are to be withdrawn. There is a further point which I think is ancillary or subsidiary. It consists in the stipulation that the defenders shall give a power of attorney to the pursuers' agents in Rangoon to bring certain properties to sale, to realise these, and impute them pro tanto in payment of the sum in question. It is contemplated that the properties may sell for a sum large enough to meet the whole debt, but that it may also fall short of it. But in either event the condition is that the sum in question is to be paid within a year from the date of the agreement.

The settlement of the account under that agreement must be in Scotland, and consequently Scotland is the locus solutionis.

Lord Deas—If I were satisfied that the locus solutionis of this contract was in Scotland, I should agree with your Lordship. But it appears to me that on the face of it the locus solutionis is in Rangoon, and consequently that the law of Rangoon must apply. I think this agreement is in substance and effect the same thing as if a bill payable in Rangoon had been granted for the sum mentioned. The authorities, I think, go to show that a bill payable in Rangoon would be paid in rupees according to the value current at Rangoon. Although I am not at this moment prepared to go into the authorities, I have always understood since I had occasion to examine them, as discussed in the case of Don v. Lippman (H. of L.), 2 S. and M. 732, that a bill payable in a foreign country fell to be met in the currency of that country. I cannot distinguish between that case and the present, and I think the law laid down there is applicable.

I may say that the case of Glyn v. Johnston, June 8, 1830, 8 S. 889, was considered to raise a question of what belonged to the law regulating the nature of the debt itself and what to that regulating the remedy. The Court held that the kind of evidence admissible fell to be determined by the law of England. That judgment followed upon a hearing in presence. Lord Craigie dissented from the judgment, but from the remarks made upon that case by Lord Brougham in deciding Don v. Lippman it appeared that Lord Craigie had been right in the view which he had taken.

Lord Mure—I agree with your Lordship in the Chair that the interlocutor of the Lord Ordinary should be adhered to. I think that we are dealing with a Scotch contract, and that the pursuers are entitled to be paid in Scotch currency. The contract was made in Scotland. Both parties were in Scotland so far as regarded the settlement of the questions at issue between them in the Scotch Courts. Provision is made in the agreement for a revival of the claims. Where that is done in Scotland with reference to an action depending in the Scotch Courts, one would think that the locus solutionis was in Scotland. If nothing had been said about Rangoon, it is quite plain that Scotland would have been the locus solutionis. But the provisions as to realising the properties in Rangoon are said to make Rangoon the place of payment. By the second clause of the contract a power is given to sell certain properties in Rangoon, the proceeds of which are to be paid to and retained by certain parties there on the pursuers' behalf. In the event of the properties not realising the £4250, the deficiency is to be made up by the defenders. Supposing the proceeds had not realised the required sum, it is quite clear that they would require to have been paid in the current coin of this country. I cannot hold that Rangoon is the locus solutionis of this contract.

Lord Shand—In the view which I take of this case it is quite immaterial what place is the true locus solutionis, for I think that the judgment must be the same in either case. But I agree with Lord Deas that the place of payment of the proceeds of the Rangoon property is Rangoon, and the place of payment of the balance is this country. So that the pursuers are entitled to payment of the full equivalent in Rangoon money to the English currency, otherwise the defenders will get an advantage in the settlement to which they are not entitled.