Scottish Court of Session Decisions

The Regulations for the Territorial Force provide—“39. A.C.O. is responsible for the proper application of all regimental funds, and will supervise and control the committees formed for their management. As soon as the accounts for the year are ready the C.O. of each unit will assemble an audit board consisting of the three next senior officers present at headquarters. The board will examine all vouchers, and will satisfy themselves that liabilities are not omitted from the balance sheet, that assets are not overestimated, and that the cash credits are actually available. The balance of the funds will be entered in the proceedings which will be made out on A.F. A2, and the board will record thereon that these instructions have been carried out. The proceedings will be laid before the C.O. for approval, and placed before the inspecting officer at his annual inspection. … 241. If an officer's or a sergeant's mess is established in a unit under the authority of the C.O., that officer will be responsible that it is organised on the lines laid down in the King's Regulations, that discipline is maintained, and that the accounts are properly kept and audited.”

The King's Regulations provide—“1130. Every officer of the corps will be a member of the regimental mess. The C.O. is responsible that all the regulations relating thereto are observed. He will also ensure that the mess is conducted without unnecessary expense or extravagance, and by his personal example and advice will encourage economical habits and careful management. The cost of living in the mess will be that which obtains throughout the service generally. Semi-private account books, in which extra charges and unauthorised subscriptions are shown, will not be kept in the mess. The C.O. will be held responsible that every charge is shown in the official mess accounts which are produced at the inspection of the brigade commander. … 1143. Before handing over the command of a unit or portion of a unit in which an officers' mess is maintained the C.O. will send to the brigade commander a certificate that all debts owing by the mess have been paid, or that a sufficient amount is in hand to meet all liabilities. Should the C.O. be unable to furnish this certificate he will explain the reasons which have necessitated the contracting of debts, so that the brigade commander (when not below the rank of brigadier-general) may decide whether they will be paid by the C.O. or can be taken over by his successor. A copy of the certificate will be handed to the officer assuming the command, who will report to the brigade commander whether he is satisfied with the state of the funds. In the case of units changing stations where station messes are maintained a similar certificate will be furnished by the C.O. of the outgoing unit.”

John Paterson Cochrane, sometime Lieutenant-Colonel of the 6th Battalion Highland Light Infantry, pursuer, brought an action against Hugh Dunlop Dempster Chalmers, sometime writer in Glasgow and formerly Colonel of the 1st/6 Battalion Highland Light Infantry, defender, concluding for decree, inter alia, that the defender should be decerned and ordained to exhibit and produce a full and particular account of his whole intromissions as officer commanding and also as treasurer of the Second Volunteer Battalion, now the Sixth Battalion, Highland Light Infantry, whereby the true balance due by him to the pursuer as Lieutenant-Colonel foresaid might appear and be ascertained, and for £1000 or such other sum as should be ascertained to be the balance of his intromissions.

The pursuer pleaded, inter alia—“1. The defender being bound to account to pursuer as commanding officer of the regiment for any balance due to the regimental funds as at the date of his demitting office as Colonel, and for any further balance accruing during the subsequent period during which he acted as treasurer to the Finance Committee, decree should be pronounced in accordance with the first two conclusions of the summons.”

The defender pleaded, inter alia—“1. No title to sue. 2. The action as laid is incompetent.”

On 12th July 1917 the Lord Ordinary ( Anderson) repelled the first and second Pleas-in-law for the defender and ordained him to lodge accounts of his intromissions as craved in the summons, and granted leave to reclaim.

Opinion, from which the averments of the parties appear:—“The pursuer was for some

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time Lieutenant-Colonel of the 6th Battalion Highland Light Infantry, and he sues in that capacity. The defender was the immediate predecessor of the pursuer in the command of said battalion, which prior to the Territorial and Reserve Forces Act 1907 was known as the 2nd Volunteer Battalion of the Highland Light Infantry. The defender is asked to produce accounts of his intromissions as officer commanding and also as treasurer of said 2nd Volunteer Battalion and to make payment to the pursuer of £1000.

The defender, who is a writer in Glasgow, had been while holding the rank of captain appointed treasurer of the battalion in 1894. He held that office until 1905, when he was appointed commanding officer of the battalion, and as such was debarred from continuing to act as treasurer. A clerk of the defender named Munro was then appointed treasurer. This appointment, according to the pursuer's averments, was merely nominal, the defender as before controlling all financial matters connected with the battalion. Munro is said to have left the defender's service in 1913, but the defender gave no notice of this to the Finance Committee of the battalion, and continued to act as treasurer till October 1914.

The pursuer was appointed commanding officer of the battalion in 1912, and as such he became responsible for the state of the regimental funds. He repeatedly called on the defender to furnish an account of his intromissions, but it was not until 1914 that the defender submitted accounts. The pursuer obtained a report on these accounts from a chartered accountant, which showed that £800 or thereby was not accounted for and was owing to the regimental funds. Thereafter the matter was taken up by the War Office, and on 7th November 1916 a letter was issued holding the pursuer responsible for this shortage in the regimental funds, and giving him an opportunity of obtaining the decision of a civil court as to the question of liability as between himself and the defender.

In a question with the War Office the pursuer is responsible, because the deficiency was discovered during the period of his holding the command of the battalion. The pursuer ceased to be commanding officer of the battalion in 1915. The present action was raised on 21st March 1917.

I heard a debate in the procedure roll on the first two pleas stated for the defender. These pleas, as I understood the argument, raise the same point, viz., that the pursuer having ceased to be commanding officer in 1915 was not entitled in 1917 to sue for and recover moneys due to the corps or battalion.

These pleas are purely technical, as the defender conceded that he is bound to account to someone for his intromissions with the regimental funds. The suggestion made that the defender might have to account a second time is obviously not well founded. The theory of the whole matter is this, that on a change of command the new commanding officer is entitled and bound to demand an account from his immediate predecessor in office and is bound to account to his immediate successor. If, then, the defender accounts to the pursuer he has a complete answer to any demand for accounts made against him by the pursuer's successor, to wit, that he has already accounted to the proper person from whom alone the present commanding officer is entitled to demand an accounting.

The pleas in question fall to be determined on a consideration of the terms of the 25th section of the Volunteer Act 1863, and the Regulations for the Territorial Force and the Army.

The said 25th section occurs in Part IV of the Act of 1863, which is headed ‘Rules and Property of Corps.’ Thesectionis rubricked ‘Vesting of property of corps in commanding officer, &c.,’ and enacts—‘All money subscribed by or to or for the use of a volunteer corps or administrative regiment, and all effects belonging to any such corps or regiment or lawfully used by it, not being the property of any individual officer or volunteer or non-commissioned officer of the Volunteer permanent staff belonging to the corps or regiment, and the exclusive right to sue for and recover … money due to the corps or regiment …, shall vest in the commanding officer of the corps or regiment for the time being and his successors in office, with power for him and his successors to sue, to make contracts and conveyances, and to do all other lawful things relating thereto; and any civil or criminal proceedings taken by virtue of the present section by the commanding officer of a corps or regiment shall not be discontinued or abated by his death, resignation, or removal from office, but may be carried on by and in the name of his successor in office.’

The 39th regulation for the Territorial Force provides that ‘a C.O. is responsible for the proper application of all regimental funds,’ and regulation 241 makes a C.O. responsible for the organisation of an officers' mess on the lines laid down in the King's Regulations and for the accounts being properly kept and audited. The King's Regulations dealing with mess accounts for which the C.O. is responsible are Nos. 1130, 1132, 1134, and 1143.

Both parties maintained that the 25th section of the Volunteer Act of 1863 was still in force, but it is a moot point whether this Act has not been repealed by implication. The Territorial Reserve Forces Act 1907 does not expressly repeal the Act of 1863, nor does it expressly keep it alive. The Act of 1907 swept away the Volunteer Force, and it is arguable that all statutes regulative of the Volunteer Force were thereby impliedly abrogated. On the other hand it must be kept in mind that repeal of a statute by implication is not readily admitted— Bain, 2 R. (J.) 32, at pp. 35 and 36, 12 S.L.R. 490. Moreover, the provisions of section 25 of the Act of 1863 are not restricted to Volunteer corps but extend to administrative regiments, a phrase which would include a territorial battalion. There is no similar provision in the Territorial Forces Act giving a C.O. a title to recover regimental

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funds. These considerations give weight to the contention that the section is still in force. The pursuer's counsel doubtless considered that it was essential for him to maintain that the section was still operative in order that his client's title to sue might be unquestioned. The defender's counsel was just as firm in maintaining this contention, as he relied on the terms of the section to make out that the pursuer had no title to sue.

I therefore proceed on the assumption that the said section is still in force.

There are two answers to the defender's contention, each of which seems to me to be conclusive—(1) The meaning of the section is not that contended for by the defender. The defender's contention is that the only person who could raise this action in March 1917 was the officer then in command; that with demission of office the title to prosecute an action is lost and that a fresh pursuer must be sisted every time a new C.O. is appointed until the litigation comes to an end. This argument was based on the terms of the section, and in particular of the words ‘for the time being,’ and of the last clause of the section. It was suggested that the words ‘for the time being’ applied to the date of raising the action. I am unable to accept this view. The phrase plainly refers to the period of the command of the officer in whom vesting of regimental property is to take place. During that time all property coming to the regiment vests in the C.O. In the present case a sum of £800 or thereby wrongously withheld by the defender vested in the pursuer at the commencement of his period of office, and he is endeavouring to vindicate by the present action the sum so vested in him. He is the creditor of the defender for this sum, both under the terms of the Act of 1863, of the foresaid Territorial Force Regulations, and of the order of the War Office referred to on record. The section expressly gives ‘him’— i.e., the officer in whom vesting has taken place—power to sue. This view is confirmed by an examination of the language of the concluding clause of the section. That clause presupposes that proceedings have been taken by the proper creditor—in this case, the pursuer. Such proceedings so originated may in certain eventualities be ‘carried on’ by the pursuer's successors in office. But the section does not say that such proceedings may, as contended for by the defender, be originated by a successor in office of the true creditor. The clause was obviously framed to meet the case where it was really necessary to have a change of pursuer, as where the pursuer who as true creditor has properly originated the action has died or been removed from office for misconduct. If the action had been raised by the present C.O. I think the defender would have had a much better chance of success on the question of title to sue.

(2) The concluding provision of the section is permissive merely and not imperative. This is indicated by the use of the word ‘may’ and by the common-sense of the matter. If the defender's contention is right, that the title to sue depends upon the holding of the post of C.O., then the following situation in present circumstances is conceivable. The litigation may last for two years and the C.O. may be changed every month. According to the defender, it would thus be necessary to have two dozen fresh pursuers sisted, each of whom would probably desire to be advised by his own agent and counsel. I am unable to hold that the provisions of the foresaid section lead to a result so preposterous.

I shall accordingly repel the defender's first two pleas-in-law and order accounts.”

The defender reclaimed—Thereafter the pursuer amended his record, and the defender lodged answers to the pursuer's amendment.

In the record as amended the pursuer averred—“(Cond. 1) The pursuer was in January 1912 gazetted as Commanding Officer of the lst/6 Battalion of the Highland Light Infantry of His Majesty's Territorial Forces in succession to the defender, and as such commanding officer became responsible for all the regimental funds of the battalion, in terms of the Territorial and Reserve Forces Act 1907, and the Orders and Regulations following thereon. The said lst/6 Battalion Highland Light Infantry was until the Territorial and Reserve Forces Act 1907 known as the 2nd Volunteer Battalion of the Highland Light Infantry. (Cond. 2) The defender, who was then an officer in the said 2nd Volunteer Battalion was gazetted to the command of the battalion in the year 1905, and continued to occupy that position down to the date of the pursuer's appointment. At some date unknown to the pursuer, but at least six years prior to obtaining command of the battalion, the defender was appointed by the officers of the battalion to act as treasurer to the finance committee of the battalion, and as such it was his duty to keep the accounts and books of the regiment and the officers' mess, and to receive and out of the funds contributed by the officers to pay the various accounts and charges incurred by said officers in connection with the regiment. … (Cond. 3) The defender on being appointed commanding officer of the battalion was no longer qualified to fill the position of treasurer to the finance committee of the regiment, and at that date, and on his suggestion, it was arranged that the appointment of treasurer should be given to a clerk, by name John Munro, who was employed by the defender in connection with his business as a writer in Glasgow. The said John Munro was not a member? of the regiment, and his appointment was agreed to by the finance committee of the regiment on the understanding that the appointment was in fact a nominal one, and that the defender should retain the whole books and accounts in his office, and that Munro's appointment should subsist only so long as he remained in defender's employment. It is believed that the said John Munro left defender's employment in or about the year 1913, but the only notification of this given to the finance committee, or received by them, was an intimation in

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October 1913 that Munro was temporarily absent through illness. The defender, without further advising the finance committee, continued todischargethedutiesof treasurer down to October 1914. So far as the pursuer is aware the only authority which he obtained from the finance committee was when, on 12th August 1914, he was authorised by the committee to sign cheques in the absence of the pursuer with the battalion at the war, which the committee then believed to be temporary. … (Cond. 4) In terms of section 1143 of the King's Regulations it was the duty of the defender on giving up the command of the regiment in 1912 to send to the brigade commander a certificate that the funds of the regiment were all in order, or a statement of the position of the regimental accounts for which he was then responsible, in order that i t might be decided whether the pursuer should take over the responsibility for the liabilities of the regiment. Had any statement been sent to the brigade commander truly setting forth the state of the regimental accounts at that date, and showing the amount of liability in excess of the assets, the pursuer, had he been aware thereof, would, as he was entitled to do in terms of the Regulations, have expressed dissatisfaction with the state of the funds and have declined to accept responsibility for the deficit. The defender, however, failed to disclose the state of the accounts, and the pursuer having no reason to suspect the true state of matters, took no other steps at that time than to call on the defender to furnish him and the finance committee with a statement showing the position of the regimental funds and of the intromissions therewith by himself and the said John Munro. The defender, who never disputed his liability to account to the pursuer for any balance which might be due to the regimental funds at the date of his demitting office as colonel, or for the period subsequent thereto during which he acted as treasurer, repeatedly put the matter off, but eventually after the regiment had been mobilised in 1914 he supplied the pursuer with a note of balances and various books and accounts to 10th October 1914. The pursuer and his fellow officers were unable to gather from these documents and books the position of the regimental and officers' mess funds, and accordingly handed them over to a chartered accountant to have statements made up. The said chartered accountant obtained from defender certain other books and vouchers, and after examination of these, reported to the pursuer that apparently a sum of about £800 was not accounted for and was owing to the regimental funds. … (Cond. 5) When the pursuer retired from the command of the regiment in 1915 his successor, Colonel Miller, declined to accept responsibility for the deficit in the regimental accounts, and the same course has been followed by the present commanding officer Colonel Anderson. In 1916 the matter became the subject of a court inquiry by the military authorities. The only question at issue was whether the pursuer, by having failed to insist on a statement of accounts being submitted in terms of section 1143 of the King's Regulations immediately on his taking over command of the regiment and by continuing in command for nearly two years without obtaining any such statement had lost his right to decline responsibility for the deficit in terms of the said section and had rendered himself liable therefor in terms of section 39. It was not, and could not be, maintained under the circumstances that any liability attached to either Colonel Miller, Colonel Anderson, or the officers of the regiment. As a result of this inquiry the following letter from the War Office was communicated by the Territorial Force Record Office to the pursuer:—‘7 th November 1916. Sir,—With reference to your communication C. R. No. 95813 (A) dated 14th October 1916, and previous correspondence, regarding the Accounts of the 6th Battalion Highland Light Infantry (T.F.), I am commanded to inform you that as matters stand at present, having in view paragraphs 39 and 241 Regulations for the Territorial Force, the Army Council must hold Lieutenant-Colonel J. P. Cochrane, V.D. (T.F. Reserve), responsible for the funds unaccounted for, but that before taking any action the Council are prepared to give Lieutenant-Colonel Cochrane every opportunity of obtaining the decision of a civil court as to the question of liability, as between himself and Lieutenant-Colonel H. D. Chalmers, if he desires to raise and contest that question, and upon condition that he prosecutes any such civil remedy with all possible dispatch. I am to add that the Council are of opinion that the matter should be pressed to a definite conclusion without delay.—I am, Sir, Your obedient servant, B. B. Cubitt. The General Officer, Commanding-in-Chief, Southern Command, Salisbury.’ (Cond. 6) This decision of the Army Council proceeds on an interpretation of the two sections therein referred to, and as by Order of His Majesty prefixed to the Regulations for the Territorial Force it is enacted ‘that the Army Council shall be the sole administrators and interpreters of the said Regulations,’ the sole responsibility for immediate payment of the debts, so far as unpaid, which were outstanding when the defender retired from the command of the regiment or were incurred during the pursuer's period of command rests with the pursuer. He has accepted the decision of the Army Council as he is bound to do, and has since this action was raised personally settled several of the regimental accounts which were outstanding when the defender retired from the command of the regiment. He believes and avers that on an accounting with the defender it will appear that sums amounting to £800 or thereby have not been accounted for which should have been credited to the said accounts either during the period when the defender was in command and therefore responsible for the regimental funds, or after the date on which the said John Munro left his office and during the period in which the defender discharged the duties of treasurer without having been so appointed. The defender has been called upon to pay over the said

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sum of £800, or such balance as may on an accounting be found due by him, to the regimental funds but declines to do so, and the present proceedings have accordingly become necessary.”

The pursuer pleaded—“1. The defender being bound to account to pursuer, as commanding officer of the regiment during the years 1912–1915, for any balance due to the regimental funds as at the date of his demitting office as colonel, and for any further balance accruing during the subsequent period during which he acted as treasurer to the Finance Committee, decree should be pronounced in accordance with the first two conclusions of the summons.”

The defender pleaded—“1. The pursuer not being in command of the battalion in question has no title to sue, and the action falls accordingly to be dismissed. 2. The action is incompetent. 3. The averments of the pursuer being irrelevant and insufficient to support the conclusions of the action, et separatim being wanting in specification, the action should be dismissed. 4. The defender having duly accounted for his intromissions while holding the appointment of treasurer of the battalion, and during his subsequent command of the regiment, is entitled to be assoilzied from the conclusions of the summons.”

Argued for the pursuer (respondent)—The War Office had held the pursuer responsible for the funds unaccounted for, but had given the pursuer the opportunity of getting the decision of the civil courts on the question of liability as between him and the defender. When the defender demitted the command of the battalion there was a balance unaccounted for upon his intromissions. The pursuer in these circumstances took over the command of the battalion, but in handing over the funds the defender had not observed the King's Regulation No. 1143, under which he was bound to render a statement showing the position of the funds, which statement fell to be laid before his successor, who before accepting liability could have insisted on an accounting with the defender. The pursuer's successors had refused to accept liability, and the pursuer himself had been held liable for the deficit which had been incurred during the defender's command. Consequently the pursuer had a title and interest to call the defender to account. His title could not be lost by the fact that the defender had delayed to produce the accounts which the pursuer had demanded from the moment he assumed command. Neither had he lost his title by the fact that he had ceased to be in command when the action was raised. Further, at common law the pursuer had a right of relief against the defender as treasurer of the battalion.

Argued for the defender (reclaimer)—The debts paid by the pursuer were not debts which either the pursuer or the defender, his predecessor in the command, were bound in law to pay, for a commanding officer was not in law liable for the debts of his battalion— National Bank of Scotland v. Shaw, 1913 S.C. 133, 50 S.L.R. 81. Hence the pursuer had no right of relief against the defender. Further, the pursuer did not aver that the defender had ingathered funds, and the King's Regulation No. 1143 only gave the pursuer a title in circumstances which did not exist in the present action. Further, there was no relevant averment inferring liability upon the defender as treasurer of the battalion, for the pursuer averred that when the defender assumed command a third party was appointed treasurer. The pursuer was not without a remedy. He could sue the defender for negligence in failing adequately to supervise the proper application of the regimental funds—Regulations of the Territorial Force, articles 39 and 241—but that question could not be raised in the present proceedings, for the necessary averments and pleas were wanting.

At advising—