Scottish Court of Session Decisions

This was an action at the instance of the Life Association of Scotland against John Campbell Smith, Sheriff-Substitute of Forfarshire at Dundee; Patrick Don Swan, Provost of Kirkcaldy; and William Andrew Douglas, merchant, Dundee, executor-dative of the deceased Andrew Douglas,

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conjunctly and severally or otherwise severally, for payment of the sum of £6868, 14s., being the balance alleged to be resting-owing by the defenders of a bond for £15,000, which they along with certain other persons had subscribed as co-obligants. The bond in question was for money to be advanced to the Athole Hydropathic Company, Limited, of which the obligants were directors. The original amount contained in the bond, viz., £15,000, had been reduced by payments to account made by the other co-obligants. Defences were lodged for Campbell Smith and Douglas’ executor.

The present question related to the liability of the executor of Mr Douglas, in regard to which the following were the facts:—The bond in question was signed by Mr Douglas on 11th May, and then handed to the secretary of the Hydropathic Company who held the bond, and was in course of having it executed when Mr Douglas died on 4th July. The bond was not delivered to the lenders, the pursuers in this action, until 24th July. Prior to that date Mr Douglas’ agent interpelled the secretary of the Hydropathic Company from proceeding further, and intimated that nothing was to be done to increase Mr Douglas’ liability in the matter.

The defender Douglas pleaded—“(1) The defender William Andrew Douglas is not liable to the conclusion of the action, in respect (1st) that the said Andrew Douglas died, and separatim his death was known prior to the completion and delivery of the bond; (2d) That the bond was delivered without the authority and contrary to the instructions of the said Andrew Douglas or his representatives.”

The Lord Ordinary ( Kinnear) on 27th March 1886 assoilzied the defender Douglas.

“ Note.—The case against the representatives of Mr Andrew Douglas is based exclusively upon his subscription of a bond which was admittedly not delivered until after his death. For the averment is that the money was advanced ‘in exchange for the bond’ on the 24th of July, and Mr Douglas died on the 4th. It is not alleged that he had contracted any obligation either to the pursuers or to his co-directors otherwise than by his subscription of the bond. The pursuer's case therefore is that the mere subscription of a deceased person to a bond will bind his representatives in repayment of money advanced to other persons after his death. It appears to me to be a sufficient answer that in a question with his representatives the bond must be considered as undelivered, for it was not delivered by him, and any authority which he might have given to an agent to deliver it would fall by his death. I should have thought the pursuers' averments therefore irrelevant independently of the special case stated in answer by the defenders. But they aver that the bond after being subscribed by the deceased was left in the hands of the secretary of the company for the purpose of getting it executed, and it may be assumed that he had a mandate from Mr Douglas, as well as from the other directors, to deliver it in exchange for the money advanced by the pursuers; but so far as Mr Douglas was concerned the mandate was revoked by the letters of his agent Mr Thomson, for Mr Thomson intimates at a time when no liability had been incurred by Mr Douglas—because the bond had not been delivered nor the money advanced—that ‘nothing is to be done to increase Mr Douglas’ liability in this matter.’ Now, it is clear that, notwithstanding his subscription of the bond, Mr Douglas was entitled to withdraw from the contemplated obligation at any time before a binding contract was completed by delivery of the bond in exchange for the money. And I think Mr Thomson's letter was a very distinct intimation that the secretary of the company was not to fix Mr Douglas with a liability which had not as yet attached by the delivery of the bond bearing his subscription.

It is not suggested that the bond was delivered by anyone but the secretary, or that anyone else had a mandate to deliver it on Mr Douglas’ behalf. I think the secretary's mandate was expressly recalled. But if it were not recalled expressly, it fell by the death of the mandant.

It is said that if the contract was not completed Mr Douglas’ subscription was equivalent to an offer which might be accepted after his death as against his representatives. An unaccepted offer will fall like any other authority by the death of the party making it. But it is not said that the offer was made in any other way than by delivery of the subscribed bond, and the question therefore comes back to the point already considered, viz.,—Whether the bond was delivered on behalf of Mr Douglas or his representatives by virtue of any subsisting mandate.

The question whether Mr Smith will be relieved by the release of Mr Douglas’ representatives may depend upon matters of fact, as to which the parties are not agreed.”

The pursuers reclaimed, and argued—The bond was delivered before Douglas’ death in the only way in which it would ever have been delivered even if Douglas had lived, viz., by signing it, and passing it on to be signed by the next person. There was no reason why a bond should not be delivered quoad one of the persons subscribing, and yet not delivered quoad another.— M'Donald, July 5, 1810, F.C.; Paterson v. Bonar, March 9, 1844, 6 D. 987; Mair v. Thorn's Trustees, Feb. 20, 1850, 6 D. 748; Scottish Provincial Assurance Co. v. Pringle, Jan. 28, 1858, 20 D. 465; Simpson v. Fleming, Feb. 3, 1860, 22 D. 679.

Counsel for the respondents were not called on.