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United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Thomas Richardson, W. S. (for Douglas, Heron and Company) and Others - Mackenzie v. Countess-Dowager of Hadinton, and Husband - Fullerto - Adam [1824] UKHL 2_Shaw_406 (16 June 1824)
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Cite as: [1824] UKHL 2_Shaw_406
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SCOTTISH_HoL_JURY_COURT
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(1824) 2 Shaw 406
CASES DECIDED IN THE HOUSE OF LORDS, ON APPEAL FROM THE COURTS OF SCOTLAND, 1824.
1 st Division.
No. 50.
v.
Subject_Foreign — prescription — Bankrupt. —
A Scottish bankrupt under sequestration having gone to Russia, and resided there for more than ten years, and till his death; and having left a fortune, to which his daughter, residing in Scotland, succeeded; and she having brought an action of declarator before the Court of Session against her father's creditors, to have it found that the debts were extinguished by the decennial prescription of Russia, and null and void; and the Court having decerned in terms of the libel;—The House of Lords found, That the debts were not null and void, and extinguished; but remitted to the Court of Session to make further inquiries into the effect of the law of Russia, under the circumstances of the case.
Charles Gascoigne, a native of Scotland, was a partner of Francis Garbett and Company, merchants at Carron Wharf. On the 25th June 1772, the estates of that Company, and of Mr Gascoigne as an individual, were sequestrated under the 12. Geo. III. ch. 72. Mr William Anderson, writer to the signet, was appointed trustee, in whose favour Mr Gascoigne executed a conveyance of the effects both of the Company and of himself, and under whom he acted as manager. The sequestration had, under a provision of the above statute, been superseded by a trust; but, on the 23. Geo. III. ch. 18. being passed in 1783, it was revived, and proceedings took place as if it had been an original sequestration. Mr Hogg was named interim factor, and afterwards trustee,—Mr Gascoigne was examined before the Sheriff,—the creditors produced their grounds of debt and affidavits, and regular meetings were held. Mr Gascoigne continued to reside at Carron Wharf, and to act as factor for the trustee, till 1786, when he left Scotland, and went to Russia. He there realized a large fortune, and in 1798 he made a proposal, through his friend Mr Elphinstone, to pay a sum of money to the trustee, in consideration of a discharge being granted to him by his creditors. A great deal of correspondence took place in relation to this subject, in the course of which it was never alleged that the debts were extinguished; but, on the contrary, the proposition for a discharge was made on the assumption of their being still in subsistence. This negociation, however, did not prove succesful; and, in the meanwhile, Mr Gascoigne had indorsed and remitted certain bills to his daughter, Lady Hadinton, residing in
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In defence the creditors denied there was any such law in Russia having the effect alleged; and they maintained, that their debts could not be affected by the law of Russia; but that, supposing there was such a law, and that their claims could be affected by it, still they were protected by the sequestration, and taken from beyond the effect of the Russian law by the terms of the correspondence.
The Lord Ordinary appointed Lady Hadinton and her husband to give in a condescendence of the facts they averred, and “particularly as to the residence of Mr Gascoigne in Russia, and the law of that country as applicable to this case.” Thereafter his Lordship remitted to George Joseph Bell, Esq. advocate, to make up a Case for the opinion of Russian Counsel, who accordingly did so, and it having been approved of, it was laid before Mr A. Brockhausen and Mr George Hartmann, Russian advocates. In the Case, after stating the facts, and referring to the correspondence, these queries were put to the Counsel:—
“I. Without having any regard to the proceedings in Scotland, or the foreign origin of the debts, be pleased to say,—
1. Whether, by the law of Russia, a person who takes, under the will of a father, the estate or effects which belonged to him, does thereby become responsible in Russia for his debts? And if so, whether for his foreign debts, as well as for those due in Russia?
2. Whether there is any difference between such responsibility, supposing it to be incurred, and the responsibility of the original party, either as to endurance or otherwise?
3. Whether there be, in the law of Russia, any limitation or prescription, by which the right of a creditor to demand his debt, either from the debtor himself, or from his heir, is discharged, or cut off, in consequence of the lupse of time; ten years
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4. Whether, if any judicial demand has been made in Russia, and the creditor has ceased to persist in that demand, the debt would be discharged by prescription? And what period of cessation from such action or demand is requisite to produce this effect?
II. Taking the supposition that, by the law of Scotland, the debt-would be discharged by prescription, and that the proceedings in bankruptcy would have no effect in preventing the rule, of prescription from applying, be pleased to say,—
1. Whether the creditor would still be admitted to make his demand in Russia against the original debtor, if alive? or against his heir taking his succession, after his death?
2. What would be the effect, in the Russian tribunals, of the correspondence between the parties, in reviving a responsibility which otherwise would have been held as discharged?
III. Taking the supposition, that proceedings in bankruptcy in Scotland, if not overruled or counteracted by the Russian law of prescription, have kept the debt alive there, so that it might be demanded from the original debtor, if still in life and in Scotland, or from his heir, being in that country, and having effects derived from the will of the original debtor, be pleased to say,—
1. Whether would the debt be demandable also in Russia; either from the original debtor, if alive, or from his heir in possession of his estate and effects? Or would any Russian law of prescription be held to discharge the person of the debtor, or his effects, from responsibility for the debt?
2. Would the correspondence already referred to have any effect in establishing, in the Russian tribunals, a responsibility not otherwise incurred?”
To these Mr Hartmann returned the following answers:—
“I.—1. As soon as the heir takes possession of the property of the deceased, he becomes responsible for the debts and other obligations of the deceased, not only to the whole amount of what he has inherited, but as far as his own personal means will extend; and that responsibility attaches to debts both in and out of Russia. Code of Laws (Oulogenie).—Ordinances of the years 1714, 1716, and 1725.—Regulations as to Bills of Exchange.—Bankrupt Regulations.
2. There is no difference between such a responsibility and
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3. The 4th section of the Imperial Manifest of the 28th June 1787, fixes the prescription of ten years for every process whatever; and after the expiration of this period, the right of a creditor to demand his debt, either from the first debtor or from his heirs, becomes completely null and void; and this annihilation of the right, after the lapse of ten years, can neither be prevented nor interrupted by judicial or extrajudicial forms.—Bankrupt Regulations, Part II. Section 13. § 69.
4. In the event of a judicial demand having been made, and that the creditor has ceased to persist in it, ten years must elapse after that cessation, to produce the effect of prescription.—Imperial Manifest, 28th June 1787, § 4.—Bankrupt Regulation, Part II. Section 13. §69.
II.—1. If, by the laws of Scotland, a debt becomes annihilated by prescription, the creditor in that case cannot make his demand in Russia against the first debtor, or against the person who has inherited from him after his death, supposing the time fixed for the prescription in Scotland to be also at least ten years.
2. It is true that, according to the Military Regulation, admitted in all civil causes, (Process, 2d Part, chap. 4. §§ 2, 3, and 4.), the correspondence which has existed between the parties interested may give rise to motives for entering upon a new process; but as that regulation, as well as the ordinance of the 5th November 1723, are only expressed in general terms upon the forms of proceedings, and as no positive law exists declaring that a privates particular correspondence entered upon between the debtor or his heirs with the creditors, after the prescription has been in operation, might oblige that debtor to pay his creditors a debt already superannuated, it is impossible to guarantee the fortunate result of such a process. Still it is true, that there exists similar instances where the Supreme Ruling Senate has pronounced in favour of the creditors; but these decisions have only been given in special cases, and they have not been promulgated as established laws. Further, no precedents can ever be considered as laws; according to lib. 13. Cod. de Sent. et Interloc. where it is said, Non exemplis sed legibus adjudicandum. In short, in entering upon such a process, the adverse party must be upon the spot; and the duration of such a litigation is not only very long, but subject to considerable expense.
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III.—1. Supposing that the bankrupt proceedings in Scotland have had the effect of perpetuating and continuing the debt, and that there had been a formal judgment against the debtor, of a date within the period of ten years; then the creditors might demand, in Russia, the payments from the first debtor, in case he was alive, or if he was dead, from his heirs.
2. The correspondence which has subsisted between the parties interested may contribute to establish before the Russian tribunals a responsibility, as it has been before observed.”
Mr Brockhausen made these answers:—
“I.—1. Every heir entering into the possession and enjoyment of the property of a debtor, is under the obligation of paying the debts of the deceased, wherever they exist, without any distinction or contravention whatever;—as it is prescribed in the Code of Laws, (Oulogenie), chap. 10. §§ 132. 207. and 245.—Ordinances of the years 1714, 22d March ; 1716, 15th April; 1725, 28th May.—Regulation regarding Bills of Exchange, 1729, 16th May, § 22.—Ordinances, 1730, 9th December; 1731, 17th March; 1756, 6th September; 1763, 7th May.—Bankrupt Regulations, 1800, 19th December; First Part, 161. and 165.; Second Part, § 110.
2. Foreign creditors enjoy the same rights as those living in the country; and the heir, in accepting the property, even if of less value than the amount of the debts, becomes personally responsible for the whole, and must make up the deficiency from his own funds.—Bankrupt Regulations, §165., and Second Part, § 110.
3. Any debt not judicially claimed, or process, although instituted, and not followed up during a laps of ten years, is annulled and condemned to eternal oblivion, by the law alone, without intervention of the debtor. Manifest of the year 1787, 28th June. But when there is no interval of ten years from petition to another, or of any other proceeding judicially verified, the reclamation, or process, remains in full force.
4. See Answer 3.—The debtor may produce the act of prescription the day following the last day of the expiration of the tenth year.
II.—1. According to the Manifest of 1787, no reclamation would be any longer admitted, either against the debtor, if in life, or against his heirs representing him after his death. It would be equally the same if there was a prescription of a foreign tribunal.
2. The correspondence would necessarily revive motives to
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III.—1. If the debts were recognized as valid by a foreign tribunal, and that there was a formal judgment against the debtor of a date within the period of ten years, then a judicial execution against the property of the debtor, or of his heirs, would be admitted in its full vigour; and there exists no law against it.
“2. The correspondence, written or signed by the hand of the debtor, or of his heirs, may serve as a motive for establishing in Russia a new process in due form, (plaidoyer), according to the ordinance of 1723, 5th November; but the correspondence of a third person cannot he sustained as proof, unless it is accompanied by a full power; so that, to enter upon such a process, it would be necessary for the adverse party to be upon the spot. N. B.— The progress of such a process is very slow, and the expense considerable.”
The Lord Ordinary having reported the case upon informations, and the actions at the instance of Gibson and Balfour and Mr Home against Lady Hadinton having also been brought before the Court at the same time, their Lordship, on the 6th of March 1821, pronounced this interlocutor:—
“The Lords repel the defences in the process of declarator and extinction brought at the instance of the Countess of Hadinton and her husband, and decern and declare in terms of the conclusions of the libel in the said process; and in the several processes brought against the said Countess and her husband, at the instance of Messrs Gibson and Balfour and the late George Home of Paxton, the Lords sustain the defences, assoilzie the defenders from the conclusions of the several libels in the said processes, and decern accordingly; and find neither party liable to the other in the expenses of process in the said actions, or any of them.” *
Against this judgement Mr Richardson, (who had now succeeded Mr home as manager of Dougles, Heron and Company), together with Gibson and Balfour, and the trustee in the sequestration, (which was still in dependence), appealed, and maintained that it was erroneous,—
1. Because (abstracting from the sequestration) Mr Gascoigne
_________________ Footnote _________________ * Not reported.
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2. Because the proceedings in the sequestration were sufficient to prevent Mr Gascoigne from pleading the Russian law of prescription in the Court of Session. A sequestration is a judicial process for recovering payment of debt; and it is impossible to maintain, that if an ordinary action had been raised, and the defender, during its dependence, had gone to Russia, and remained there for ten years, he could plead a defence that the debt was thereby extinguished. If not, then as the sequestration was both an action of constitution and of realization, and the Bankrupt Statute expressly declared that the lodging of a claim should have the effect to interrupt prescription, it was impossible that Mr Gascoigne, or his representative, could maintain the present plea. And,
3. Because, even if the Russian law of prescription were held admissible, the respondents had not established, by the opinions of the Counsel, that it would have the effect to extinguish the debt under the circumstances of this case, and particularly with reference to the correspondence.
On the other hand, it was maintained by the respondents,—
1. That long before the death of Mr Gascoigne, the claims of the appellants had been completely extinguished by the prescription of the law of Russia; which, as being the law of the domicile, must be held to determine the question of his liability. Whatever may have been the origin, in theory, of the law of prescription, its admitted operation is to extinguish the rights of the creditor, or, at all events, to afford the debtor a plea in bar of those claims, as complete as if a regular discharge had been granted by the creditor. When the creditor and debtor are both resident in the same country, the law of that country, of course decides the question. When they reside in different countries, in which different periods of prescription are introduced, the question becomes more difficult; but vet the adoption of the
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2. That the circumstance of the existence of the sequestration could make no alteration in the case. There was no similarity between an ordinary action and a sequestration. It may be true, that when an action is raised against any party, and issue fairly joined, the dependence of such action will bar prescription. But although the application for a sequestration is a measure directed against the debtor, and if the demand is opposed, a procedure arises, which, like any other depending action, might bar the currency of any prescription, of which he might otherwise have had the benefit, against the creditor making the application; yet, upon the final award of sequestration, that dependence is closed; and the sequestration is just the execution of the decree of the Court, divesting the bankrupt of the
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And, 3. That as the object of the present action was to have it found, that the respondent, Lady Hadinton, who had acquired, not a Scottish but a Russian succession, was hot liable to the claims of the creditors, the proper question was not, whether the debts could have been enforced against Mr Gascoigne, but whether she, as taking under the law of Russia, was responsible for these debts, which she maintained she was not.
The House of Lords pronounced this judgment:—
“The Lords find, that the debts due to the persons named and designed in the summons of the said respondents, or to their predecessors, authors,
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or cedents, were not, at the time of the death of the said Charles Gascoigne, nor are now, null, void or extinguished in law: And with this finding it is ordered, that the said cause be remitted back to the Court of Session to review generally the interlocutor complained of; and, in reviewing the same, the said Court is especially to consider, whether, by the law of Russia, dub regard being had to the proceeding in the sequestration, and its effect in preserving the rights of the creditors till their debts are fully satisfied, and to the communications between the said Charles Gascoigne, and also between the said Countess and the trustee under the said sequestration, the debts of the said creditors could now be enforced in Russia against the representative of the said Charles Gascoigne there; and for that purpose to obtain farther opinions of Russian lawyers upon a more full and accurate statement of the nature and effect of the process of sequestration, and of the aforesaid communications: And further, in the several processes brought against the said Countess and her husband, at the instance of Messrs Gibson and Balfour, and the late Mr Home of Paxton, particularly to consider the time and occasion of Stein's bills being made payable to the said Countess, and whether the Said bills, or the sums recovered upon them, can or cannot be considered as effects of the said Charles Gascoigne, received by the said Countess in Scotland; and whether, if they can be considered as the effects of the said Charles Gascoigne received by the said Countess in Scotland, she is on that account liable to any, and What extent, to the said pursuers in those processes, or any of them: And after reviewing the said interlocutor, that the said Court do and decern in the said cause as to them shall seem meet and just.” *
My Lords,—It appears that a gentleman of the name of Charles Gascoigne was a partner in a firm of Garbett and Company, merchants
_________________ Footnote _________________ * After certain proceedings under the remit, the parties settled the case.
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My Lords,—Mr Gascoigne, for some years after the original sequestration, acted as factor to the trustee, until the year 1786, when he left Scotland, and went to reside in Russia. There he resided for a great number of years, until his death, which happened in the year 1806; and, during his residence there, it appears that he realized a very considerable property. Wishing to return to Scotland in the year 1798, propositions were made by a gentleman of the name of Elphinstone, on behalf of Mr Gascoigne, to compromise with his creditors; but that negotiation proved ineffectual. The debts of this Company were extremely large. There had been a dividend of ten or twelve shillings in the pound paid, but a very large balance remained. Mr Gascoigne at this time proposed to pay the sum of L.10,000 to get relieved from that sequestration. The result however was, that the negociation entirely failed. In the year 1806, Mr Gascoigne died in Russia, conveying, by a will made in Russia, his succession to his daughter, the Dowager Lady Hadinton, who is one of the respondents in this case. After his death, proposals were again made by Lady Hadinton to compromise with the creditors; but these proposals were ineffectual, and no compromise took place.
My Lords,—It appears that, previous to Mr Gascoigne's death, certain bills on a person of the name of Stein had been drawn, payable to Lady Hadinton, but drawn certainly on account of Mr Gascoigne, then residing in Russia, and that Lady Hadinton, as the person named in those bills, ultimately obtained payment of them from Stein. In consequence of these circumstances, in the year 1812 actions were brought against Lady Hadinton, as her father's executrix, and against her husband; one by two persons of the name of Gibson and Balfour, who brought an action for reducing the bills under the statute of 1621; and another brought by a gentleman of the name of Home of Paxton, factor and manager for Messrs Douglas, Heron and Company, who
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My Lords,—In consequence of these proceedings, Lady Hadinton, in order if possible to put an end to those claims, instituted, in the year 1816, an action of declarator; and it will be important to call your Lordships' attention to the conclusions of the summons in that action Your Lordships will be thereby informed what it was that Lady Hadinton sought to have declared in that action. My Lords, that summons, after narrating shortly the same facts I have stated to your Lordships, proceeded to state, that, in consequence of Mr Gascoigne's residence and domicile in Russia, and by the laws of Russia, his debts were totally discharged and extinguished by prescription. It then goes on to state, “that during his residence in Russia he held various employments under the Russian government, and became a public accountant, liable to that government for large balances and otherwise, which, with other large debts which he had contracted in Russia to natives of that empire, amounted to a sum exceeding the funds which had come into his hands while he lived there, consisting of the salaries and other profits arising from his employments. That the said Charles Gascoigne had not the good fortune to obtain formal discharges from his creditors in this country; and finding, or suspecting that they were disposed to withhold such discharges, in expectation that he would be able to realize a considerable fortune in Russia, and would return with it to his own country, and that they would pursue their claims against him, though the debts were extinguished by the Russian prescription as aforesaid; and the said Charles Gascoigne entertaining hopes that he would be enabled, through the liberality or munificence of the Russian government under which he had held important situations, and in which he had been useful, to make an amicable transaction with the said creditors; and being desirous of conciliation with them, although he was not, in any respect, bound in law to pay the debts or balances thereof appearing in the said sequestration, he did, of his own accord, make several offers to the said creditors; first, of the sum of L.5000, and afterwards of the sum of L.10,000 Sterling, out of funds then in his hands in Russia, on condition of receiving from the whole of the said creditors, without exception, an ample and full discharge of all their debts.”
The summons then states, “That the said Charles Gascoigne died possessed of considerable property in Russia, real and personal, but charged with, and liable to the payment of large debts due to creditors, natives of that empire, and particularly subject to the result of a settlement of the above-mentioned accounts of long standing and of immense magnitude between the Emperor of Russia and him,
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“that the said Ann Countess-dowager of Hadinton, and her said husband, pursuers, and all others, the family, children and representatives of Mr Gascoigne, are discharged of the said debts or pretended debts;”
and that the creditors should desist from molesting them on account thereof in all time coming.
My Lords—Defences were lodged to this libel; and afterwards the actions brought against Lady Hadinton were conjoined with the process brought by Lady Hadinton and her husband. The action came on before Lord Gillies on 11th July 1816, who ordered the pursuer and her husband “to state a special condescendence, in terms of the Act of Sederunt, the facts they aver and offer to instruct in support of the conclusions of the libel, particularly as to the residence of Mr Gascoigne in Russia, and the law of that country as applicable to this case; and when lodged, allows the same to be seen and answered.”
My Lords,—A condescendence was given in, in terms of this order, which was followed by answers for the appellants, in which they, referred to an opinion they had just obtained from Mr Brockhausen, an eminent Counsel at St Petersburg, on the question of the Russian law;
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In consequence of that, my Lords, a case was prepared by Mr Bell, advocate, approved of by the Lord Ordinary, and transmitted to Peterburg for the purpose of obtaining the opinion of Counsel there; and the opinion of two gentleman, who are represented as being very eminent lawyers in Russia, was obtained, to which I shall have to call your Lordships' attention presently. Upon these opinions being returned, and on the case coming on before the Court, they pronounced the interlocutor which I am about to read to your Lordships:—
“Upon the report of the Lord President, in the absence of Lord Gillies, and having advised the informations for the parties, the Lords repel the defences in the process of declarator and extinction brought at the instance of the Countess of Hadinton and her husband, and decern and declare in the terms of the conclusions of the libel in the said process; and in the several processes brought against thee said Countless and her husband at the instance of Messrs Gibson and the late Geogre Home of Paxton, the Lords sustain the defences assoilzie the defenders from the conclusions of the several libels in the said processes, and decern accordingly; and find neither party liable to the other in the expenses of process in the said actions or any of them.”
My Lords,— In consequence of this interlocutor of the Lords of Session, an appeal has been brought to your Lordships' House; and, my Lords, I took the liberty of reading to your Lordships the conclusions of this summons of Lady Hadinton, because your Lordships perceive that, by the interlocutor which I have read, the Lords of Session decern and declare in terms of the conclusions of that libel. The consequence, therefore, of that interlocutor is this, that one of the terms of the conclusions of the libel being, that all the debts due to the creditors in Scotland, and who had come in and remained under sequestration, are declared to have been, not only at the time of the death of Mr Gascoigne, but at the time of the pronouncing that interlocutor, and in all time coming, null, void, and extinguished in law. That is so declared by the Court of Session.
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My Lords,—Several very important questions have arisen upon this judgment pronounced by the Court of Session:— 1 st, Upon the effect of the Russian law upon the debts contracted by Mr Gascoigne in Russia, which, indeed, is the principal question in the cause, and which branches itself into two or three questions; namely, first, as to the general effect of that law upon debts so contracted; next, upon the effect of a sequestration in preserving those debts against the law of prescription in Russia; and a third question also arose upon the effect of those communications, first, between Mr Gascoigne and his agent Mr Elphinstone and the trustee and creditors in Scotland, and afterwards on the part of Lady Hadinton herself, how far those communications and those offers would have the effect of interrupting that law of prescription which is said to arise in Russia, supposing the Russian law to be that by which the case is to be governed. My Lords, there were other questions subordinate in point of importance, but, at the same time also not unworthy of attention, I mean with respect to these interlocutors, as affecting the actions of the creditors brought against Lady Hadinton; because your Lordships will perceive by this interlocutor, the defenders in those actions, Lady Hadinton and her husband, are assoilzied wholly from the conclusions of the several libels at the instance of those creditors; and consequently, if that interlocutor was right, those creditors are adjudged by that interlocutor to have no claim against her in respect of those bills of Stein which she received during the lifetime of Mr Gascoigne in Russia, and which were payable to her undoubtedly on account of her father.
Now, my Lords, with respect to the first proposition which is affirmed by this interlocutor, namely, that there being in Russia this law, that debts are not recoverable after they have been contracted ten years, and which is said by this interlocutor to have totally excluded those debts in Scotland, this question arises,—When debts are contracted in Scotland or in England, and which are recoverable in the courts of that country, and the debtor chuses to go and reside in a foreign country, by the law of which country debts cannot be recovered in that country after the period I have mentioned of ten years, whether the law of Russia, though it might be available by a party resident there, if he were sued in the courts of Russia, is to have the effect if that party should return to Scotland, or if property should subsequently accrue to him in Scotland, not merely of enabling him to oppose any claim made against him in the courts of Russia, but to have the effect of positively extinguishing and annulling those debts in Scotland? for that is the proposition which is adopted by this interlocutor, which affirms the terms of the conclusions of the libel. And I may here take the liberty of saying, that where a libel contains various conclusions,—though I know it is very often the practice of the Courts of Scotland, if they are of opinion one of those conclusions is supported, to decern generally in terms of the conclusions of the libel,—your Lordships see in this case, as in many others which I have seen
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My Lords,—Having in this case had the advantage of seeing the opinions delivered by the learned Judges in the Court below, undoubtedly I cannot but see that they have proceeded mainly upon that proposition, namely, that the effect of this prescription in Russia is to annual and extinguish, and prevent the recovery of those debts in Scotland. But, my Lords, though that undoubtedly is the effect of this interlocutor, and the result of the opinion of the Judges, yet I observe all of them consider, that if Mr Gascoigne himself, after having resided in Russia from the year 1786, when he went there, for more than ten years, had returned to Scotland, that he could not have availed himself in Scotland of this decennial prescription which had run in Russia. They all agree that, under the sequestration, the credits, if he had returned, would have had a right to pursue him for the debts, and that it would not have been enough for him to have said, You cannot pursue me for those debts; for they would have said, Scotland is the place where those debts were contracted,—Scotland is the place where we are pursuing you; and you cannot protect yourself by the effect of a law of a foreign country, in which you have been residing for a time, to release you from the effect of the debts incurred in Scotland; but you are still answerable. All the Judges agree, that, if he had returned, the debts would have been recoverable against him. Lord Balgray, who first delivered his opinion, says, “If Mr Gascoigne had returned to this country, and brought his effects with him, then you could have laid hold upon those effects, or you might have laid hold of his person under the sequestration.” Lord Balmuto, who followed him, says, “If Mr Gascoigne had come to this country, then you would have applied the law of this country to him—you might have laid hold of his property or his person; but he never came to this country he, died in Russia; and therefore, I apprehend, the law of Russia must be applied.” My Lord President also states, “But they, the creditors, say, If Mr Gascoigne had returned to this country, he could not have pleaded the Russian prescription; and therefore his heir cannot do so either. I think the creditors are right in the first point, that if Mr Gascoigne had come to this country he would have been liable. The creditors would have been entitled to say, that the debts were contracted here; you are now domiciled here, and we will attach your person for payment of these debts. We don't inquire, and we have no right to inquire, where you get funds to pay those debts; You may find those funds where you please.” And, my Lords, that I apprehend is a correct view of the subject, as applied to Mr Gascoigne himself; not only as it follows from the opinions of those learned persons, but a case was cited which had occurred in England, and it is admitted,
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“It is impossible to say that a contract made in one country is to be governed by the laws of another. It might as well be contended, that if the state of Maryland had enacted that no debts due from its own subjects to the subjects of England should be paid, the plaintiff would have been bound by it. This is the case of a contract lawfully made by a subject in this country, which he resorts to a court of justice to enforce; and the only answer given is, that a law has been made in a foreign country to discharge these defendants from their debts, on condition of their having relinquished all their property to their creditors. But how is that an answer to a subject of this country, suing on a lawful contract made here? How can it be pretended
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that he is bound by a condition to which he has given no assent, either express or implied? It is true, that we so far give effort to foreign laws of bankruptcy, as that assignees of bankrupts deriving titles under foreign ordinances, are permitted to sue here debts due to the bankrupts' estates; but that is because the rights to personal property must be governed by the laws of that, country where the owner is domiciled.”—Then he goes on to mention the cases which had occurred upon that subject.—My Lords, Mr Justice Laurence says. The point rests solely on the question, Whether the law Maryland can take away the right of a subject of this country to sue upon a contract made here, and which is binding by our laws? This cannot be pretended; and therefore the plaintiffs are entitled to judgment.”
Your Lordships perceive the result of this judgment is, that the interlocutor, having decerned in the conclusions, of, the libel, one of which conclusions is, that these debts are null and extinguished, if tomorrow any property could be, discovered in Scotland which had belonged to Mr Gascoigne, those creditors are, by this interlocutor found to have no right whatever to pursue that property, because their debts are absolutely and extinguished. My Lords it is admitted, that if Mr Gascoigne had returned into Scotland,—nay more if any effects had come into Scotland, where they could have been attached, they would have been liable to be attached under the sequestration. It appears to me therefore, that even on the principles adored by the learned Judges themselves, the interlocutor cannot be supported to the extent to which it has been pronounced, that the debts are null and extinguished. It is, another question, to which I shall presently call your Lordships' attention, whether, though these debts are not extinguished by the Russian law and proclamation, under the circumstances Lady Hadinton, who is a Russian representative of this gentleman, can be sued in Scotland in respect of the Russian representation, in respect of effects received by her in Russia? That is a very important question, and one which, it appears to me, has not received all that consideration in the Court below to which it is en titled but, my Lords, having stated thus much to your Lordships, I trust I have shewn sufficiently, that it is impossible to support the interlocutor that these debts are extinguished; for, taking the language of Lord Kenyon, whether it was the common law, or any law they have themselves introduced, it is impossible that, by a person's removal to Russia, or any other country where a different law prevails than that in Scotland, he can discharge himself from those debts; but he must, if he returns to that country, be liable to be sued, leaving it open to him to avail himself of any defence which the law of Scotland enables him to set up against those demands. Therefore, my Lords, to the extent to which in is interlocutor has gone, I apprehend it is impossible to sustain it, for the reasons I have stated to your Lord-ships.
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But then, my Lords, comes that which in an extremely important and difficult question; supposing these debts, though not barred in Scotland, yet were not recoverable in Russia against Mr Charles Gascoigne, whether Lady Hadinton, having succeeded to his property by the law of Russia, that property being in Russia can be sued in Scotland, for those debts, which, if sued for in Russia, could not have been recovered against him? Now, my Lords, this point, as I have stated to your Lordships, appears to me not to have been sufficiently considered by, the Court of Session, they having come to the conclusion, that although those debts were not barred as against Mr Gascoigne himself if he had returned to Scotland, or brought effects there, yet they were null and extinguished as against his representatives. They have, of course, coming to that conclusion, at once pronounced in favour of Lady Hadinton in the action of declarator; and at once, without further consideration, assoilzied Lady Hadinton and her husband from the actions brought against her by some of the creditors; although in that action it was contended, that she had acquired property in Scotland, during the lifetime of her father, which was liable to her father's debts, declaring that those debts were null and extinguished, and at once extinguished and void in respect of recovery against her; and, of course, she was assoilzied from the actions by that declaration.
My Lords,—It appears to me that another question, submitted to the Russian lawyers, has not yet been answered by them so satisfactorily enable your Lordships at once to affirm this interlocutor, proceeding upon the ground of those opinions. I observe even the learned Judges themselves feel, that those opinions are not sufficiently precise upon the subject, and I am not at all surprised that they should feel so. I will shortly call your Lordships' attention to the case which was stated to these lawyers, and will read to your Lordships their opinion. One question certainly was, supposing the law of decennial prescription in Russia to apply to debts generally, whether the effect of a Scotch sequestration was not, to keep alive the debts proved under that sequestration, and therefore to prevent the effect of the law of Russia,—that depends very much upon the effect of a Scotch sequestration. The Scotch sequestration differs in this respect from the English commission of bankrupt: The effect of an English commission of bankrupt is, that by the assignment to the assignees, not only the personal property of the bankrupt at the time, but all his future personal property, passes to the assignees; so that the assignees under an English proceeding, without further proceedings, may recover, in their own names, any personal property subsequently acquired by the bankrupt. A Scotch sequestration has no such effect; it merely passes the property the person possessed at the time of the sequestration; and if he acquires any personal property, it is necessary, in order to give the trustees possession of it, to have a supplemental sequestration. But the effect of a Scotch sequestration, apprehend, is, that it prevents lime running against those debts: indeed, there is an express statute,
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My Lords,—The case which is stated for the opinion of Russian Counsel is rather short. It states the effect of this partnership by Sir Charles Gascoigne and Mr Garbett, and then it states, that “certain proceedings took place in Scotland, under the bankrupt laws of that country, against the Company, and against Sir Charles Gascoigne as a partner of the Company, for obtaining payment of the debts due by them. It is contested between the parties, whether those proceedings have the effect of interrupting or excluding prescription, which, by the law of Scotland, after a certain number of years, extinguishes or cuts off the claims of creditors for payment of debts on which no proceedings have been taken sufficient to bar such prescription; and it will be necessary therefore, that, in making your answer to the case, you alternately suppose, on the one hand, that the debts would be held as cut off in Scotland by prescription, were Sir Charles Gascoigne alive, and in that country; or, on the other, that the debts are still in Scotland subsisting debts, for which Sir Charles Gascoigne, if alive, would be liable; or his property, or those who succeed to him in it, now that he is dead, might be affected by the law of Scotland.” Then it goes on to state, that “the debts claimed in Scotland against the Company, and against Sir Charles Gascoigne, amounted originally to L.129,447; and dividends have at several times been paid to the amount of 11s.3d. in the pound upon those debts, leaving a large balance still due. Sir Charles Gascoigne, after having, till the year 1786, acted as manager for his creditors, left Scotland in that year and went to Russia. He was there naturalized. He died in Russia on 20th July 1806.”—That “Sir Charles Gascoigne's residence in “Russia was well known to all or many of his creditors in Scotland;
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It then states the will of Sir Charles Gascoigne, made in Russia and that “all his estate and effects, acquired since the bankruptcy took places in Scotland, lay in Russia, which was the place of his domicile at his death. Lady Hadinton accordingly entered into the administration of her father's effects, according to the forms observed in Russia. She became desirous, as her father had been, to obtain a discharge from the British creditors, of any claim which they might have upon her father's property, so acquired in Russia; and a correspondence and negociation took place between persons acting on her behalf and the trustee for the creditors. That correspondence is also hereunto annexed.”—“This negociation also proved ineffectual and an action has been commenced in the Court of Session in Scotland, on the part of Lady Hadinton, for having it found and declared, (according to a form of action known in Scotland), that Lady Hadinton is not accountable in Scotland, to all any of her father's creditors in Britain, for any estate or effects which may have been derived to her from her father's death in Russia, as being property situated there, and subject to the laws of that empire and generally, that the debts that had been contracted by him in Scotland of Britain before he left Scotland are entirely cut off and extinguished. It has in particular been maintained, that by the Russian law, if no demand, process, or action for civil debt, have been instituted in Russia during ten years from the date of the origin of the claim, or if any 1egal demand or action, though once instituted there within that period, has not been persisted in for a period of ten years, the right of action upon such debt is annulled.”
Then, my Lords, these are the questions. “ First, Without having any regard to the proceedings in Scotland or the foreign origin of the debts, be pleased to say, Whether, by the law of Russia, a person who take, under the will of a father, the estate or effects which belonged to him, does thereby become responsible in Russia for his debts? And if so, whether for his foreign debts is well as for those
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Then there was a third question. “Taking the supposition that the proceedings in bankruptcy in Scotland, if not overruled or counter-acted by the Russian law of prescription, have kept the debt alive there, so that it might be demanded from the original debtor, if still in life and in Scotland, or from his heir, being in that country, and having effects derived from the will of the original debtor, be pleased to say, Whether would the debt be demandable also in Russia either from the original debtor, if alive, or from his heir in possession of his estate and effects? or would any Russian law of prescription be held to discharge the person of the debtor, or his effects, from responsibility for the debt?” And then, “Would the correspondence already referred to, have any effect in establishing in the Russian tribunals responsibility not otherwise incurred?
This case was submitted to two gentlemen, one of the name of Hartmann, and another of the name of Brockhausen; and Mr Hartmann states the law of Russia to be as I am now about to read to your Lordships. “As soon as the heir takes possession of the property of the deceased, he becomes responsible for the debts and other obligations of the deceased, not only to the whole amount of what he has inherited, but as far as his own personal means will extend; and that responsibility attaches to debts both in and out of Russia.”—“There is no difference between such a responsibility and that of a first debtor, either by its duration or otherwise.” Then as to the prescription, he say that ‘the 4th section of the Imperial Manifest of the 28th June
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Mr Brockhausen agrees, as to the effect of Russian law, with the opinion given by Mr Hartmann. Then he says, “Any debt not judicially
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He says, in, answer to the fourth question, “The debtor may produce the act of prescription the day following the last day of the expiration of the tenth year.” Then he says, “According to the Manifest of 1787 no, reclamation would be any longer admitted, either against the debtor, if in life or against his heirs representing him after his death. It would be equally the same if there was a prescription of a foreign tribunal.” Then he says, with respect to the correspondence, those negociations which had taken place for the purpose of relieving Mr Gascoigne from the effect of those debts,—“The correspondence would necessarily revive motives to enter upon a new process, if ten years have not elapsed from its date. If the debts were recognized as valid by a foreign tribunal, and that there was a formal judgments against the debtor of a date within the period of ten years, then a judicial execution against the property of the debtor, or of his heirs would be admitted in its full vigour; and there exists no law against it. The correspondence, written or signed by the hand of the debtor or of his heirs, may serve as a motive for establishing in Russia a new 4 process in due form, according to the ordinance of 1723, 5th November but the correspondence of a third person cannot he sustained as proof, unless it is accompanied by full power; so that to enter upon such a process, it would be necessary for the adverse party to be upon the spot.— N.B. The progress of such process is very slow, and the expense considerable.”
My Lords,—Those opinions were sent back by a gentleman, of the name of Cramer, whose letter is added to the Appendix, in which he apologizes for the delay. It appears that the legal gentlemen in Russia are not more expeditious in giving opinions than the legal gentleman in this country. The opinions were laid before the gentlemen in Russia in the month of April, and they got no answer till the
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My Lords,—I must confess that, attending to those opinions and to the judgment which has been pronounced below, i do not feel myself in a situation to offer to your Lordships any decided opinion upon the effect of this law of Russia, or the answers given by these gentlemen; and I should therefore propose to your Lordships, that this part of the cause should be remitted to the Court of Scotland, to obtain, if possible, a more decided opinion on the effect of a Scotch sequestration on property sued for in the Courts of Russia. It appears to me, a case should be framed, stating positively the effect of a Scotch sequestration in Scotland, as to interrupting prescription in Scotland, and the effect of that proceeding in the nature of a judicial proceeding in respect of preserving those debts; and upon such a case one cannot but entertain a hope, that a more satisfactory opinion may be obtained from the Russian lawyers upon that subject. So also upon the effect of the correspondence. Some of the learned Judges conceive, that that correspondence ought not to be received, because it was in the nature of an offer of compromise, which in the law of Scotland is wholly disregarded; but that does not appear to be the effect of the opinion of the Russian lawyers. They seem to be of opinion, that in Russia the effect of that correspondence would be to interrupt prescription, which would otherwise run against debts; and with respect to the actions brought against creditors, it appears to me, that the Court below, deciding upon that point, in which I wholly differ from them, namely, that those debts are wholly extinguished in Scotland, have contented themselves, on coming to that conclusion, in dismissing the actions against Lady Hadinton. In those actions a very different question arises, not only how far she, as a Russian representative, is subject to those debts, but whether, in the lifetime of her father, acquiring property in Scotland in trust for her father, that property
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My Lords,—Unfortunately, as your Lordships must have collected from what I have stated, the questions in this case are questions, if they shall arise on the Russian law, of great nicely and great difficulty. My Lords, I cannot help throwing out this, that I think the question as between the creditors and Lady Hadinton,—she deriving her title to this property as a Russian representative,—must be decided as between the creditors and her, as it would be decided between them and a Russian, if a Russian had arrived in Scotland. I throw out that as the present impression on my mind, not as a conclusive opinion, but as one deserving great consideration. If, on the answer to those questions, it shall appear that, by the law of Russia, those debts could not be recovered there, because a person in Russia, acquiring right by Russian law, would in Russia be exempted from the payment of those debts, it would be difficult to say how, if this Russian came to Scotland, he would be affected in Scotland, he being relieved by the law of Russia from those debts; and if that be the law in the case of a Russian, it is difficult to say how it can be different, if it is in the case of a Scotch lady. I have thrown this out, (thinking that probably what I have stated to your Lordships may be conveyed to the learned Judges in the Courts of Scotland), as a most important point to be considered; but, feeling as I do, and, if your Lordships shall concur with me in that view, that part of this interlocutor cannot stand, namely, that part of the interlocutor which has found these debts null and extinguished; it appearing to me, that the Court below has proceeded mainly on that ground, not only in the action of declarator, but in those actions which the creditors have brought against her, and which are conjoined in this process, I shall propose that your Lordships shall find, first, that the debts due to the persons named in the summons of
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My Lords,—I ought to apologize to your Lordships for the time I have taken in stating to your Lordships the nature of this case, and the observations which have occurred to me upon it; but really, after paying great attention to this case, I could not, consistently with justice to the parties, with a view to the findings and judgment I now move your Lordships to pronounce, refrain from making these observations, thinking that probably they may tend to assist in the further consideration of this case in the Court of Scotland. The point is undoubtedly one of great difficulty and great novelty for I have not been able to find any case bearing precisely upon this question; and therefore it was, that I have been induced thus long to detain your Lordships.
Respondent's Authorities.—Huber de Conf. Leg.; 1. Voet, 8. 30. and 44. 3. 12.; Randall, July 12. 1768, (4520.); Kerr, February 20. 1771, (4522); Campbell, November 23. 1813; (F. C); Delvalle, March 9. 1786, (4525.); 1. Bell, 565.
Solicitors: Spottiswoode and Robertson— J. Ritchardson,—Solicitors.
(Ap. Ca. No. 66 .)