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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Shepherd and Co. v. Bartholomew and Co [1867] ScotLR 3_170_1 (23 January 1867)
URL: http://www.bailii.org/scot/cases/ScotCS/1867/03SLR0170_1.html
Cite as: [1867] SLR 3_170_1, [1867] ScotLR 3_170_1

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SCOTTISH_SLR_Court_of_Session

Page: 170↓

Court of Session Inner House First Division.

Wednesday, Jan. 23 1867.

Lord President Lord Curriehill Lord Deas

3 SLR 170_1

Shepherd and Co.

v.

Bartholomew and Co.

Subject_1Proof
Subject_2Bill
Subject_3Writ or Oath
Subject_4Pro ut de jure.
Facts:

Circumstances which, being disclosed by the pursuers on record, held sufficient to entitle the defenders to a proof pro ut de jure, that bills used for had been superseded and extinguished.

Headnote:

The question raised in this case was whether averments by the defenders, that certain bills accepted by them and now sued for by the pursuers, had been superseded and extinguished by other bills, subsequently accepted by them, were proveable pro ut jure, or only by writ or oath of the pursuers.

The pursuers are merchants in Manchester, and in December 1864 they sold to Mr R. O. Cogan, cotton to the extent of £18,362, 10s. 9d. Of this

Page: 171↓

sum there was paid in cash at the time £4250, leaving a balance of £14,112, 10s. 9d. Mr Cogan wan a partner of the two Glasgow houses of John Bartholomew & Co. and John and Robert Cogan, and wan in the habit of making purchases of cotton for both; bills for the price being drawn upon the two firms in certain proportions. Accordingly, bills were drawn for the said sum of £14,112, 10s. 9d., to the extent of £8000 odds on Bartholomew& Co., and £5000 odds on Cogans. These bills were all accepted, and fell due in March and April 1865, but were not then retired. After some correspondence the pursuers drew fresh bills for the price of the cotton, the proportions this time being different—viz., Bartholomew & Co. accepted one bill for £4173, 14s. 11d., and Cogans several bills, amounting together to £9993, 9s. 6d. The old bills were, however, retained by the pursuers on the footing, as they said, of giving them an additional security for the payment of the original debt. The defenders, on the other hand, maintained that the old bills were cancelled and superseded by the new ones, and that the uniform practice betwixt the parties wan not to give up the old or superseded bills “till the account or transactions were finally closed,” there being the utmost confidence betwixt them.

In April 1865 the Bartholomews and the Cogans both stopped payments. The former nettled with their creditors for a composition of 13s. in the pound, and the latter for one of 6s. 8d. The pursuers have received payment of these dividends, and they now sue for payment of two of the old bills accepted by the defenders, whose averments, the plead, can only be proved by writ or oath.

The Lord Ordinary (Jerviswoode) held that the parties were entitled to a proof pro ut de jure of their respective averments, and he a pointed the proof to take place before himself. He added the following

“ Note.—The Lord Ordinary has considered the record in this case and the debate which took place before him, in relation mainly to the proof which may be here competent, with a view to the ascertainment of the character of the claims of the pursuers under the bills on which the conclusions of the summons are rested.

The Lord Ordinary adopts fully the statement of Lord Neaves, in his Lordship's note in the case of York v. Gossman, July 5, 1861, to the effect that ‘the general rule is clear that an accepted bill must be presumed to have been granted, and to be held for value; and the further rule that this presumption can on1 be redargued by writ or oath is all but inflexible.’

The rule, however, is not altogether absolute, as the judgment of the Court affirming that of the Lord Ordinary in the case of York just referred to, and the previous case of Burns v. Burns, July 20, 1841, 3 D. 1273, suffice to prove. And if this be so, it humbly appears to the Lord Ordinary that the case with which he has now to deal is one within the exception from, rather than under, the general rule. He draws this conclusion from a consideration of the nature, so far as at present disclosed, of the apparently complicated transactions between the parties in relation to which the bills sued on were dram and accepted. Whether or not the Lord Ordinary is right in appointing the proof, which he has allowed to proceed before himself, under the recent statute, is a matter of minor consideration, compared with that of the question of the competency of the in otherwise than by writ or by reference to oath.”

The pursuers reclaimed.

Solicitor-General and Lancaster argued (1)—What was intended to be pleaded by the defenders was novation, but such a case was not relevantly averred; (2) even if it were, it can only be proved by writ or oath.

Young and Gifford supported the Lord Ordinary's judgment.

At advising,

 Judgment:

The Lord President—This case is some what peculiar. The course and nature of the transactions between the parties is stated pretty fully on the record. The pursuers had been in the habit of furnishing cotton to Messrs Cogan, and invoicing it to them; and Messrs Bartholomew were in point of form purchasers from the Cogans. It appears that bills were in use to be granted for the price of the cotton, and that these were accepted both by the Bartholomews and by the Cogans. It does not appear that there was any fixed proportion in regard to the amount for which the two firms respectively accepted bills. Indeed there is a statement by the pursuers that this matter was left very much to their discretion, and the pursuers did not know how much of the cotton each firm got. This last transaction was for about £14,000. It appears it was first settled for by three bills accepted by Bartholomews, and two accepted by Cogans—the former amounting to about £9000, and the latter to about £5000. These fell due and were not paid. Fresh bills were then drawn by the pursuers, one on Bartholomews for £4000 odds, another two on Cogans for nearly £10,000. In this way there was transferred to the Cogans the larger amount of the debt, and the smaller wan laid on the Bartholomews. I don't know under what arrangement that was done, but so it was, and the original bills remained in the possession of the pursuers. In the meantime bath Cogans and Bartholomews stopped payment. The pursuers ranked as creditors and received payment of dividends, reserving, as they say, their right to claim on the old bills. They then raise the present action, in which they state that those two bills sued for had been granted, and conclude for “payment of £4085, 1s. 9d., being the price of cotton bought by the defenders from the pursuers, and for which two bills were drawn by the pursuers upon and accepted by the defenders,” &c. They do not conclude for payment of the sum under deduction of any dividend end they had received from Cogans although it appears that they had received such dividends. That shows, in the first place, that this is not simply and purely an action for payment of two bills, because it is an action for the price of goods for which no doubt bills were granted; and the statements of the pursuers themselves showed that art of the price of the cotton so sued for had been extinguished by payment of the dividends received by them. The practical aim of the action, however, is to receive full payment after deducting the dividends received. That itself implied some inquiry into the proceedings that had taken and the transactions between the parties. I think in order to get at the whole matter, it is competent to allow a proof before answer as to the transactions of the parties and as to the footing on which the old bills remained in the possession of the pursuers. I think these are important matters to have before us in considering the question of law raised, and as it will still be possible for us, after the roof before answer is led, to hold that the rule of law contended for by the pursuers is applicable to the circumstances of this case, I think the proof should be allowed to go on.

Lord Curriehill—The principles of law involved

Page: 172↓

in this question are of the very greatest importance. If there had been a charge given on these bills and this were a suspension of it, or if this action had been laid on the bills alone, or if the pursuers had made no admissions in regard to the defenders' statements, I am very clear that the rule of law as to writ or oath would apply, and I would enforce it, however suspicious I might be of the pursuers' case. The rule, however, does not apply under all circumstances. In the case of Burns it was held not to apply. One judge in that case said that he so held, because, if the man's oath were taken to-morrow, he would not believe one word he said. I do not consider that a sound principle. But I concur with the principle laid down by Lord Fullerton in that case—“that where a pursuer does not and cannot entirely on the general presumption that value was paid in cash, but states value to have been given in a particular way, the truth of these statements may competently be tested by their extrinsic consistency with each other on the admitted facts of the case.” I the present action the pursuers begin by stating what the value consisted of. Indeed, it is an action for the price of goods sold and delivered, but I only consider this important on account of its being a judicial statement by the pursuers themselves of the value given. But then, in their condescendence they go farther, and state that the goods were furnished on the order of a different party from the defenders, and also delivered to that different party. The pursuers' own statements, therefore, put the case in an unusual position, calling for inquiry. There was no question here as to the constitution of the debt; the only question was as to its subsistence. The defenders say that the pursuers' statement is, that after the bills became due they accepted bills by other parties, these being the parties to whom the goods were sold and delivered, and that the second set was in lieu of their bills and superseded them. The pursuers reply that the statement they have made has this qualification, that the old bills were retained as an additional security. Now, that qualification may be disproved by any kind of evidence. I think that is the position in which this case stands. The question to be inquired into is—On what footing were the bills retained? I think the onus is on the defenders. I also agree with your Lordship that the fact that this action is for payment of the full sum, not giving credit for the large dividends obtained, is of itself a good mason for adhering to this interlocutor.

Lord Deas—There is one thing as to which I have no doubt—namely, that although this summons sets forth that it is for payment of the price of goods as contained in certain bills, that does not exclude the pursuers from standing on the law of evidence applicable to bills of exchange. I think that was the right way of libelling, and indeed the only safe way, because it might turn out that the bills were not good were not properly stamped, or were prescribed. It is a different matter altogether when you come to the pursuers' detailed statements. I think a pursuer may by his statements exclude himself from leading the strict rules of evidence. I don't think it expedient at present to direct the attention of the parties to the vital points of this case. This proof is allowed before answer, and I see no incompetency in that; it is a matter of propriety and discretion. I think this may very probably turn out to be a case in which the parties don't really dispute about fact so as to raise this point of law. It may also turn out that this is not the right action to attain the object which the pursuers have in view. But I concur, as the proof is before answer.

Lord Ardmillan also concurred, observing that the pursuers had stated enough in their own cam to show that this was not a question of negativing value, but one where the case was so opened as to make it safe and just that there should a proof before answer.

Adhere, with expenses.

Solicitors: Agents for Pursuers— Murray, Beith, & Murray, W.S.

Agents for Defenders— Maconochie & Hare, W.S.

 1867

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URL: http://www.bailii.org/scot/cases/ScotCS/1867/03SLR0170_1.html