Scottish Court of Session Decisions

These actions related to the trust-estate of the late Edward Carse, bootmaker in Musselburgh. The

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parties were, in the first action, Mr Drummond, who was judicial factor on the estate of the late Stewart Carse, painter in Musselburgh, pursuer, and the defender was Mr Lees, the sole surviving trustee of Edward Carse. He having died as after mentioned, the action was transferred against his representatives, and also against Mr John Gillespie, W. S., curator bonis to Thomas Carse, son of the deceased Edward Carse junior, the truster's son, and others, the whole beneficiaries or representatives of beneficiaries on the trust-estate. The purpose of this action was to reduce a decree of adjudication obtained, as after explained, in absence, by Mr Lees, as Edward Carse's trustee, against the widow and four of the children of Mrs Stewart Carse. The second action was one of count, reckoning, and payment at the instance of the whole beneficiaries on the estate of Edward Carse against Mr Drummond as Stewart Carse's trustee. The same questions being involved in the two actions they were conjoined.

Edward Carse had died in 1835 leaving a trust-disposition and settlement. The trustees were Edward Carse junior, the truster's son, Stewart Carse, the truster's nephew, and Mr Thomas Lees. Mr Lees, the last surviving trustee, died in January 1878. Stewart Carse had been appointed factor on his uncle's estate by the trustees in 1837, and had continued to act as such till his death in 1863. The minute appointing him bore “that he was appointed to be their factor, with power to uplift, receive, and discharge the rents, feu-duties, and interests due to the said trust estate from and after the term of Whitsunday 1837, and of which office Mr Stewart Carse hereby accepts.” In this capacity he had collected the rents and intromitted with the estate generally down to the date of his death, but it was alleged by Edward Carse's representatives that after 1840 he had failed to prepare and submit accounts of his intromissions. He had made various payments to the beneficiaries, but it was alleged that a large balance was still due to them on his intromissions. Mr Lees, as sole surviving trustee on Edward Carse's estate, had raised an action of constitution and adjudication against Mr Stewart Carse's estate in 1866, in respect of two sums due by it to Edward Carse's estate, in which decree in absence had been allowed to pass. The defenders were therein decerned to make payment of £454, 16s. 3d. as the amount owing to Edward Carse's estate and certain heritable subjects which had belonged to Stewart Carse were adjudged. The first of the present actions was, as already mentioned, a reduction of that decree of adjudication. In this action a remit had been made to an accountant to report upon Stewart Carse's intromissions, and in the result a large balance was brought out as due by his estate to the beneficiaries, and the action of count and reckoning was thereupon brought at their instance to obtain payment of this balance.

It has not been thought necessary to report more than the following branch of the actions,

One of the sums said to be due by Stewart Carse's estate, and included in the decree obtained in 1866, was £250 contained in a promissory-note by Stewart to Edward Carse, dated 14th January 1833. The note was holograph of Stewart Carse, and the sum was included in the inventory of Edward Carse's estate, signed by, among others, the debtor. There were on the back of the document markings of interest paid to the creditor. The last was in these terms—“1840, January 14—One year's interest, £10, paid on the within bill to this date, and also the previous interest. (Signed) Stewart Carse.” It was thus Subsequent to the prescriptive period. There were, further, up to 1846, in a cash-book kept by Stewart Carse as factor, various entries of the interest upon the note as having been paid by himself as debtor to himself as factor. Edward Carse's representative claimed payment, inter alia, of the contents of this note, which was refused on the ground that it was prescribed, and that the pursuers were barred by delay and taciturnity.

The Lord Ordinary ( Curriehill), after various procedure, including a proof, issued an interlocutor disposing of the whole matters at issue. The following are the parts of the interlocutor dealing with the question relating to the promissory-note:—“Finds that by promissory-note, dated 14th January 1833, the deceased Stewart Carse promised to pay to the also now deceased Edward Carse, one day after date, the sum of £250, value received; (2) Finds that the said note bears on the back thereof a marking holograph of the said Stewart Carse, and dated 14th January 1840, more than six years after the date of the said note, to the effect that he then paid interest on said note to said date; (3) Finds that in the cash-book kept by the said Stewart Carse as factor for the trustees of the said Edward Carse, there are various entries from 1840 to 1846 of further payments of interest by him upon said note; (4) Finds that by the markings on the note and entries in the cash-book it is proved that at the dates of said markings and entries a debt of £250 was due by the said Stewart Carse to the said deceased Edward Carse and his representatives; (5) Finds that at the dates of the decree of constitution and adjudication sought to be reduced, the said debt of £250, which formed one of the items for which said decree was given, was still resting-owing and unpaid by the said Stewart Carse and his representatives, with interest as concluded for in said action of constitution and adjudication.” ….

“ Note.—… . . Now, one of the assets of the estate at the death of Edward Carse senior, and which came into the custody of Mr Lees as law-agent, on the resignation of Edward Carse junior in 1837, was a promissory-note for £250 by Stewart Carse to his uncle, dated 14th January 1833, and payable one day after date. The note is holograph of Stewart. In 1866, some time after Stewart Carse's death, Mr Lees, then the sole surviving trustee of Edward Carse senior, found it to be his duty to recover from Stewart's estate the said debt of £250, and the balance due by him on his factorial intromissions. Now, on looking at the conclusions of the summons of constitution and adjudication, it will be seen that the defenders, the representatives of Stewart Carse, are sought to be decerned and ordained to pay to Mr Lees, as then the sole surviving trustee of Edward Carse senior, ‘the sum of £250 sterling, due by the said deceased Edward Carse, and contained in a promissory-note granted by the said Stewart Carse to the said deceased Edward Carse, dated the 14th day of January 1833, and payable one day after date, with interest upon the said principal sum at the rate of four per

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cent. per annum from the 14th day of January 1863 until payment… …

Now, the first objection which is taken to the debt sued for in the constitution and adjudication, and which might competently have been stated by the defenders in that action had they appeared and resisted the conclusions, is, that in so far as it consists of the sum contained in that promissorynote, the decree is bad, in respect the note was prescribed at the date of the action. It is quite true that at the date of the action in 1866 more than six years had elapsed after the date of the note; but the plea of prescription, founded upon the Act of 1772 (12 Geo. III. c. 72), does not exclude actions for payment of the debt after the lapse of six years. All that is declared by the statute is that no bill or note ‘shall be of force or effectual to produce any diligence or action in 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 become exigible.’ The Act thus does not exclude actions for the debt; it merely excludes action upon the bill as being the sole ground of debt; and accordingly the same statute provides that ‘it shall be lawful and competent, at any time after the expiration of the said six years, … . . to prove the debts contained in the said bills and promissory-notes, and that the same are resting and owing, by the oaths or writs of the debtor.’ Now, it is well settled that markings of interest on a bill in the handwriting of the debtor, if dated after the expiration of the six years, are sufficient proof of the debt and of its subsistence by the writ of the debtor. In the present case there is a marking on the back of the note, holograph of Stewart Carse, to the following effect:—‘1840, January 14.—One year's interest, £10, paid on the within bill to this date, and also the previous interest. (Signed) Stewart Carse.’ This marking is not only subsequent to the six years, but I think the evidence shows that it was made by Stewart Carse, the debtor, for the express purpose of eliding the sexennial prescription, or rather of preserving, under the hand of the debtor, evidence of the debt and of its continued subsistence. Further, there are, up to 1846, in the cash-book kept by Stewart Carse as factor for the trustees of Edward Carse senior, various entries of the interest upon that note as having been paid by himself as debtor to himself as factor. It is therefore quite clear that the debt did not become extinguished six years after its date, and that it subsisted and was in full force as late, at all events, as 1846. And the question comes to be, whether it still subsisted in 1866, or had been again destroyed by the lapse of six years from the date of the last marking in 1846?

The pursuer maintains that markings on the back of a bill, though after the lapse of six years, have only the effect of rearing up the debt for six years from the date of the marking, and not of establishing the subsistence of the debt as an obligation enduring until extinguished by payment by the long negative prescription; and he founds, in support of that argument, upon the case of Ferguson v. Bethune, 7th March 1811, Fac. Col. Now, that case is not very satisfactorily reported, but it does appear that one of the bills there dealt with was, in the original judgment, held to be non-subsisting, in respect that six years had elapsed between the date of the last marking on the back of the bill and the date of the action. Whether the Court had fully in view the precise words of the statute, and the distinction there taken between the extinction of the bill as a document of debt, and the subsistence of the debt after six years if proved in the manner allowed by the statute, does not appear from the report; and it is unfortunate that the Lord President (Blair), who delivered the judgment of the Court, does not in his opinion touch upon the point now in question, because any expression of opinion by that eminent judge as to the interpretation of the Act of 1772 would have carried with it the greatest possible weight. The effect of the judgment, however, as it stands, is much weakened by the fact that it was reclaimed against and altered without discussion, as the marking was found in point of fact to have been less than six years before the date of the action. In an earlier case— Russell v. Fairie, 23d May 1792, M. 11,130,—‘a doubt was started by one of the judges whether an interruption of the sexennial prescription by writing was to be considered as a renewal of the voucher, so as to make room for a new course of the same prescription, to be reckoned from the date of the interruption, as was found in the case of the septennial limitation of cautionary engagements; or whether the operation of the statute being thus completely done away the bill would subsist as a legal instrument for forty years, unless from the circumstances of the case there arose a presumption of payment. But it was not necessary to determine the point.’ And in dealing with the matter, Professor Bell, in his Commentaries, vol. i. p. 420, says—‘Such markings, provided they are in the debtor's handwriting, on the very last day of the six years, or after the expiration of the term, are answers to the plea of prescription, or rather proofs of the subsistence of the debt. It seems to follow that such proofs ought not to suffer the limitation proper to a bill, but the Court has considered such a constitution of the debt by relation to the bill as subject to a prescription as short as that of the original bill.’ And in a note to this passage he says—‘This question was raised on the Bench in Russell and Fairie's case, 1792, M. 11,130. The question was debated on the Bench, and the Judges much divided in opinion; seven Judges and the Lord President holding the limitation to take place, while the other seven Judges were of a different opinion; but the point was decided as above— Horsburgh v. Bethune, 13th February 1811, 16 F.C. 194; see also Ferguson v. Bethune, 7th March 1811, 16 F.C. 226, though as to this point that case is not reported with sufficient precision to be entirely satisfactory.’ Mr Bell is mistaken in supposing that it was in the case of Horsburgh v. Bethune that the decision was pronounced. It was in the case of Ferguson v. Bethune, 7th March 1811, that the judgment was pronounced under the circumstances already adverted to, and he corrects the error in his Illustrations (published in 1838), vol. i. p. 353, adding in a note—‘This case is imperfectly reported in the Faculty Collection. But unquestionably the Court did decide the last point, though, it is conceived, erroneously.’ And in the fourth edition of his Principles (published in 1839, sec. 599) Mr Bell says—‘The debt is restored, not as if the bill

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were re-established, to run a new course of six years, but as a debt subject to the prescription of forty years;’ and he refers to the case of M'Indoe v. Frame, 18th November 1824, 3 Sh. 295, where the Court concurred in the opinion delivered by Lord Pitmilly, who said—‘There is a marked distinction between the document and the debt. If an action be raised against one co-obligant before the lapse of six years, the bill will be sustained against all the rest for forty years; but if not till after the six years have expired, the only question will then be whether the debt be proved? By the lapse of six years all the privileges and effects of the bill are lost; and it is the debt and not the bill which must be proved by the writ or oath of the debtor; but the writ or oath of each debtor can only affect himself. It is quite inaccurate to say that the prescription is interrupted by a marking of payment of interest after six years, for this is merely the writ of the party establishing the debt. It has been thought by some that the writ or oath of the debtor rears up the bill for a second course of six years, but this is quite incorrect. It is the debt only which is raised up, and it is then subject to the ordinary prescription.’ It appears to me that the views here expressed, although not necessary for the actual decision of the case of M'Indoe, state the law more correctly than the judgment in the case of Ferguson v. Bethune. It is, I believe, now universally held by lawyers that the debt when reared up by markings after the lapse of six years remains in force until paid or compensated or extinguished by the long negative prescription; and I am humbly of opinion that to give to the Statute of 1772 the limited construction contended for by the pursuer would be doing violence to the plain language of the statute, which, while declaring the bill or note to be ineffectual as a ground of action, provides that the debt itself may be proved by the writ or oath of the debtor ‘at any time after the expiration of the said six years.’

The pursuer, however, further maintained at the debate on the proof, although he had not on the record or at the proof indicated his intention to do so, that even assuming the bill to have been reared up into a subsisting document of debt by the markings on its back, and by the entries in Stewart Carse's cash-book, yet, as the bill itself and these relative markings are holograph, they fall under the Statute 1669, cap. 4, which provides that ‘holograph missive letters, and holograph bonds and subscriptions in compt books without witnesses, not being pursued for within twenty years, shall prescribe in all time thereafter, except the pursuer offer to prove by the defender's oath the verity of the said holograph bonds and letters and subscriptions in the compt books.’ The pursuer declined to avail himself of the opportunity which I offered to him of adding to the record a plea founded upon the statute just quoted; and I might probably, without injustice to him, have ignored that part of his argument altogether, but upon the whole I think it better to deal with the argument, which appears to me to be entirely unfounded. Without stopping to inquire whether the Act 1669 was intended to apply to bills and notes at all, or whether in the position which Stewart Carse occupied in relation to the trust-estate of Edward Carse senior, he or his representatives are entitled to state such a plea as that now under consideration, one or two points are sufficiently clear to warrant me in refusing any effec to this plea of vicennial prescription.

In the first place, the pursuer allowed the case to go to proof without pleading the statute; he cannot therefore now object that the holograph character both of the bill and of the markings on it, and of the entries in the cashbook, admitted of being proved only by the writ or oath of ‘the defender.’ It must not be forgotten, as sometimes happens in questions under that statute, that a party founding on a holograph writing after the lapse of twenty years is not limited as to the mode of proving either the constitution or the subsistence of the debt; he is only prevented from proving the genuineness of the writing founded on except by the writ or oath of ‘the defender.’ But the statute must be pleaded to entitle ‘the defender’ to insist upon the restricted mode of proof; and where a proof pro ut de jure of the authenticity of holograph documents is allowed, and is taken without objection, the vicennial prescription cannot therefore be pleaded. In the case of Boyd v. Wyse, 2d July 1847, 9 D. 1405, that point was expressly decided, Lord Fullarton saying—‘Like every other prescription, it must be pleaded. It is a privilege of party. If the defender wished to avail herself of it, she ought to have done so when the Lord Ordinary remitted to probation, for it is a plea against the mode of proof. Instead, however, of making any such plea, they go to issue in the ordinary way, and the result is that the authenticity of the writing is established.’ Now, in the present case, although a proof pro ut de jure was allowed ‘before answer,’ that limitation did not affect the mode of proof. A proof before answer is a proof allowed before disposing of the relevancy or sufficiency of the averments; and it will never entitle a party to prove by parole facts which can be proved only by writ or oath, and to leave the competency of the proof for further consideration. But where the defender, who has it in his power to insist upon his opponent proving his case by writ or oath, does not exercise his privilege, and allows the fact remitted to probation to be proved by parole, he cannot be allowed to come forward after the proof has been taken and concluded without any objection, and then to maintain that certain matters could only admit of being proved by writ or oath.

But, in the second place, were it otherwise, and even if the present pursuer was still entitled to say that the verity of these documents can be proved only by the writ or oath of ‘the defender,’ I think that has been fully done in the present case”—[ His Lordship here stated his grounds for so holding upon the proof].

Drummond (Carse's judicial factor) reclaimed.

Additional authorities— Duncan's Trs. v. Shand, Jan. 7, 1873, 11 Macph. 254; Wink v. Speirs, Mar. 23, 1868, 6 Macph. 657; Waddel v. Waddel, Dec. 20, 1790, 3 Pat. App. 188; Cullen v. Wemyss, Nov. 16, 1838, 1 D. 32; Howden v. Howden, Jan. 20, 1841, 3 D. 388; Wilson v. Wilsons, Nov. 26, 1783, M. 11,646; Storeys v. Paxton, Dec. 7, 1878, 6 R. 293; Picken v. Arundale & Co., July 19, 1872, 10 Macph. 987;

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Bilsborough v. Bosomworth, Dec. 5, 1861, 24 D. 109; Mowat v. Banks, July 1, 1856, 18 D. 1093; Bank of Scotland, 1747, 5 Br. Sup. 748; British Linen Company v. Thomson, Jan. 25, 1853, 15 D. 314; Fisher's Trs. v. Fisher, Dec. 5, 1850, 13 D. 245.

At advising—