Scottish Court of Session Decisions

This was an action at the instance of Mrs Margaret Thomson against Dr Robert Bell for payment of £426, as the unpaid balance of sums which she alleged she had lent to the defender.

The pursuer averred that the defender, who was the inventor of a patent liniment, had pressed her to become his partner in the sale of the liniment; that she had refused to enter into any such partnership, but had agreed to assist the defender with advances of money, and had lent him £520, of which the amount sued for was still unpaid.

The defender denied indebtedness.

The pursuer was allowed a proof of her averments habili modo, and the defender a conjunct probation.

On 9th January 1894 the Lord Ordinary decerned against the defender for payment to the pursuer of £387, 14s. 4d.

The defender reclaimed, and at the hearing in the Inner House it was noticed by the Court that certain of the documents founded on by the parties were unstamped. The case was accordingly continued in order that the parties might consider whether these documents might be legally

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stamped after execution, and which of them they desired to tender in evidence.

Upon the case being again called, the pursuer stated that she desired to tender two unstamped documents in evidence.

The first of these documents was a holograph letter dated 10th November 1885, addressed by the defender to the pursuer's husband, which the pursuer alleged expressed the understanding upon which she had advanced money to the defender. It was in these terms—“I would like if you could let me have £50 within the next week, as everything is now ready for advertising, and it must be gone ahead with at once. I would propose you pay £50 in two instalments, and after ten instalments of £40. This will give you one-fifth of the interest in the liniment, and I will agree to pay you back all you put into the company, with 5 per cent added at the end of five years if you desire it, which I am very certain you will not. There is a clear profit of 9d. on each bottle. Yours sincerely, Robert Bell.”

The second document was in these terms —“1st October 1886. Received with thanks, £500 in all for advertising Ertell's Liniment. Robert Bell.”

The defender objected that these documents could not legally be stamped after execution, and being unstamped, could not be received in evidence.

The Stamp Act 1870, section 8, provided— “Except where express provision to the contrary is made by this or any other Act, (1) An instrument containing or relating to several distinct matters is to be separately and distinctly charged, as if it were a separate instrument, with duty in respect of each of such matters.”

Section 49 provided—“(1) The term ‘promissory-note’ means and includes any document or writing (except a banknote) containing a promise to pay any sum of money. (2) A note promising the payment of any sum of money out of any particular fund which may or may not be available, or upon any condition or contingency which may or may not be performed or happen, is to be deemed, for the purposes of this Act, a promissory-note for the said sum of money.”

By section 53 it was provided (1) that where a promissory-note had been written on material bearing an impressed stamp of sufficient amount but improper denomination, it might be stamped on certain conditions, but (2) that except as aforesaid no promissory-note should be stamped with an impressed stamp after execution.

Section 120 enacted—“The term ‘receipt’ means and includes any note, memorandum, or writing whatsoever whereby any money amounting to two pounds or upwards, or any bill of exchange or promissory-note for money amounting to two pounds or upwards, is acknowledged or expressed to have been received, deposited, or paid, or whereby any debt or demand, or any part of a debt or demand, of the amount of two pounds or upwards is acknowledged to have been settled, satisfied, or discharged, or which signifies or imports any such acknowledgment.” …

Section 122 provided that a receipt given without being stamped might be stamped with an impressed stamp within fourteen days upon certain conditions, and after fourteen days but within a month upon certain other conditions, but in no other case.

The schedule to the Act imposed a duty of 6d. in the case of an “Agreement or any Memorandum of Agreement … made in Scotland without any clause of registration, and not otherwise specifically charged with any duty, whether the same be only evidence of a contract, or obligatory upon the parties from its being a written instrument.”

Section 14 of the Stamp Act 1891 (54 and 55 Vict. cap. 39), which substantially reenacts the provisions of section 16 of the Act of 1870, provides—“(1) Upon the production of an instrument chargeable with any duty as evidence in any court of civil judicature in any part of the United Kingdom … notice shall be taken by the judge … of any omission or insufficiency of the stamp thereon, and if the instrument is one which may legally be stamped after the execution thereof, it may, on payment to the officer of court whose duty it is to read the instrument, … of the amount of the unpaid duty, and the penalty payable on stamping the same, and of a further sum of one pound, be received in evidence, saving all just exceptions on other grounds.”

Section 15, which substantially re-enacts the provisions contained in section 15 of the prior Act, provides —“(1) Save where other express provision is in this Act made, any unstamped or insufficiently stamped instrument may be stamped after the execution thereof on payment of the unpaid duty and a penalty of ten pounds.” …

Argued for the defender—(1) The document dated 10th November 1885 was a promissory-note in the sense of section 49 of the Stamp Act 1870. For revenue purposes the definition contained in that section took the place of the definition of a promissory-note contained in section 83 of the Bills of Exchange Act 1882 (45 and 46 Vict. cap. 61). The writer of the letter promised or agreed to pay on demand a definite sum of money, and the document thus contained all the essentials of a promissory-note. It was not an agreement, for it was a unilateral document binding the party to whom it was addressed to nothing. On the most favourable construction for the pursuer the document was composite, containing another undertaking in addition to the promise to pay, but the only effect of that was that it should have had another stamp besides the stamp for the promissory-note—Stamp Act 1870, section 8. So far as it was a promissory-note it could not legally be stamped after execution, and being unstamped could not be received in evidence. (2) The other document was clearly a receipt in the sense of section 120 of the Act of 1870, and could not therefore be after-stamped. The adjection of the words “for advertising Ertell's Liniment,” explaining

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the object for which the money had been received, did not change the character of the document, which was nothing else than an acknowledgment of money received. The section was clearly not restricted in its application to receipts granted for money paid in discharge of debt. The case of Welsh's Trustees v. Forbes relied on by the other side was not an authority to the contrary, for the terms of the document there under consideration were different, and it was treated as a mere acknowledgment of indebtedness. Further, that decision was only supported by the authority of three judges against two.

The pursuer argued—(1) The letter of 10th November 1885 was not a promissory-note. It did not fall within the definition contained in section 49 of the Act of 1870, unless its contents consisted substantially of a promise to pay a definite sum of money— Mortgage Insurance Corporation v. Commissioners of Inland Revenue, 1888, L.R., 21 QBD 352. Here the money which the writer undertook to pay was not a definite sum, and the promise to pay was merely incidental to the main purpose of the document, which was a proposal for a partnership. If section 49 were construed in the literal sense contended for by the defender, it might be made to include such documents as bonds and marriage—contracts containing an undertaking to pay money, which would be absurd. (2) The other document was not a receipt, but was an agreement to the effect that the money advanced should be expended solely in advertising the liniment. The definition of “agreement” in the schedule to the Act of 1870 was wide enough to include the document. At any rate, the document might be so construed, and the Court would not be inclined to reject the construction when the only alternative was to hold the document of no avail— Tomkins v. Ashby, 1827, 6 B. & C. 541. If stamped as an agreement, the document would not require to be further stamped as a receipt—Schedule to Act of 1870. If the document was not an agreement, it was at all events evidence of a contract which limited the defender's power of spending the money, and the pursuer was entitled to produce it for that collateral purpose in modum probationis without a stamp.— Welsh's Trustees v. Forbes, March 18, 1885, 12 R, 857, and cases there cited. Haldane v. Spiers, March 7, 1872, 10 Macph. 537, 44 Scot. Jur. 305.

At advising—