Scottish Court of Session Decisions

This was an action at the instance of Mrs Chrystal, 3 Teviot Terrace, Glasgow, against her son Robert Chrystal. The summons concluded for payment to the pursuer of “( First) the sum of £511, 3s. borrowed by the defender from the pursuer, conform to acknowledgment by him dated 27th June 1879, with interest thereon at the rate of £4 per centum per annum from the said 27th June 1879 till payment; and ( Second) the further sum of £2000 sterling, with interest thereon at the rate of five per cent. per annum from the 26th day of May 1887 until payment.”

The pursuer averred that the defender on 27th June 1879 borrowed from her the sum named in the first conclusion, that he had granted an acknowledgment in the following terms—“ Glasgow, 27 th June 1879.—Received from Mrs Marion Irvine Mackie or Chrystal, 2 Charing Cross, Glasgow, the sum of Five hundred and eleven pounds, 3/-sterling, being loan to me, and on which I agree to pay 4% per annum. 27/6/79. £511, 3/.— William Chrystal”—and that no part of the principal or interest had been paid.

She further averred that in 1879–80 the defender had borrowed from her the sum of £2000 to enable him to become a member of the Glasgow Stock Exchange, that he had paid her the interest on this sum regularly up to 1884, that “(Cond. 3) … On 5th October 1885 he paid to her a sum of £55, which covered the balance of interest due to the previous Martinmas. Thereafter he continued to make to her, or on her behalf and at her request, payments of various small sums, which the pursuer at the time imputed towards extinction of the interest on said loan. Between October 1885 and 25th June 1888 he paid in such small sums the amount due as interest down to Martinmas 1887. During the next eighteen months she received from him various sums amounting to £81, 17s. 6d., and for these credit falls to be given to the defender as against the interest which has since accrued. Since 3rd December 1889 he has made no further payments, and the principal sum is still due and resting-owing.”

In answer to a statement of the defenders the pursuer further averred—“Ans. 7. … Under reference to article 3 of the condescendence, admitted that defender paid to pursuer and on her behalf sums for various purposes. This he did, not on account of any inability on the pursuer's part, or on that of his father's trustees, to find any money necessary, but upon the express request of pursuer, who found that the best way of obtaining from him the interest on the sums due to her was by getting from him small sums from time to time as she required them and as it was convenient for him to pay. The pursuer has given defender credit, as shown in condescendence 3, for the whole sums so paid to her.”

The defender denied that he had received any advances from the pursuer, and averred that even if he had received any he had paid to and on behalf of the pursuer a larger sum than any received by him from her. He further averred that he had in 1890 granted a trust-deed on behoof of his creditors, and that the pursuer had lodged no claim.

He pleaded—“(4) The pursuer is barred from insisting in the present action by mora and taciturnity. (5) The defender not being due the pursuer any money, the defender is entitled to be assoilzied. (6) The said advances can be proved by the defender's writ or oath only. (7) Discharge. (8) Compensation.”

The Lord Ordinary ( Pearson) on 22nd February 1899 allowed the parties, before

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answer, a proof of their averments.

There being no writ of the defender available to instruct the alleged loan of £2000, the pursuer lodged a minute referring that part of the case to the defender's oath, and the Lord Ordinary, on the oath being taken, found it negative of the reference.

It is unnecessary to refer to the evidence, parole and documentary, upon the other branch of the case, as it appears sufficiently in the opinions of the Court.

The Lord Ordinary ( Pearson) on 10th August 1899 pronounced the following interlocutor:—“Decerns and ordains the defender to make payment to the pursuer of the sum of £511, 3s. sterling, borrowed by the defender from the pursuer, conform to acknowledgment by him dated 27th June 1879, with interest thereon at the rate of 4 per cent. per annum from the said 27th June 1879 till payment: Assoilzies the defender from the second conclusion of the summons and decerns: Finds the pursuer liable to the defender in the expenses of and incident to the Minute of Reference to Oath, and the procedure thereon: Quoad ultra finds the defender liable to the pursuers in expenses so far as not already disposed of, &c.”

Opinion.—“The pursuer in this action sues her son, who is a stockbroker, for repayment of two sums of money alleged to have been borrowed by him from the pursuer in the year 1879. I allowed a proof habili modo, but as it appeared that there was no writ of the defender available to instruct the larger of the two alleged loans (that for £2000), the pursuer lodged a minute referring that part of the case to the defender's oath, On the oath being taken I found it negative of the reference; and the defender is consequently entitled to be assoilzied from that conclusion.

In support of the other alleged loan the pursuer produces and founds upon a document holograph of the defender in the following terms:—‘ Glasgow, 27 th June 1879.— Received from Mrs Marion Irvine Mackie or Chrystal, 2 Charing Cross, Glasgow, the sum of five hundred and eleven pounds 3s. sterling, being loan to me, and on which I agree to pay 4 per cent. per annum.— William Chrystal.—£511, 3s.’ The document bore a penny stamp, and the defender objected to this as insufficient. This plea has been obviated by the addition of an impressed sixpenny stamp; and the document is now adjudged duly stamped.

Notwithstanding the defender's plea that in such a case it rests upon the pursuer to prove that the debt is resting-owing, it is clear on the authorities that as this is an explicit holograph writ of a loan of money, the pursuer is entitled to decree, unless the defender can prove payment or discharge.

Now repayment of the loan, in the strict sense, that is to say, the passing of money for the purpose and with the effect of discharging that debt, cannot be proved otherwise than by the writ or oath of the creditor. Accordingly, the defender maintains that he has proved repayment of this loan by the writ of the pursuer. To this purpose he founds (1) upon her admissions on record, and especially upon Art. 3. of her condescendence, and her 7th answer to the defender's statement; (2) upon certain entries in her cash-book, and (3) upon payments made by him to or on behalf of the pursuer, as instructed by vouchers produced, and set forth in the state No. 55 of process. I dismiss this third head as being in no view that I can discover writ of the pursuer. As to the entries at the end of the cash-book, on the pages marked A and B, these are headed—‘Receipt of interest of 5 per cent. on £2000 lent to my son, Wm. Chrystal, in 1879 and 80. I have received it in instalments every year regularly until 1885.— M. I. Chrystal.’ Then follow entries in her handwriting of various payments of cash, covering the period from November 1884 to December 1889. The entries are all general except four, one of which is ‘for boat, £10,’ while two are for rent of Beechwood, a house at Dunoon occupied by the pursuer. I may say that although the defender criticised the heading as having the appearance of being inserted later, I see no reason for suspicion on that head. And this being so, it turns out that the ‘writ’ will not serve the defender on the plea which I am now considering, for it does not show any repayments towards the debt now in question. But the defender replies that the loan of £2000, to the interest of which these payments are there attributed, is the very loan which has been negatived by his oath on reference; and that it is therefore now open to him to attribute all these entries towards payment and extinction of the loan of £511, 3s. He maintains that these entries admit the payment by him of over £400 in cash, over and above the admission of five years’ previous payment of interest, and that he is entitled to disregard the qualification that it was in name of interest on a debt which must be taken as never having existed. But I think the pursuer's reply is well founded, namely, that this is to attribute much too wide an effect to the oath on reference. The oath being negative of the reference, the action for the debt fails; but I do not see that this entitles the defender to read out all reference to that loan in the documents on which he relies, and either to read in some other debt, or to hold the cash entries as open to be allocated at his own pleasure. We are not here in an accounting, but in a question of proving repayment of a particular loan by writ; and I think the writ must be taken with its qualification, or rather it must be taken as a whole.

I now come to the pursuer's admissions on record. In condescendence 3 she makes averments relative to the payment of interest on the alleged £2000 loan, which, as I understand, exactly square with the entries in her cash-book to which I have referred. They amount to this, that she received from him the interest on the £2000 by pretty regular instalments down to Martinmas 1884; that thereafter the defender paid various small sums to her or on her behalf, which she at the time imputed towards

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that interest, and that eight years' interest were thus paid by him, amounting to £800; and that he has since paid her £81, 17s. 6d. in small sums (as shown in the last six entries on page B of the cash-book) which fall to be credited against the interest. The defender now seeks to discard the reference to the alleged £2000 loan, and to claim the £881, 17s. 6d. as an admitted credit, thus nearly wiping out the loan of £511, 3s. with interest. So far, I think the pursuer's reply, which I have already sustained as to the cash-book entries, holds good here also. The question is narrower when we come to the pursuer's 7th answer. She there admits that the defender paid to her and on her behalf sums for various purposes; and she explains he did so by her express request, as ‘she found that the best way of obtaining from him the interest on the sums due to her was by getting from him small sums from time to time as she required them, and as it was convenient for him to pay.’ Here the ‘interest on the sum due to her’ must include interest on the loan of £511, 3s.; and if it had stood there I should probably have held that the sums ackowledged as paid to her must be attributed either in the first instance or rateably in payment of interest on that loan. But, as the pursuer pointed out, the admission is expressly made ‘underreference to article 3 of the condescendence’; and she adds ‘The pursuer has given the defender credit, as shown in condescendence 3, for the whole sums so paid to her.’ This being so, I hold that the 7th answer does not carry the admission any higher in the defender's favour.

But the defender maintains, alternatively, that in the circumstances proved it is to be presumed that the loan was paid, compensated, or discharged. The doctrine to which he appeals, and the limits of it, are thus expressed by Lord Moncreiff in the recent case of Thiem's Trustees (1899, 36 S.L.R., p. 567)—‘Whether a loan has been constituted by writing or not, discharge of the obligation may be inferred from circumstances; but circumstantial proof can only be sustained where no reasonable doubt remains that the debt has been paid. The mere lapse of time, short of the years of long prescription, is not of itself enough; and in general it is necessary that there should be evidence of some transaction or settlement between the creditor and the debtor, subsequent to the contraction of the debt, which necessarily leads to the conclusion that the debt was discharged.’ The cases on which the defender mainly relied are Thomson, 12 S. 842; Mackie, 16 S. 73; Ryrie, 2 D. 1210; Neilson's Trustees, 11 R. 119. The passage which I have cited from Lord Moncreiff's opinion seems to me to be an accurate summary of the result of these cases; and the question is, whether the defender succeeds in bringing the present case within the rule.

The defender points to the relations of the parties, and to their pecuniary position, and also to the course of dealing between them in money matters. The defender was at the time of the alleged loan either living with his mother or had just left home, and from that time he had admittedly a comfortable income of his own until 1890. In that year he granted a private trust-deed for creditors and went to South America. The pursuer, along with other trustees of her husband, carried on her husband's business, but in 1888 they became embarrassed and granted a trust for creditors. Yet although the defender was then and for two years afterwards quite able to pay the debt the pursuer did not give it up in her state of affairs, nor did she by herself or through her trustee make any claim upon the defender. Two years later, when the defender became insolvent, still no such claim was made upon his estate, and this although his estate was a creditor of the firm in their books for a sum of £71, for which his trustee ranked and drew a dividend. Further, no interest was ever paid on the debt. nor (so far as appears) was payment of interest or principal ever demanded until quite recently. This debt is not alluded to in the pursuer's cash-book, and the pursuer does not tender her evidence in explanation of the circumstances. Then the course of the pecuniary dealings between the parties shows that from time to time payments were made to or on behalf of the pursuer by the defender to an amount (taking the cash-book and the separate vouchers together) much exceeding their loan of £511, 3s. and interest. It is further urged that the pursuer had no money at her command to enable her to advance such an amount out of her own funds; but I think this is not proved; and, besides, it appears to me to be irrelevant. The other circumstances, however, are matters to be taken into consideration on the question of presumed payment or discharge, and on the whole they point in that direction. But in my opinion they do not amount to such proof as the principle of law requires. They do not necessarily lead to the conclusion that this debt was discharged. It is not enough to show receipt of moneys sufficient to discharge it, nor to show failure to claim upon it in insolvency, or failure to plead it in compensation of a counter claim. All these may be accounted for on quite other grounds. So the omission of it from the cash-book, or rather from the fragmentary states entered at the end of the book, is really immaterial, when it is seen that the book does not profess to enter or to tabulate items in such a way as to show a complete state of affairs. Indeed, the defect in this part of the defender's case is just the absence of anything approaching to transaction or settlement or stated account as between the creditor and the debtor either in the creditor's books or anywhere else.

The defender further pleads mora and taciturnity. But I think he can hardly succeed on that ground if he fails on the other points. There seems to me to be no ground for it in fact, and implied abandonment or discharge on the head of mora and taciturnity is peculiarly difficult of application to the case of a loan evidenced

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by written acknowledgment (see per L. J. C. Patton in Cuninghame v. Boswell, 1868, 6 Macph. 893).

I therefore think that the pursuer is entitled to decree for the sum first concluded for. I have felt some doubt whether interest should be decerned for, partly owing to the form of her admission in her 7th answer, and partly because of the complete silence of the pursuer on the subject. But this is a case where the acknowledgment of loan bears an express agreement to pay 4 per cent. per annum upon the amount, and where therefore it cannot be pleaded that there was no intention that interest should run on the debt, or that the failure to claim payment infers a departure from the claim for interest. I think it must follow the principal debt.”

The defender reclaimed, and argued—(1) In a debt said to have been constituted so long ago the mere production of this document was not enough, but it was for the pursuer to show that the debt was still resting-owing — Neilson's Trustees v. Neilson's Trustees, November 17, 1883, 11 R. 119. (2) But in any case the defender had proved repayment of the loan. This appeared from the entries in the pursuer's cash-book. There had been no intimation to the defender that the pursuer was appropriating these sums paid by him to the debt of £2000, the existence of which he denied, and which on the reference to his oath had been proved to be non-existent. These entries must accordingly be held applicable to repayment of the loan of £511—Bell's Prin. sec. 563; Spence v. Paterson's Trustees, October 24, 1873, 1 R. 46, at 60; Jackson v. Nicoll, 1870, 8 Macph. 408. There was further proof of repayment to be found in the pursuer's admission on record which might be quite legitimately used for that purpose— Picken v. Arndale & Co., July 19, 1872, 10 Macph. 987; Milne v. Donaldson, June 10, 1852, 14 D. 849. (3) The circumstances of the case were such that payment must be presumed— Ryrie v. Ryrie, June 26, 1840, 2 D. 1210; Mackie v. Watson, November 16, 1837, 16 S. 73; Thomson's Trustees v. Monteith's Trustees, June 27, 1834, 12 S. 842. In the case of Thiem's Trustees v. Collie, March 15, 1899, 1 F. 764, the circumstances were entirely different. (4) The debt was in any case extinguished by mora and taciturnity— Spence v. Paterson's Trustees, supra.

Counsel for respondent were not called upon.