Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Struthers v. Smith [1913] ScotLR 919 (16 July 1913)
URL: http://www.bailii.org/scot/cases/ScotCS/1913/50SLR0919.html
Cite as: [1913] SLR 919, [1913] ScotLR 919
[New search] [Printable PDF version] [Help]
SCOTTISH_SLR_Court_of_Session
Page: 919↓
Court of Session Inner House First Division.
Sheriff Court at Glasgow.
v.
Facts:
A, a house factor, who factored a property belonging to B, rendered every half year statements showing the rents which he had collected and the sums which he had disbursed. On payment to B of the balances brought out in the statements as due to him, B granted discharges to A. A resigned his position as B's factor, and rendered a statement of account showing a balance due to him. This claim against B he assigned to C, who sued. The claim
Page: 920↓
contained certain sums which as averred had been disbursed by A during periods for which statements had already been rendered by A and discharges granted by B, the said sums not having been included in the said statements. The Court held that the action was relevant and allowed a proof.
Observed that the pursuer in challenging the accuracy of the statements had a very heavy onus to discharge, the effect of the statements being the same in law as if the factor had appended to them docquets stating that the sums shown as disbursements were the disbursements for the period covered by the statement.
William Struthers, commission agent, 42 Tenison Street, York Road, Lambeth, London, S.E., pursuer, brought an action in the Sheriff Court at Glasgow against James Smith,62Robertson Street, Glasgow, defender, for payment of £85, 16s. 3d.
The defender was the owner of a property in Edinburgh for which William Barnetson & Sons had acted as house factors. Their duties were to collect the rents, pay all disbursements, including tradesmen's accounts, and to remit the balance to the defender. Each half year from 1904 to 1910 Messrs Barnetson sent the defender a statement setting forth the rents received, the disbursements made, and the balance due to the defender. On receipt of the balance due the defender granted Messrs Barnetson a discharge in respect of the half year's rents. At Martinmas 1910 Messrs Barnetson sent the defender a cheque for £100 to account, but did not render a statement at the time. In January 1911 they resigned their position as factors for the defender, and shortly thereafter rendered a statement for the period ending Martinmas 1910, showing a balance of £69, 19s. due to them by the defender. Soon after they rendered an amended statement, showing £85, 16s. 3d. to be due to them by the defender. The disbursements contained in this statement included sums paid by Messrs Barnetson to tradesmen in the years 1907 and 1908 which together exceeded the whole amount of the balance brought out as due to them. Thereafter Messrs Barnetson assigned their claim against the defender to John Robertson, solicitor, Edinburgh, who in turn assigned it to the pursuer.
The pursuer pleaded, inter alia—“(2) The said William Barnetson & Sons having on behalf of the defender made disbursements in excess of the sums collected by them for him to the amount sued for, the defender should be found liable in payment of said excess.”
The defender pleaded, inter alia—“ (4) The accounts between the said William Barnetson & Sons and the defender having been periodically settled each half-year for six years regularly, cannot now be opened up. (4 A) The said Barnetson & Sons having accounted each half-year for their intromissions, delivered up signed statements and vouchers, and received final receipts and discharges from defender, the pursuer is barred from this action.”
On 1st April 1912 the Sheriff-Substitute ( Craigie) allowed a proof.
The pursuer appealed to the Sheriff ( Millar), who on 26th June 1912 assoilzied the defender.
Note.—“… On the law I think there is sufficient justification for the view that, according to Scotch law, where the parties have met and settled accounts, and after payment have discharged each other of their obligations, it is not competent for one of the parties to go back and open the account, unless on the ground of fraud or error in fact not due to any carelessness on the part of the person seeking redress. I think that is especially true with regard to a factor. If he did not correctly set forth the disbursements the proprietor might find it very difficult years afterwards to check the accounts rendered to him. For instance, one of the largest accounts claimed in this case is for house painting, and it might be very difficult, years after this work had been done, for the defender to say that the account had been properly incurred. Again, it would deprive the owner of the property of the opportunity of considering whether the administration of the factor was such that he should retain him or dispense with his services. Further, a person of limited income derived from property might be encouraged to spend money which if he were called upon afterwards to repay might place him in very straitened circumstances. As to the authorities, I would refer to paragraph 585 of Bell's Principles, and the cases quoted there, and also to the case of Cameron v. Henderson and Others, 18 R. 728, and the cases there quoted, especially those of Stewart v. Maconochie, 14 S. 412, and Russell's Trustees v. Russell, 13 R. 331. In the English law the doctrine of settled accounts is well established— Cave v. Mills, 1862, 31 L.J., Ct. of Ex. 265; Hunter v. Belcher, 2 De Gex, Jones, and Smith's Reps. 194; Attorney-General v. Brooksbank, 2 Young and Jervis' Reps. 37; and the case referred to in 2 Smith's Leading Cases, 433 to 436. Upon the admitted facts I think the defender is entitled to absolvitor in this case.”
The pursuer appealed, and argued—The pursuer was entitled to a proof of his averments. The question was whether Messrs Barnetson were entitled to include in their final statement disbursements made in 1907 and 1908 which had not been charged against the defender in previous statements. The Sheriff was wrong in holding that there had been an absolute discharge cutting off the pursuer's right to claim for these disbursements. “Fitted accounts” only raised a presumption of discharge which might be rebutted by evidence— Laing v. Laing, July 17, 1862, 24 D. 1362; Glasgow Royal Infirmary v. Caldwell, November 2, 1857, 20 D. 1. The doctrine of settled account in the law of England was also only a presumption. Cameron v. Panton's Trustees, March 19, 1891, 18 R. 728, 28 S.L.R. 490, and Russell's Trustees v.
Page: 921↓
Russell, December 11, 1885, 13 R. 331, 23 S.L.R. 211, were decided after proof. Stuart v. Maconochie, February 4, 1836, 14 S. 412, was very special in its circumstances. Argued for the defender—When principal and agent met together and settled an account the presumption was that it was correct. No doubt if error were relevantly averred proof would be allowed, but the averments would need to be very clear and specific — Parkinson v. Hanbury, [1867] L.R., 2 H.L. 1, per Lord Westbury at p. 19. Here, especially in view of the suspicious circumstances of the case, the averments were insufficient. The defender also referred to Bell's Prin. 585.
I am sorry I cannot agree with the learned Sheriff, because I do not think that is the principle of what is called fitted accounts. I have always understood that there are two situations which you may have. On the one hand you might have an absolute discharge by A in favour of B in which case the matter is ended, unless that discharge can be reduced on the appropriate averments of fraud, essential error, or something of that sort. On the other hand there is the case where you have what are known as “fitted accounts” which do not constitute a discharge, but which raise a presumption that there has been a final settlement between the parties. The law on this question was laid down in the well-known case of Laing v. Laing, 24 D. 1362, by Lord President Inglis (at the time Lord Justice-Clerk), who pointed out that the fact of a docquet was to reverse the onus, and was not to exclude inquiry altogether, and that he who avers that the account is wrong must be put to explicit proof of that fact. Now in this case, although in the strict sense of the word there was no docquet on the accounts, there was something which was exactly equivalent to a docquet. The accounts were rendered half-yearly, and it was the duty of the house factors to put down the whole disbursements made by them during the period covered by the statement. No doubt two things might have happened to prevent him doing so. Tradesmen's accounts are not always rendered with absolute punctuality, and sometimes the period for which they are rendered does not correspond to the period for which the factor's statement is rendered. If a tradesman's account has not been rendered in time to be included in the factor's statement, it is quite dear that the factor's right to recover would not on that account be excluded; or again, if there had been a case of mere incuria, it would have been in the power of the factors to say—“Here is an account which we have omitted to charge against you in our previous statement, and I am entitled to claim payment of it now.” I think all that is clear, but I also think that it is always to be presumed that the factors would not omit from their statements any account that had been paid by them, and that the onus is very strong against the person who alleges that there has been such an omission. From the nature of the case here there can only have been one discharge in the proper sense of the word. It was always the factors who had to give money to the principal, and it would be the principal who had to discharge the accounts. But I think that the fact that the factors put in a certain sum as disbursements is the same in law as if they had docquetted the accounts “these are our disbursements during the period.” That being so, it seems to be impossible to hold the case absolutely concluded. There must be a proof as the Sheriff-Substitute has said, but in taking that proof he must bear in mind that the effect of these accounts is just the same as if they had been docquetted, and that the onus is upon the pursuer to show that they do not include all the disbursements that have been made, and, unless he clearly shows that the money is still due to him, then the docquet, so to speak, will prevail.
In view of the fact that the whole trouble and expense since the judgment of the Sheriff-Substitute has been caused by the pursuer, and that he is now only getting what the Sheriff-Substitute allowed him, I think the pursuer should bear the whole expenses of the process since the date of the Sheriff-Substitute's interlocutor.
The Court recalled the Sheriff's interlocutor and allowed a proof.
Counsel for the Pursuer (Appellant) — Chisholm, K.C.—A. A. Fraser. Agent— John Robertson, Solicitor.
Counsel for the Defender (Respondent)— Sandeman, K.C.—Hon. W. Watson. Agents— M. & M. M'Call, S.S.C.