Scottish Court of Session Decisions

Subject_1 QUALIFIED OATH.
Subject_2 SECT. VI.

Compensation Extrinsic.

Adam Rankine
v.
Thomas Adair

Date: 29 June 1799
Case No. No 57.

Again found, that when resting owing is referred to the oath of the debtor in a prescribed bill, compensation is extrinsic.

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In 1796; Adam Rankine brought an action against Thomas Adair, writer to the signet, for payment of a bill, for L. 100 payable one day after date, which the defender had granted to William Morrison in 1788, and to which the pursuer had right by indorsation.

As the bill was prescribed, resting owing was referred to the oath of the defender.

His deposition bore, that the debt in the bill was originally constituted by a bill to the father of William Morrison; that old Morrison and his wife possessed a small farm belonging to the defender, on a lease to the longest liver of them, containing an obligation to support the houses and fences; that upon old Morrison's death, his widow acquired right to the bill; and that at the joint desire of her and of her son William Morrison, it was exchanged for the bill now claimed for, on the defender's receiving a positive assurance from Morrison, that the stipulations of the lease should be punctually performed; that the arrears of rent now amounted to L. 21*, and the defender supposed it would require at least L. 30 to put the subjects in the state of repair, required by the lease; that these claims had been allowed to lie over, on assurances from Morrison that they should be deducted from the bill when it came to be settled; that trusting to the bill for his payment, the defender had done some business, for Morrison, for which L. 13: 19: 112 were due to him, and that with these deductions he was willing to pay the bill.

* The Rent was L. 3 a-year.

In his pleadings, the defender stated, that the pursuer had not acquired right to the bill till it was prescribed, and that it had been transferred to him without value.

The Lord Ordinary found the defender entitled to plead compensation on the articles above mentioned; but as the sum required for repairing the houses and fences was not sufficiently ascertained, remitted to farmers to report on the subject.

In a reclaiming petition, the pursuer, besides an argument on the supposition of his being an onerous indorsee before the six years had elapsed, which did not weigh with the Court,

Pleaded; Compensation is always an extrinsic quality in an oath upon reference as to resting owing, because in adding that quality, the defender does not give a direct answer to the question put to him, which relates solely to the particular debt then in dispute. It is therefore quite different from the quality of payment, The counter claims which the defender may suppose himself to have against the pursuer, may not be inconsistent with an affirmative answer to the question put to the defender; and they are not in view at the reference, which implies no intention of allowing the defender to establish them by his own oath; Erskine, b. 4. tit. 2. § 11.; 11th February 1761, Mitchell against Macilnay, No 55. p. 13241.

The justice of the defender's claims is disputed in the present case; yet if they are to be at all regarded, the oath must be conclusive even as to their amount, which would be unreasonable.

Answered; When a reference is necessary only to establish the constitution of a debt not prescribed, the quality of compensation on a claim afterwards emerging, is indeed extrinsic, and the defender must prove his counter claim aliunde. But when, as here, it is incumbent on the pursuer to prove the present subsistence, as well as the original constitution of the debt, the quality of compensation being, like payment, a direct negative to the question put to the pefender, must be considered as intrinsic; 14th January 1737, Moffat against Moffat, No 22. p. 13214.; 6th July 1711, Clark against Dallas, No 21. p. 13213.; Erskine, b. 4. tit. 2. § 11.

Besides, the defender's right to deduction for rent and repairs is, in terms of the oath, pars contractus at the granting of the bill, an inherent condition even in the constitution of the debt, and to be considered in a different light from claims arising at a subsequent period; 5th June 1711, Forbes against Debtors of Craigy, No 20. p. 13212.; 8th February 1707, Maitland against Baillies, No 19. p. 13212.

Upon advising a petition, with answers, the Lords “found the claim of compensation is an extrinsic quality in the defender's oath, and in so far altered the interlocutor of the Lord Ordinary reclaimed against, and remitted to the Lord Ordinary to proceed accordingly.”

A reclaiming petition was (12th November) refused without answers.

The Lord Ordinary (20th December) found the defender liable for the bill libelled on, reserving to him to establish his claim of compensation by a separate action.

And a petition, craving a proof of the counter claims hoc statu, was (31st January 1800) refused without answers.

Lord Ordinary, Craig. Act. Jeffrey. Alt. Hay, Gillies Clerk, Sinclair. Fac. Col. No 136. p. 308.