Scottish Court of Session Decisions

By section 37 of the Statute 12 George III. cap. 72, it is enacted “that no bill of exchange, or inland bill, or promissory-note, executed after the 15th day of May 1772, shall be of force or effectual to produce any diligence or action in that part of Great Britain called Scotland unless such diligence shall be raised and executed, or action commenced thereon, within the space of six years from and after the terms at which the sums in the said bills or notes became exigible.”

On 15th May 1877 William Thomas Ormiston, John Ord, and Samuel Swan, in return for a loan of £1000, granted a promissory-note for that amount in favour of Miss Marion Milne, whereby they bound themselves one day after date, conjunctly and severally, to pay to her within the office of the Royal Bank of Scotland in Jedburgh the said sum of £1000. The interest on the said note was to be at the rate of 5 per centum per annum.

William Thomas Ormiston died on 24th July 1878, Samuel Swan on 30th January 1880, and John Ord on 30th September 1880. They all left trust-settlements.

Until 15th May 1880 the interest on the sum in the note was duly paid, one-half by John Ord, and the other half by William Thomas Ormiston, and after his death by his representatives.

In 1883 Miss Milne brought an action in the Sheriff Court of Roxburghshire against the trustees and executors of the three granters of the promissory-note, in which she prayed the Court “to grant decree against the above-named defenders as trustees foresaid, ordaining them to pay to the pursuer the sum of £1000 sterling, with interest thereon at the rate of 5 per cent. per annum from the 15th day of May 1880 until payment, with expenses.” In the condescendence she averred—“(5) The said promissory-note is still unpaid, and is due to the pursuer; and as the said trustees of the said William Thomas Ormiston, Samuel Swan, and John Ord now represent the granters thereof, the several estates entrusted to the management of the said respective trustees are thus jointly and severally liable in payment of the said sum of £1000 sterling, with interest thereon at the rate of 5 per centum per annum from the 15th day of May 1880 (since which date no interest has been paid) until payment thereof.”

On 26th April 1883 the Sheriff-Substitute ( Russell) pronounced the following interlocutor—“In respect of no appearance for the defenders, holds them as confessed, and decerns against them in terms of the prayer of the petition, with £7, 1s. 8d. of expenses.” Extract decree followed thereon, in which the Sheriff-Substitute in absence decerned and ordained the defenders as trustees and executors foresaid to make payment to the said Miss Marion Milne, pursuer, of £1000 sterling, with interest thereon at the rate of 5 per centum per annum from the 15th day of May 1880 till payment, with £7, 1s. 8d. of expenses of process as taxed, and 4s., being dues of extracting and recording this decree.”

On 5th September 1890 Miss Milne died, leaving a trust-settlement.

In 1892 Mr Ormiston's trustees and Mr Ord's trustees each paid to Miss Milne' trustees one-third of the principal sum of £1000,

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with interest thereon at 5 per cent. from 15th May 1880 to the date of payment, and expenses of process and dues of extract, as contained in the said promissory-note, and also the decree in absence of 26th April 1883, and receipts were granted therefor, reserving all further claims and answers.

On 29th June 1892 Miss Milne's trustees raised an action against Mr Ormiston's trustees for the remaining third of the principal sum of the promissory-note, with interest and expenses, in which action they prayed the Court to ordain the defenders, as trustees and executors foresaid, “to make payment to the pursuers of the sum of £537, 16s. 3d., with the interest thereof from the day of citation hereto until payment.” In their condescendence the pursuers averred—“(Cond. 5) … The late Samuel Swan left no effects. The pursuers have applied to the agent in Mr Swan's executry, but have been unable to recover any part of the debt due to them under the promissory-note. (Cond. 6) One-third of the principal sum due under the promissory-note, with interest and expenses, is still resting-owing to the pursuers, and now amounts to the sum of £537, 16s. 3d. as sued for. In virtue of the above-mentioned action (the Sheriff Court action of 1883) the promissory-note still exists in force as a document of debt, the liabilities of the parties thereto are joint and several, and the defenders are accordingly restingowing the amount sued for. The defenders, however, do not admit liability for this sum, and the present action has been rendered necessary in order to enforce the rights of the pursuers under the said note.”

The pursuers pleaded—“(1) The sum sued for being resting-owing to the pursuers by the defenders, they are entitled to decree therefor against the defenders, as concluded for, with expenses. (2) The sexennial prescription or limitation of bills and promissory-notes having been barred or excluded by the action raised on the promissory-note in question, the said promissory-note exists in force as a document of debt, and the pursuers are entitled to recover from the defenders the balance of the said sum therein contained, with the interest and expenses, as concluded for.”

Mr Ormiston's trustees lodged defences in which they admitted the loan, but averred that the only debtors now bound for the sum sued for were Samuel Swan's executors.

They pleaded, inter alia—“(3) The said promissory-note has undergone prescription, and cannot now be founded on. (4) The said promissory-note was superseded by the decree taken on 20th April 1883, and said decree is now the measure of the pursuers' rights. (5) The defenders not being indebted to the pursuers in any sum are entitled to absolvitor with expenses. (6) The grounds of debt not being competently alleged the action falls to be dismissed.”

On 25th November 1892 the Lord Ordinary ( Stormonth Darling) allowed the pursuers to amend their summons by inserting after the sum sued for, £537, 16s. 3d., the following words—“sterling, being the balance of principal and interest due on a promissory-note dated 15th May 1877, granted to the said Miss Marion Milne by the said William Thomas Ormiston, the late John Ord, and the late Samuel Swan, whereby they bound themselves, one day after date, conjunctly and severally, to pay to the said Miss Milne, within the office of the Royal Bank of Scotland in Jedburgh the sum of £1000.”

On 9th December the Lord Ordinary pronounced the following interlocutor:—Repels the defences, and decerns against the defenders conform to the conclusions of the summons: Finds the pursuers entitled to expenses, &c.

“ Note.—The late Mr Ormiston of Glenburnhall, whose trustees and executors are the defenders in this case, became liable, along with two other gentlemen, conjunctly and severally, on a promissory-note for £1000, granted in favour of the late Miss Milne of Otterburn on 15th May 1877. Her trustees now sue for the balance remaining due on the bill; and the defence is twofold: (1) That the summons is not competently framed, in respect that the note is not sued on; and (2) that the note is proscribed.

With respect to the first defence, I have had no hesitation in allowing the pursuers to amend the summons by inserting a reference to the note. It seems to me that under the 29th section of the Court of Session Act of 1868 I was bound to allow this amendment, because it is clear from the condescendence and pleas-in-law that the action is laid on the bill, and the amendment was necessary for the purpose of determining in this action the real question in controversy between the parties.

The second defence raises a much more difficult question, viz., this, whether the sexennial prescription was effectually interrupted by an action raised by the late Miss Milne in the Sheriff-Court of Roxburghshire against the representatives of all the co-obligants. The action was raised, and decree in absence was taken, in 1883, before the six years had expired; but the conclusions of the petition were so framed that nothing more could have been recovered from each of the three sets of trustees than one-third of the debt. In other words the petition did not conclude that they should make payment ‘conjunctly and severally.’ It is plain enough that this was by omission and not of design, for the fifth article of the condescendence distinctly averred that the defenders, as trustees of the original granters, were jointly and severally liable in payment of the amount in the bill with interest.

The decree so obtained seems never to have been put in force; but in the course of the present year the defenders in this action, and the trustees of the second co-obligant, each paid one-third of the principal sum with interest and expenses, on receipts which bore that payment had been made and accepted under reservation of the pursuer's claim against all the parties to the note for the balance of the principal sum, interest, and expenses, and of the answers of all the said parties to such claim. It is clear that nothing turns on the payment

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thus made as of the nature of a transaction. The true question is, whether, as the pursuers allege, the Sheriff-Court action kept the bill alive to its full extent and effect; or whether, as the defenders allege, the bill is prescribed, and the decree in the action is now the measure of the pursuer's rights.

I am of opinion that the action was effectual to interrupt prescription, and that the bill remains in force.

It is settled law that it is enough to preserve a bill from prescription that there has been diligence done, or action raised, within the six years, though that particular action or diligence may not have been proceeded with; and further, that diligence or action against one co-obligant preserves recourse against the whole. Accordingly it was found in the case of Paxton v. Forster, 4 D. 1515, that where decree in absence had been taken within the sexennium against two of the representatives of the granter of a bill, andno payment had been made, the plea of prescription was not good as a defence against an action raised after the six years against four of his heirs-portioners. It is true that the Court in holding that the plea of prescription was elided by the earlier action, added the words ‘when taken in connection with the proceedings at the meeting after the funeral.’ But it appears that the only significance of the addition was, that by these proceedings the heritable and moveable estates of the deceased were massed together, so as to make his heirs-portioners liable in a debt which would otherwise have fallen primarily on his executor.

It would thus appear that a defender cannot successfully plead that an action was ineffectual to interrupt prescription merely because it was one in which he personally could not have been found liable. It seems to me a fortiori that he cannot do so with reference to an action in which he might have been and was found liable, but only to a limited extent. Of course if the limitation of his liability had been established in foro contentioso, a plea of res judicata would have arisen. But that is not the case here. It is enough, in my view, to interrupt prescription that an action has been raised on the bill within the sexennium, before a competent Court, against all or some of the proper parties, even though the action has not concluded for the full measure of liability against each.

The defenders do not allege that the balance sued for has been paid, and the result is that I must hold them liable.”

The defenders reclaimed, and argued—The present action was laid on the bill only. Such an action must be brought within the six years. No doubt, in this case, on the eve of the expiry of the sexennium an action had been brought. But that action only concluded as against such of the defenders to it for one-third of the amount of the debt. They had paid their third, and therefore the debt as regards them was extinguished. After decree was got in that action there existed a judgment debt which came in place of the bill. That judgment debt had been paid by them. The pursuers were not entitled to ignore the terms of the decree in the former action and raise another action. The bill was prescribed and the debt could only be proved by writ or oath— Denovan v. Cairns, February 1, 1845, 7 D. 378. An abandoned action will not interrupt prescription— Gobbi v. Lazzaroni, March 19, 1859, 21 D. 201. The case of Paxton v. Forster did not apply, as in that case the heirs-portioners by their actings had incurred liability to pay the debt.

Argued for pursuers—The defender said the bill had been prescribed, and that the debt could only be proved by writ or oath. Even if the bill was prescribed, the debt was admitted by the defenders on record. But the bill had not been prescribed. It had been kept alive by the action raised in 1883. A judicial demand founding on the bill, made within the six years, excluded the application of the statute to the bill, and in all future time prescription could not be pleaded by anyone liable under the bill. In short, a judicial allegation of indebtedness and demand for the debt takes the case out of the Act altogether. Prescription was elided by raising an action, by claiming in a multiplepoinding or other process of competition, by production of the bill in a process of ranking and sale, or getting decree against one of the acceptors—Bell's Prin., sec. 598; Bell's Comm., i. 420; Thomson on Bills of Exchange (2d ed.) 466; Douglas v. Heron & Company, F.C., November 26, 1784; Maclachan v. Thomson, June 16, 1831, 9 S. 753; National Bank v. Hope, December 5, 1837, 16 S. 177; Paxton v. Forster, July 13, 1842, 4 D. 1515; Rays v. Campbell, June 14, 1850, 12 D. 1028.

At advising—