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United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> William Morison, of Preston Grange, Esq; v. James Smith of Whitehill, and David Burton Glazier in Edinburgh [1719] UKHL Robertson_249 (8 April 1719)
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Cite as: [1719] UKHL Robertson_249
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SCOTTISH_HoL_JURY_COURT
Page: 249↓
(1719) Robertson 249
REPORTS OF CASES ON APPEAL FROM SCOTLAND.
Case 54.
v.
Subject_Society. —
The minutes of a meeting of a company, subscribed by the preses, bore that certain members sold to another their shares of the joint stock at a given price; the person to whom the shares were so assigned afterwards entered to the management of the whole concern, and applied the profits to his use; it is found that he was obliged to pay to each partner the sums mentioned in said minute, though it was objected, that the minute was erased in some sentences, and that there was locus pænitentiæ till a more formal assignment was made.
The assignee is also ordered to free the assignors from the debts of the society, and pay them interest on the sums found due.
Subject_Compensation. —
In a suspension, the suspender's plea of compensation is rejected.
Subject_Costs. —
20 l. costs given against the appellant.
By articles of agreement, executed in March 1698, between the appellant, Sir William Binning, Patrick Steel, the respondents, and others, it was agreed to set up and carry on a glass-work in Morison's Haven, at their mutual expence, and to their mutual profit, and to consist of shares of 50 l. sterling each share; and it was agreed, that if any of the copartners should be inclined to sell or assign his share, it should not be lawful for him so to do, until he should make the first offer thereof to some of the copartners, and if they should refuse, he might then sell, so as it were not at a lower value than what was offered by the said copartners: They were likewise by the said articles to appoint some of their own number to be overseers of the work; and they named George Livingston, one of the copartners, to be their cashier or treasurer.
By other articles of agreement in April thereafter, between the appellant and the other copartners, and Daniel Titterie, glass-maker in Newcastle, the said copartners leased to Titterie the said glass-manufactory and premises for 9 years, commencing at Whitsunday 1698. At a meeting of the copartners in September 1699, Sir Wm. Binning and Patrick Steel, two of them, surrendered their shares to the appellant, he paying to each of them
Page: 250↓
The said glass-work was carried on amicably by the company till the 21st of October 1699; when at a meeting of the copartners a transaction took place, relative to a resignation by the respondents and one other of the copartners, of their shares to the appellant. In 1700, the respondents and the other partners brought an action against the appellant, before the sheriff of Edinburgh, stating, that among others the respondent Smith had paid in 100 l. sterling towards carrying on the said manufactory, and the respondent Burton 76 l., for which sums they had got receipts from the said George Livingston, cashier to the copartners; that at the said meeting on the 21st of October 1699, the respondents, and one other of the copartners, resigned their shares to the appellant, he paying to each of them 10 l. per annum, during the continuance of Titterie's lease, and after the expiration of the said lease paying what should then remain due upon the original shares, upon which terms the appellant accepted the same; and, that this, (as all the other transactions of the company were) was marked in the minutes of their sederunts, and signed by the president of the meeting: that the appellant having thus purchased almost all the shares of the manufactory, he took the sole management of the works upon himself, and on the last day of February 1700 granted a factory to one James Smith, to oversee, inspect, manage, act, and do as principal clerk, overseer, and accountant at Morison's haven, and uplift all debts owing to the said glass work, &c. and generally to do every thing concerning the premises as if the appellant were personally present. And their action concluded, that the appellant should be decerned to make payment of the several sums agreed upon. The sheriff, on the 2d of October 1700, decerned against the appellant for payment to each of the pursuers of 10 l. sterling yearly, beginning the first year's payment upon the 21st of October 1700, and so on yearly thereafter until the term of Whitsunday 1707, when the contract with the said Daniel Titterie expired, and at that term the appellant to make full payment to each of them, of what should remain unpaid of their original shares advanced and paid in, among others, the respondent Smith's share being 100 l. and the respondent Burton's being 76 l, with the interest of the Did sums, and to relieve the respondents of all debts contracted and loss sustained upon account of the said works, and further to pay 14 l. Scots to each of the respondents for expences.
The respondents extracted the sheriff's decree, and gave the appellant a charge of payment; and he thereupon presented a bill of suspension to the Court of Session. When this cause came first to be heard, the Court, before determining the principal question, directed the respondents and the other copartners to
Page: 251↓
A proof was accordingly taken; the import of which as stated by the respondents was, that it appeared that before the time of the resignation of the respondents, the affairs of the said glass-manufactory were managed by a committee of the society in general, but after their resignations the appellant managed all by himself, and he alone gave a commission to Mr. Smith to act as overseer of the works; and Mr. Smith deponed, that as the commission was given by the appellant alone, so with him only he treated, and with no other of the society; and the appellant solely managed, bought and sold every thing of the said manufactory by himself, he only paid the charges and applied the profits to his own use. The appellant did not examine any witness to prove his allegations, and the term was circumduced against him.
The cause coming to be heard before the Lord Ordinary, his lordship in 1705, found it instructed by the writs produced, that the respondents had paid their shares, and allowed the appellant, notwithstanding of the circumduction of the term, to prove by the respondents' oaths the having of any writs or books belonging to the society, and ordained the respondents to produce any such as they should acknowledge by their oaths, but found it not clearly proved by the respondents' renunciation, and the appellant's acceptance, that the appellant was obliged to release the respondents of the debts of the society, unless the same be instructed aliunde.
About this period Livingstone, one of the partners, made over his claims to the respondent Burton: the action was afterwards discontinued for upwards of ten years; but being again revived, the Court, in absence, gave judgment against the appellant, confirming the original decree of the sheriff of Edinburgh. The respondents thereupon gave him a charge of payment; and arrested the rents in the hands of his tenants. They also brought a process of forthcoming: and in that action, the appellant appeared for his interest. The Court in June 1717 adhered to their former decrees, and ordained the tenants to make payment in terms thereof.
The appellant presented another bill of suspension, contending that he and his tenants were forced to pay these sums without any legal proof of their being due; and he produced bonds and other writings by which, he contended, it appeared, that the respondents were at the same time debtors to the appellant in far greater sums than those claimed by the respondents. The Court on the 12th of July 1717 found it proved, that the shares of the
Page: 252↓
The appellant reclaimed, and after answers for the respon de the Court on the 14th of November 1717, “having considered the said cause with the sederunt of the partners of the 21st of October 1699, and the factory granted by the appellant in 1700, to the said Smith, found it proved that after the said sederunt, the appellant acted and managed as proprietor of the shares in the said glasswork, which belonged to the respondents; and therefore found that the appellant was obliged to accept of the disposition of the said shares, and that he was obliged to make payment to the respondents in terms of the said sederunt, and decerned accordingly.” And to this interlocutor, the Court adhered on the 27th of December 1717, and the 15th and 21st of January 1718.
Entered, 8 Feb. 1717–18.
The appeal was brought from “a decree of the sheriffs of Edinburgh of the 2d of October 1700, and of two several interlocutors of the Lords of Session of the 12th of July, and 14th of November 1717, and others in the cause,”
Heads of the Appellant's Argument.
The respondents contended, that they had proved their resignations, and the appellant's acceptation thereof, both by an act of sederunt, or meeting of the company, and by the depositions of some witnesses. But that pretended meeting consisted chiefly of the respondents, who had entered into a concert to withdraw at the same time, and the depositions are of the same sort; besides the pretended act of the meeting is such as never was offered in evidence in any court, being crossed and cancelled in whole paragraphs; which if it had been ever so regular, could never have bound the appellant, unless he had either signed his acceptance at the same time, or had had the shares made over to him, by deeds in writing, as is usual in matters of consequence, by the law of Scotland, before which there is locus pænitentiæ allowed in any treaty or agreement.
Had it been proved (as it never has) that the respondents had resigned, and that the appellant had accepted regularly, yet it appears very unjust to have allowed the respondents all the sums that they themselves asserted they had advanced for the works, without any proof of such advance; and before clearing off the debts due by the company, and before they had accounted for the product of the manufactory, proved to be in their own hands at the time, as public officers of the company and otherwise; and before any account of the partnership was taken or stated.
The said decrees ordained the appellant, not only, to pay the aforesaid sums, but likewise interest for the same, whereas
Page: 253↓
It appeared in court by bonds and other authentic documents, that the respondents were debtors to the appellant in far greater sums than those claimed (had they been ever so just) and so these claims were ipso jure extinguished by compensation.
1592. c. 143.
The respondents objected, that compensation is denied by act of Parliament, if the same be neglected to be proponed by the party before the decree be entered; which being the appellant's case, he therefore could not have the benefit thereof. But the first decree complained of was in the appellant's absence, when he was engaged in the service of the government; which was the reason of his preferring so many bills of suspension afterwards, in which he fully instructed his grounds of compensation, and even where the law denies compensation, in most cases it allows of retention to stop execution, being matter of discharge, especially where it is evident, as in this case. Where a person having a ground of compensation, is refused the same, it is in effect likewise to refuse all action upon the ground of debt, be it ever so just, because the party against whom the compensation was to operate may not be able to allow satisfaction any other way.
Heads of the Respondents' Argument.
The appellant contended, in the court below, that the original contract of co partnership was blank in several particulars, especially as to the quantity of capital stock, and that the writer and witnesses were not designed, which was necessary by law. But this being a contract in relation to merchandize is uberrimæ fidei, and the solemnities in other writings are not required in such deeds; especially where the same have been followed out by several parties, by acting according to the same; and as to filling up the capital stock, that could not be, since it was not certain how many sharers or subscribers they might have.
With regard to the obliteration of the minutes of sederunt founded on by the appellant; there is no question, but the sederunts of all companies or societies, when legally signed, are probative for or against any member of the society, especially such as were present, who, if any thing material had been omitted, had an opportunity of having it rectified; and in this case there was no direction for any writing more solemn to be made use of where the shares of the society were transferred from one partner to another. And the appellant certainly looked upon this resignation as marked in the minutes as sufficient, since he after that time took upon himself the sole management of the glass work, without ever consulting the respondents, or the other resigning partners, and did likewise under his hand declare, he had right to the respondent Smith's share; and he had no other right but the resignation made in the said sederunt. The obliteration was only of two pretests taken by the appellant and the respondent Smith
Page: 254↓
The appellant objected, that the respondents had not paid up their shares: But that they had, appears by the receipts of the treasurer to the society, who was legally authorized to receive the same.
He objected also, that the respondents ought to bear their proportion of the debts owing by the co-partnership prior to their resignation: but it were very unreasonable, that the respondents should be answerable for the partnership debts, since they had upon terms parted with their shares to the appellant, who upon that account got all the co-partnership stock into his hands, which must and ought to be the fund for payment of these debts.
Judgment, 8 April 1719.
It is ordered and adjudged, That the said petition and appeal be dismissed; and that the decree and interlocutors therein complained of be affirmed: and it is further ordered, that the said appellant do pay, or cause to be paid to the said respondents the sum of 20l. for their costs in respect of this appeal.
Counsel: For Appellant,
Tho. Lutwyche.
Pat. Turnbull.
For Respondents,
Rob. Raymond.
Will. Hamilton.