Scottish Court of Session Decisions

In the year 1806, the suspender Mackie, having purchased certain heritable subjects, borrowed £70 of the charger Watson, who was then his confidential agent, to enable him to pay the price. In security of this sum Mackie granted a bond over part of the property, containing a power of sale and other usual clauses. In 1807 he again sold his heritable property, including that covered by the bond; the transaction being managed by Watson, who concurred in the sale and became a party to the disposition, conveying to the purchaser all right and interest which he had in the subjects, “as an heritable creditor thereon or otherwise.” Of the sum paid by the purchaser he received £70. The bond remained uncancelled in the hands of Watson, who continued for a number of years to act as Mackie's agent, no interest being paid nor intimation made of an intention to call up the principal.

About 29 years after the term of payment, Mackie having brought an action of count and reckoning against Watson, the latter charged him for payment of the sum in the bond. Mackie presented a bill of suspension, which was passed and a record made up. In the reasons of suspension Mackie stated the circumstances under which the bond had been granted, the subsequent sale of the property and the after proceedings, alleging that the £70 above-mentioned was applied in liquidation of the debt of the same amount secured by the bond.

Watson, in his answers, admitted his having managed and concurred in the sale of 1807, and also that out of the price then paid by the purchaser he had received payment of a sum equal to what was contained in the bond; but he averred that Mackie was at that time owing him, besides the sum in the bond, about £70 or £80, advanced in small sums, which were acknowledged in separate letters or slips of paper, and that the £70 then received was applied by him in payment of those advances, the several acknowledgments therefor being delivered up and cancelled, while the bond remained undischarged and unsatisfied. He also alleged that Mackie's inability to pay, and his own indulgence, were the true reasons why the bond was not enforced for so long a time; and this allegation was not met by a denial.

In support of his suspension, Mackie pleaded—That, in the whole circumstances of the case, the bond in question must be presumed to have been paid; that payment was moreover proved by Watson's judicial admission, the rearing up of another debt being an extrinsic quality therein, and of no effect unless established aliunde. ^*

Watson, on the other hand, pleaded—That the bond charged on being a liquid and subsisting ground of debt, neither discharged nor prescribed, and the averments of Mackie being unsupported by any written evidence, the letters should be found orderly proceeded; that the allegation he had made of a separate debt, and of the £70 having been applied in payment thereof, could not be separated from the other part of his admission; ² and, assuming the existence of this loose debt, he had an evident reason and interest for acting as he had done, that he might put his debtor in funds, so as to enable him to operate payment of the debt worst secured.

The Lord Ordinary “suspended the letters and charge simpliciter,” finding expenses due, and added the subjoined note. ^*

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¹ Reid v. Binning, Jan. 1, 1670 (13202); Cameron v. Dunskine, Feb. 1730 (13207).

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² Erskine, IV. 2, 12.

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^* “Though the Lord Ordinary thinks it cannot be maintained absolutely that payment (or satisfaction) of a regular bond can in no case be instructed, except by writ or oath of the creditor, he is aware that it would be difficult indeed to specify any circumstances which, as the law now stands, would be thought sufficient to warrant a presumption of such payment; and nothing can illustrate this difficulty better than the recent case of Graham against Veitch, 18th December, 1823 (2 Shaw, 594).

“Though the circumstances in this case, therefore, are extremely strong, he cannot say that he would consider them as justifying the interlocutor, if be had viewed them as grounds of presumption only. What he goes on is the judicial admissions of the charger, which he conceives to be equivalent to his proper writ or oath, and which, when discharged of the extrinsic qualities annexed to them, he thinks sufficiently establish that the debt now charged for was long ago paid, and is not resting owing.

“The bond charged on was granted so long ago as 1806; and it is a proper heritable bond over certain properties belonging to the suspender, containing a power of sale and other usual clauses. Now the judicial admissions of the charger as to this bond are these: 1st, That he, being law-agent for the suspender at the time, did, in the year after, viz. in 1807, negotiate or concur in a sale of the whole of the said properties, and did sign the disposition to the purchaser, conveying to the said purchaser all right and interest which he had in the subjects, as heritable creditor thereon or otherwise. 2d, That out of the price then paid by the purchaser, he did receive payment of a sum about equal to that contained in the bond and disposition in security, and certainly not of less amount (see 4th article of statements for charger); and, 3d, That after this transaction in 1807, no attempt was ever made to recover payment of the bond, or any mention made of it till 1835, when, in answer to an action of count and reckoning brought against him by the suspender, the present claim was intimated, and the charge under suspension soon after given.

“The quality annexed to the second and most important admission is, that at the time of the sale the suspender was indebted to him for certain other advances, amounting to between £70 and £80, for which he held no other vouchers but loose notes and acknowledgments; and that the part of the price received by him was applied in payment of those advances, and not to the sum in the bond; and the notes and acknowledgments given up to the suspender accordingly. The whole question is, whether this is an intrinsic or an extrinsic quality? There are conflicting, or at least diverse decisions on the subject: But the Lord Ordinary is humbly of opinion that, where there is no other evidence of the existence of another and separate debt than the mere allegation of the creditor, which, whether it occurred in an oath of reference or as qualifying a written admission of payment, could never really prove such separate debt, the quality ought to be held as extrinsic. The present case, it may be observed, is far stronger than some of those in which decisions to this effect have been given; particularly those of Reid, 6th January, 1670 (Mor 13202), and Cameron, February, 1730 (Mor 13207), which were both cases in which mere indefinite payments, which only partially extinguished the debt sued for, were held applicable to that debt, in spite of statements in the oath, that they had truly been applied to other debts of which there was no other evidence. The present case, however, is a fortiori, in respect of those two important specialties: 1st, That the payment admitted was confessedly just about equal to the whole debt now claimed, and at all events quite sufficient to extinguish it; and, 2 d, That it was received out of the price of the very property destined and conveyed in security of it, and by any other application of which the whole of that security must have been lost.

“If these views are correct, the existence of the uncancelled bond in the hands of the creditor is nothing more than what must occur in most such cases. But it is of less than usual importance in this case, when it is recollected that the charger was the law-agent of the suspender—a person unacquainted with business, and likely enough to hold documents for behoof of his employer, after his own interest in them as an individual was discharged.”

Watson reclaimed.