Scottish Court of Session Decisions

In this action the trustees of the late William Mitchell, writer, Cupar-Fife, sued David Mitchell, contractor, residing at Kirkside House, St Cyrus, near Montrose, for payment of £150, “being the amount advanced by the late William Mitchell to or for behoof of the said David Mitchell, and which advance the said David Mitchell became bound to repay, which sum is contained in a bill, dated 25th June 1860, drawn by the said David Mitchell upon, and accepted by Walter Dingwall, then residing at Drumforber, near Laurencekirk, payable three months after date, which bill was endorsed by the defender to the Aberdeen Town and County Bank, and by the said bank to the said deceased William Mitchell.” The statements of the pursuers forming the ground of their action were denied by the defender, who pleaded that in retiring the bill Mr William Mitchell did not act for his behoof, and that no engagement was ever entered into by him to repay the money or any part thereof. The question of fact thus raised depended chiefly on a correspondence which took place betwixt the parties and certain admissions made by them, on which they renounced probation. Lord Kinloch assoilzied the defender, and in a note gave the following explanation of the circumstances of the case, and the grounds of his judgment:—

“Walter Dingwall, the acceptor, had, prior to September 1860, fallen into a condition of pecuniary embarrassment. It was agitated amongst the members of his family, and also amongst some of his creditors to apply for a sequestration of his estates under the Bankrupt Statutes. This was thought the more desirable because Walter Dingwall had granted a conveyance or renunciation of his farm of Drumforber, which it was thought a sequestration might afford the means of setting aside, and so a fund be created for equal distribution among his creditors, and the way cleared for his discharge. It was in this condition of things that the defender was brought into contact with the deceased William Mitchell. And it is of great importance to notice what is admitted on both sides in regard to Mr Mitchell's personal relation to the respective parties. The joint minute of admission bears, ‘That the late William Mitchell, writer, Cupar, was the friend and agent of Walter Dingwall and William Dingwall, and that it was in consequence of this connection that he opened communications with the defender David Mitchell, with whom he had no previous acquaintance.’ In this capacity of friend and agent of Walter Dingwall and of William Dingwall, who was the brother of Walter, the late Mr Mitchell wrote to the defender in the beginning of September 1860, mentioning the state of Walter Dingwall's affairs, and what his relatives contemplated doing. The correspondence continued down to 26th September, two days before the bill in question

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fell due, when an arrangement was made, to be immediately referred to. What was mainly spoken of was, that some one creditor should take out a sequestration against Walter Dingwall, an idea which the correspondence shows was struck out by the deceased Mr Mitchell, and then communicated by him to the defender. The defender favoured his proposal, indeed urged it earnestly, but the question which then arose was, who should step forward to do this? It was proposed that the defender should be the person, and by means of the bill in question, now approaching maturity, or of one or other of the other documents of debt which he held against Walter Dingwall. The defender stated various reasons why he could not go personally forward. Another proposition was, that William Dingwall, the brother of Walter, should take up the bill in question, and so having made himself his brother's creditor, sue out sequestration. Some difficulties were also stated about this. The matter was bandied to and fro in correspondence down to 26th September, without apparently any definite arrangement being come to. In conducting this correspondence, as in commencing it, the deceased Mr Mitchell assumes no other character than that of friend and agent of the Dingwalls. He in no way assumes the character of agent of the defender; on the contrary, in the course of his correspondence he more than once advises the defender to consult his own agent Mr Robert Burness, and to employ him to do what was necessary. There is no trace in this correspondence, so far as the Lord Ordinary can perceive, of Mr Mitchell offering to interpose on behalf of the defender, and to advance him money to take up his bill. The defender apparently neither needed nor asked any interposition by Mr Mitchell on his behalf. Anything proposed to be done by him was, so far as the Lord Ordinary can perceive, to be done directly and personally, and through his own agent so far as he might require an agent's services.” After narrating some of the correspondence, the Lord Ordinary proceeded—“The inference which the Lord Ordinary draws is, that when advancing his money to take up his bill, the deceased Mr Mitchell must be held to have been acting on behalf of the Messrs Dingwall, whose friend and agent he admittedly was, and not on behalf of the defender. Mr Mitchell apparently had no object or interest to interpose on behalf of the defender. He was neither his friend nor his agent. An interposition on the defender's behalf by Mr Mitchell was neither offered nor sought. Such interposition was a very natural thing to happen on behalf of the Dingwalls, of whom William Dingwall is not said to have been otherwise than solvent. And the Lord Ordinary considers that the deduction to be drawn from the correspondence is that both Mr Mitchell and the defender understood that the interposition was on behalf of Mr William Dingwall, and proceeded on the footing of its being so. There is other evidence confirmatory of this conclusion. One important fact is, that in taking a protest on the bill, Mr Mitchell only took it against the acceptor Walter Dingwall, and not against the defender, the indorser. It is said that this was done to avoid exposure in the Black List. It is at least as likely an explanation that it was done because Mr Mitchell intended no other claim than against the acceptor. It is another material fact that although the sequestration was issued in the immediately ensuing month of October, and the bill had then served its immediate purpose, Mr Mitchell made no claim on the defender for payment or reimbursement prior to his death on 20th July 1861. Neither did he make any entry in his books as of an advance to the defender. The defender's name does not, as far as the Lord Ordinary perceives, appear in Mr Mitchell's books at all. Any entries connected with the transaction in the books of the firm of Drummond & Mitchell (the only books in which such entries occur), whether these are cash or business entries, apply to ‘Mr W. Dingwall,’ meaning, as the Lord Ordinary is disposed to infer, Walter Dingwall, the bankrupt. It is true that in his affidavit in Dingwall's sequestration, Mr Mitchell sets forth both acceptor and indorser as securities to him on the bill. But this circumstance, whilst no legal evidence in Mr Mitchell's favour, is probably accounted for on the supposition that it was keeping up the form of an onerous third party interposing. Subsequently to Mr Mitchell's death, his representatives for a time took no steps to enforce payment from the defender. At first the bill was given up by them in the inventory as only affording a claim against Walter Dingwall, and worth merely a composition of 5s. per pound. This is now said to have been a mistake committed in ignorance. The pursuer, Mr William Mitchell, S. S. C., says in a letter of 15th April 1862—‘I was under the impression that Mr D. Mitchell had endorsed without recourse, but this is not so.’ The present action was raised on 22d January 1863.”

The pursuers reclaimed, and to-day the Court altered Lord Kinloch's interlocutor, and decerned against the defender, with expenses.