Scottish Court of Session Decisions

Lord Justice-Clerk (Alness).—In this case we have one of the many unhappy chapters in the short married life of the pursuer and the defender. They are, as I have indicated, husband and wife. Before the marriage the pursuer bought the house which is the subject of this litigation for occupation by the defender and himself after marriage. The title to the house was taken in the defender's name, in the apparently erroneous belief, which was entertained by the pursuer, that a certain advantage would enure to him by adopting that course. That belief may have been erroneous or it may not—I do not think that it very much matters for the disposal of this case whether it was or was not.

In this action the pursuer seeks, in the first place, to recover the sum of £400 which, he says, he spent upon this house, and of which he says the defender has obtained the benefit. A second claim was also made by the pursuer, and a counter-claim was made by the defender, but both of these were abandoned in the Court below. We are now concerned only with the first claim made by the pursuer. The question in the case would appear to be whether the pursuer spent the sum of £400 upon this house in the honest belief that it was his property. If so, prima facie he would appear to be entitled to recover from the defender that sum. The question, in other words, is whether the principle of recompense applies in this case. If it does, then that result would appear to follow.

The Sheriff-substitute held, after a proof, that that honest belief on the part of the pursuer had been established, decided in his favour, and pronounced decree against the defender for £250. The defender's counsel has informed us that, if liability is held to be established, it is not disputed by the defender that that is an appropriate assessment of the amount due by his client to the pursuer. But, on behalf of the defender, two points have been urged on us, in reference to which it is said the Sheriff-substitute has reached a wrong conclusion.

In the first place, it is said that the pursuer's claim in this case is, on the face of it, an irrelevant claim, from which it would follow that no proof was necessary in order to clear matters up between the parties. The proof allowed, however, was a proof before answer, and that question may quite appropriately be raised at this stage. As I understood the argument for the defender on this branch of the case, it was to the effect that the pursuer was estopped by the disposition of the house and by its terms from making his present claim. It was said that the pursuer cannot contradict the terms of that deed. In my humble opinion, the pursuer in this action is not seeking to do so. I think that is an entire misconception on the part of the defender. The pursuer's case is as simple as this, that, until the case of

Newton v. Newton was decided in your Lordship's Division in 1922, he entertained a clear—though, as it turned out, mistaken—belief that he, and not his wife, was the owner of this property, and that he expended money upon the property in that honest belief. Prima facie, that appears a relevant enough claim. One must bear in mind, as I have said, that the pursuer is not, as I view the case, endeavouring to contradict the terms of the deed, but is seeking to prove by parole evidence what, as I understand the law, can always be proved by parole, namely, what the state of his mind was, what was his belief throughout. The action, in short, as I have indicated, is one for recompense, and in such an action proof prout de jure has always been regarded as permissible.

It was further said by the defender's counsel, and, particularly, by Mr Taylor, that in this action an attempt was being made to get round the Court of Session judgment in Newton v. Newton . Again I think the defender is mistaken. I think the learned Sheriff-substitute was right in the view which he took of the decision in that case when he states: “In my humble opinion all the Court of Session decided was that the pursuer had failed to prove, in accordance with the Act 1696, cap. 25, that the ex facie absolute title held by his wife was granted subject to any trust. The Court did not decide that he made her a gift of the house, or that he was ever minded to do so.” In short, the inquiry in this case is not into the legal position of matters, but into the mental position of the pursuer throughout the proceedings. The question is not with regard to the true ownership of the house, but relates to the pursuer's view of that ownership. The deed, as Lord Hunter observed in the course of the argument, may be conclusive on the question of title though not on the question of gift. The pursuer, in other words, is not here seeking, as I understand the argument, to establish that no donation was made, but is merely seeking to prove his honest belief that there was no donation.

If there is any soundness in these observations, they lead to this conclusion that, in the present action of recompense, the pursuer is neither endeavouring to contradict the terms of the disposition nor to circumvent the decision of the Court of Session. In that view, I think the proof which the learned Sheriffs allowed was properly allowed.

It was argued by Mr Macgregor Mitchell that, in the realm of recompense, there must be, in order to admit of the application of that doctrine, a colourable though bad title, and that, in a case where there was no title, the doctrine had no application. For that proposition he founded upon a sentence in the opinion of Lord Neaves in the case of Buchanan v. Stewart where his Lordship said: “The plea of bona fides, it may be remarked, necessarily implies a bad title, for with a good title the question could not arise.” Now, I think that Mr Carmont was right when, in reply to that argument, he said that the only distinction which Lord Neaves had in his mind in considering that case was the distinction between a bad title and a good title. For myself I do not think that his Lordship had in view, in that expression of opinion, such a case as we are concerned with here, where it may be said that there was no title. The test, in my judgment, is not whether there was a title or not, but whether there was bona fides on the part of the pursuer. I see no ground in law or in reason to exclude the application of the doctrine if, although there may be no title, there was a bona fide belief on the part of the pursuer that there was a good title. In support of that view Mr Carmont cited expressions of opinion by Lord Young and by Lord Mackenzie, and with these opinions I respectfully agree.

It was further said, on this branch of the case, on behalf of the defender, that the proof should have been limited to writ or oath. Again I find myself in agreement with Mr Carmont's argument when he pointed out that, if the inquiry were so limited in a case of this kind, one would exclude from consideration the one question upon which one has to clear one's mind, namely, the mental attitude of the pursuer. If the proof were limited in the way suggested from the other side of the bar, the only witness examined would be the defender, the pursuer's evidence would not be taken at all, and, accordingly, his mental attitude, which is the de quo in this case, would not be ascertained in the course of the proceedings. I therefore think that, so far as the preliminary proceedings are concerned, the learned Sheriff took the proper course in allowing a proof before answer, and that the dilatory objections taken by the defender are not well founded. [His Lordship then examined the evidence, and stated his conclusion that the Sheriff-substitute had reached a right decision.]

Accordingly, if these views are sound, they lead up to the affirmation of the interlocutor of the Sheriff-substitute which has been appealed against, and I venture respectfully to advise your Lordships to take that course.

Lord Ormidale.—I agree with your Lordship, and have nothing to add.

Lord Hunter.—[After narrating the facts and referring to the previous case of Newton v. Newton ]—It is now suggested by the defender that the present case is inconsistent with that case, and that the pursuer's present claim for recompense in respect of expenditure made by him upon the house is inconsistent with that decision. To my mind, agreeing with what your Lordship has said, there is no inconsistency whatever. On the contrary, the basis of the pursuer's claim here is that the title of the house is in the defender and that he cannot challenge that title. What he does say—and that is the foundation of his whole case—is, “I expended money during the time the title was in the defender in the belief that the defender was going to hand the property over to me when I asked her, as I all along thought she was bound to do,” The plea as regards the limitation of proof to writ or oath is not a valid plea in such an action, and I think, again agreeing with your Lordship, that the Sheriff-substitute took the right view in not so restricting the inquiry.

The inquiry has been held and the parties have been examined at considerable length, in fact, if I may say so, a considerable amount of irrelevant evidence has been allowed. But the main point is: Has the pursuer established the belief which he entertained? That is a pure question of fact, and upon that question of fact the Sheriff-substitute, who heard the evidence, has returned no uncertain answer. He is satisfied with the truth of the pursuer's statement, and he apparently is dissatisfied with the evidence given by the defender. Now, as regards that matter, I agree again with your Lordship that there is ample confirmation of the pursuer's evidence. In a case of this sort what is the pursuer's actual belief is not to be found in the testimony of other witnesses, because it is very seldom that one man can testify as to the belief entertained by another. But there are a number of facts and circumstances referred to by the Sheriff-substitute and enumerated by your Lordship which all go to confirm the view that, during the period when this expenditure was incurred, the pursuer honestly believed that he was the real owner of the house. That he had that belief is sufficient to establish the case put forward, because the case put forward is a case of recompense; and I do not think that the contention by the defender that a claim for recompense can only be put forward where the person who has incurred the expenditure has had some title or other has any foundation whatever. The passage contained in the opinion of Lord Neaves, as your Lordship has pointed out, is a passage where a contrast is being drawn between a good and a bad title, and, so far as I know, it has never been held to be exclusive of a claim for recompense put forward by anyone able to convince the Court that he has spent money on another man's property for the good of that property in the belief that the property was his own or that he had a good claim in respect of the expense. The doctrine, I think, is well recognised in a number of illustrative decisions, and I do not think there is anything exceptional or anomalous in applying it to the circumstances of the present case.

Lord Anderson.—The first conclusion of the initial writ—with which we are alone concerned—is based on the legal doctrine of recompense, which is an equitable doctrine. This is a claim which is proveable prout de jure, as is evidenced by the cases referred to by the Sheriffs and, in particular, the cases of Bell, Dobie, and Hamilton. The pursuer in the present case is not attacking the defender's title, which has been unassailably set up by the judgment in the Court of Session action of Newton v. Newton .

The claimant for recompense must establish three things: (1) that expenditure was made by him; (2) that this expenditure was made in error; and (3) that this error was justifiable or excusable. It is thus obvious that the proof in a case of this sort is mainly concerned with the state of mind of the pursuer at the time when the expenditure was made.

The main ground on which this claim for recompense is based, and which the Sheriff-substitute has affirmed, is this—that the pursuer, at the time when he made the improvements and until 12th January 1923 when the final interlocutor in the Court of Session action was pronounced,

believed that he was the owner of the house; that he, acting in that mistaken but honest belief, expended money in improving the house which he now knows belongs to the defender; and that the defender as owner of the house has been lucrata by that expenditure.

Now, in answer to this case, the defender advanced two main contentions. The first was that the pursuer's averments, as to which proof has been taken, are irrelevant, and the second is that the pursuer has not proved his case. As to relevancy, the defender's argument, as I understood it, was this: the disposition must necessarily be founded on by the pursuer in order to instruct the defender's ownership of the house. That deed, it is said, proves donation, trust having been negatived by the Court of Session. The meliorations, it was argued, must be held to be part of the gift of the house, and the gift of these, just as much as the gift of the house, is completely proved by the terms of the disposition. It is incompetent, the appellant argued, to attempt to negative this evidence of donation by parole proof.

The answer to all this seems to be that the title is not being attacked and that the inquiry in the case is as to the pursuer's state of mind when the improvements were made by him. The pursuer may be taken to have made a gift by reason of the terms in which the disposition is expressed, although it may be determined, as the result of inquiry, that he did not really intend to make a donation. It therefore seems to me quite competent to inquire by parole testimony as to this state of mind of the pursuer, and the averments of the pursuer as to this matter appear to me to be relevant and to justify the proof allowed by the Sheriffs.

Another argument urged on behalf of the defender was that, in order to warrant a claim for recompense, there must be a title in the pursuer, which must necessarily be a bad title; but, it was contended, if the pursuer had no title at all, there was no room for the claim. I am unable to agree with this contention. It is, in my opinion, enough if the pursuer believed at the time that the improvements were made that he was in a position to claim and get a title as owner. Accordingly, the first contention of the defender to the effect that the pursuer's case is irrelevant seems to me not well founded. [His Lordship then dealt with the evidence, and stated his conclusion that the Sheriff-substitute had reached a right decision.]