Scottish Court of Session Decisions

Miss Mary Elizabeth Henry, 1 Roslin Terrace, Aberdeen, raised an action in the Sheriff Court at Aberdeen against Messrs Strachan & Spence, Accountants, Aberdeen, concluding, inter alia, for payment of the sum of £634, being the amount paid by her to the North of Scotland Bank under a letter of guarantee granted by her to the bank for payment of all sums advanced by the bank to the defenders, and for payment of the expenses incurred by her in defending an action brought by the bank against her in respect of this sum; and, lastly, for payment of £1100 contained in a promissory-note granted to her by the defenders.

It appeared that the defenders were in the habit of managing the pursuer's money matters, and that in 1892 Mr Strachan induced her to sign the guarantee in question; that in 1893 they collected moneys belonging to her amounting to £1100, for which, as a convenience to the firm, she accepted a promissory-note.

In 1894 the defenders became insolvent, and entered into negotiations with their creditors, including the pursuer, with a view to a composition-arrangement. After sundry negotiations, on 13th April Messrs Morice & Wilson, who were acting for the pursuer, wrote to the defenders' agents, Messrs Edmonds & Ledingham, in the following terms:—“We have now had an interview with Miss Henry as to Messrs Strachan & Spence's affairs, and she has authorised us to agree to the terms proposed by you, provided her expenses are paid.” …

The pursuer thereafter refused to sign the necessary documents, and having unsuccessfully defended an action brought

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against her by the bank for payment of the sum contained in her guarantee, she raised the present action.

The pursuer pleaded with regard to the composition-arrangement—“(5) The defenders' statements can only be proved by writ or oath. (6) The defences, so far as founded on the alleged composition settlement, should be repelled—(1st) In respect the pursuer never accepted said settlement, either directly or through her agent; (2nd) that any acceptance thereof given by Messrs Morice & Wilson was unauthorised by and is not binding on the pursuer.” …

The defender pleaded—“(6) In respect that the pursuer agreed to the composition arrangement made by the defenders, and that there has been no failure on their part in carrying through the arrangement, the defenders should be assoilzied.”

The Sheriff-Substitute, after a proof had been led, found in fact, inter alia, that the pursuer had “authorised Mr Wilson (her agent) to agree to this composition on her behalf, which he accordingly did by letter to Messrs Edmonds & Ledingham ”; and found in law—“(1) That pursuer is bound to concur in said composition arrangement, having agreed to do so through her duly authorised agent.” He decided in favour of the defenders with regard to the other points raised in the case, and accordingly dismissed the action.

The pursuer appealed, and argued—Assuming that the appellant's agent was authorised to accept the composition, the abandonment of a right such as was contained in an agreement to accept a composition must be proved by the writ of a party himself, and the letter of an agent was not enough to bind the principal—Bell's Commentaries, ii. 393 and 398; M'Gregor v. M'Gregor, June 27, 1860, 22 D. 1264, at page 1268.

Argued for the respondents—The writ of an agent, his mandate being good, as it had been proved to be in this case, was sufficient to bind his principal in a composition arrangement—Bell's Commentaries (supra); Glass v. M'Intosh, May 12, 1825, 4 S. 1, The writ here was required only for the proof of the creditor's accession, not for the constitution of the agreement, and accordingly no special formalities were required.

At advising—