Scottish Court of Session Decisions

The circumstances out of which this case arose are narrated in a previous report, 12th May 1881, ante, vol. xviii. p. 491. On 27th February 1883 the Lord Ordinary ( Kinnear) approved of a report by Mr Baxter, W. S. (to whom the accounts had been remitted). The pursuer (Largue) having reclaimed, the Court on 27th June 1883 pronounced the following interlocutor:—“The Lords having considered the reclaiming-note for the pursuer against Lord Rutherfurd Clark's and Lord Kinnear's interlocutors of 28th June 1881 and 24th February 1883, Appoint the pursuer to state in writing his objections to the defender Mr Adamson taking credit for the sums claimed by him under the head of management and legal expenses, and the defenders to answer the same; the said written objections and answers to be lodged in eight days each.”

In obedience to this interlocutor objections were lodged for Largue, to which answers were returned by Urquhart and others. The first item objected to was—

I.—“1877, Dec. 6. By paid Mr Morison, S.S.C., pursuer's expenses in reclaiming-note, £19, 16s. 10d.

The objections to it were—“1st, That Mr Anderson had no authority from the defender Mr Urquhart to make the payment; 2d That being a cash advance it does not fall within the preference of Mr Adamson as law-agent on which the defenders found; and 3d, That it is not a payment for which Mr Anderson has a preferable claim as in a question with the pursuer under the agreement referred to in the 5th and 6th articles of the pursuer's condescendence.”

Answered for Urquhart and others—“(1) That the defender Adamson had authority from the defender Urquhart to make the payment; (2) That it was a disbursement properly made in the ordinary course of the defender Adamson's law agency, or at least in the ordinary course of his factory; and (3) that it is a preferable claim within the meaning of the contract constituted by the letters of 29th June 1878.”

II.—“Jan. 30. By paid Scott Moncrieff & Wood their account in Allan v. Urquhart and Brown, £90, 4s.”—commencing May 7, 1877, ending June 28, 1878.

“This is the account said to have been incurred to Messrs Scott Moncrieff & Wood in the said action of reduction and payment, and the pursuer

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objects to its being allowed on the grounds —1st, That Mr Adamson had no authority from Mr Urquhart to employ Messrs Scott Moncrieff & Wood in defending said action, and that in point of fact he did not employ them, and at all events did not employ them on the footing of their being paid by Alexander Brown's executor, their employers being Messrs Redfern, Alexander, & Co. of London, the mortgagees on Alexander Brown's estates; 2d, That Mr Adamson was not legally bound to pay the account to Messrs Scott Moncrieff & Wood; That in point of fact he did not pay the account; And 4th, That even if he had paid the account, such payment does not fall within the preference founded on by the defenders, and was not a payment for which Mr Anderson has a preferable claim as in a question with the pursuer under the said agreement.”

Urquhart and others answered—“The defenders concur in stating—(1) That the defender Adamson had authority from the defender Urquhart to employ, and did employ, the defenders Messrs Scott Moncrieff & Wood in defending the said action, and reference is made to the preceding preliminary observations, and the documents printed in the appendix hereto, with the explanation that Messrs Redfern, Alexander, & Co. had at one time also employed Messrs Scott Moncrieff & Wood; (2) that as an employer, and, separatim, as a factor for a principal furth of Great Britain, the defender Adamson was legally bound to pay the said account; (3) that he has thought it proper meanwhile to refrain from paying said account; but (4) that it is an obligation properly incurred in the ordinary course of his law agency, or at least in the ordinary course of his factory, and is a preferable claim within the meaning of the contract constituted by the letters of 29th June 1878.”

III.—“By paid them” ( i.e., Messrs Scott Moncrieff & Wood, W.S.) “their account in Urquhart v. Largue, £44, 19s. 3d.”—commencing December 5, 1877, ending June 29, 1878.

“It is objected to on the grounds—1st, That the defender Urquhart did not instruct Mr Adamson to give authority to incur the account; 2d that Mr Adamson was not legally bound to pay the account; 3d, that in point of fact he did not pay the account; and 4th, that even if paid, such payment was not within the preference founded on by the defenders, and was not a payment for which Mr Adamson on a sound construction was intended to have or has a preferable claim in a question with the pursuer under the said agreement.”

Urquhart and others answered—“Admitted that this account was incurred with reference to said action of reduction. As regards the pursuer's specific objections thereto, all the defenders concur in stating—(1) that the defender Urquhart did instruct the defender Adamson to give authority to incur the account, and (2, 3, and 4) they here bold as repeated, brevitatis causa, their answers to objection 2.

IV.—“By paid Scott Moncrieff & Wood, W.S., their account in Petition of D. Brown for recal, £32, 0s. 11d.”—commencing May 16, 1877, ending March 30, 1878.

“The defender Mr Urquhart had no right or title to employ Mr Adamson to conduct the proceedings under the petition for recal; and in point of fact he did not instruct Mr Adamson to employ Messrs Scott Moncrieff & Wood to do so; 2d, Mr Adamson was not legally bound to pay the account; 3d, in point of fact he did not pay the account; 4th, if he had paid it, it was not a payment for which he is entitled to take credit as being a preferable claim in a question with the pursuer under the said minute of agreement; and 5th, the said account, if incurred on the employment of Messrs Urquhart and Adamson, or either of them, was so incurred on their part in bad faith, and in furtherance of proceedings carried on against the interests of the said David Brown, whose name they were using.” Urquhart and others answered—“All the defenders concur in stating—(1) that in point of fact Mr Urquhart did instruct Mr Adamson to employ Messrs Scott Moncrieff & Wood to conduct the proceedings in question; (2, 3, and 4) they hold as here repeated, brevitatis causa, their answers to objection II.; and they concur in stating (5) that the defenders Urquhart and Adamson had grounds for taking the proceedings in question. Denied that such proceedings were taken in bad faith, and averred that they were adopted on the advice of counsel, after careful consideration, as the most proper course to bring to a satisfactory termination the litigation referred to in objections I. and II.”

V.—“By paid periodical interest on factor's cash account, £20, 9s. 11 1 2d.”

“The interest is objected to—(1) as not falling within any preference claimed by the defenders; and (2) its amount will fall to be adjusted in reference to the findings of the Court on the other objections.”

Urquhart and others answered—“The interest in question has been calculated as at 29th June 1878, the date down to which your Lordships have held that the defender Adamson's preferable claims fall to be stated.”

VI.—“By paid Mr Adamson's business account, £129, 11s. 6d.”

“This account, beginning 2d October 1876, and ending as at June 29, 1878, is for business said to have been performed by Mr Adamson on the employment of the defender William Urquhart, trustee and executor of the late Alexander Brown. 1st, The greater part of this account was not incurred on the employment or by the authority of the said William Urquhart; and in any view it would have been ultra vires of Urquhart, qua executor of Alexander Brown, to have incurred it as a charge on the executry estate. 2d, A considerable portion of it, amounting to £44 or thereby, is for business connected with the petition and relative procedure at the instance of David Brown for recal of the curatory, and for this the said John Adamson had no legal authority. He was not employed by the said William Urquhart to conduct the said business, or if he lent himself to the proceedings, he did so in the knowledge that David Brown was insane, and for the purpose of defeating the said David Brown's interests, and putting an end to the claims which David Brown's curator had made against the said William Urquhart, and which claims were ultimately successful. 3d, The remainder of the said business account is objected to as follows, viz., one portion, amounting to £42 or thereby, relates to the said case of Allan v. Urquhart and Brown, which if incurred, was incurred solely on

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the responsibility and in the interests of the said mortgagees Redfern, Alexander, & Company; and another portion, amounting to £20 or thereby, relates to the said case of Urquhart v. Largue, mentioned in condescendence 5, and to the pursuer's claims against Mr Urquhart, and if incurred, was for work done towards defeating those claims against which there was admittedly no just defence.”

Answered for Urquhart and others—“All the defenders concur in stating—(1) That the whole of this account was incurred on the employment of the defender Urquhart qua trustee and executor of Alexander Brown, but they maintain that the particular capacity in which it was incurred by Mr Urquhart has no bearing on the present question; (2) that the defender Adamson was employed to conduct the proceedings in question by the defender Urquhart, who, as already mentioned, had good grounds for taking these proceedings; and (3) that as regards the first portion of the account here objected to, the defender Urquhart was the employer of the defender Adamson; and as regards the second portion, relating to the case of Urquhart v. Largue, the defenders beg to point out that the present pursuer was not successful therein. The pursuer's averments to the effect that accounts which in point of fact were incurred by the defender Urquhart ought not to have been incurred by him are irrelevant.”

Argued for the pursuer—The interlocutor of the Lord Ordinary of 11th January 1881, adhered to on 12th May 1881, had decided nothing except that any preference of Mr Adamson's claims was to be considered as at 29th June 1878, the date of the letters constituting the agreement between the parties. At that date Mr Adamson had no preferable claims except such as were covered by the lien or hypothec which he had as a law-agent over his client's title-deeds. Now, a law-agent had no lien or hypothec in respect of cash advances— Christie v. Ruxton, 24 D. 1182; Paul v. Dickson, 1 D. 867; Begg on Law Agents, 2d ed. p. 216. The first disbursement now objected to was just a cash advance, which might have been properly made, but was not covered by an agent's lien— Kemp v. Young, 16 S. 500. As regards the accounts mentioned in the second, third, and fourth objections, these were incurred not to Mr Adamson but to his town agents. No doubt under the law as it formerly stood, these accounts would have been covered by Mr Adamson's lien, on the ground that Mr Adamson would have been personally liable in payment thereof— Walker v. Phin, 9 S. 691; Kemp v. Young, 16 S. 500; but a change had been effected by the Law Agents Act of 1873, which rendered the country agent no longer liable to the town agent for payment of the latter's account—36 and 37 Vict. c. 63, sec. 21. As regards the fifth objection, the interest to be allowed would of course depend upon the fate of the other objections. As regards the sixth objection, a part of Mr Adamson's business account had been improperly incurred, and ought not to be allowed as in a question with the pursuer. In consequence of the production of two powers of attorney by Mr Urquhart in favour of Mr Adamson, dated 6th December 1876 and 10th August 1877, the pursuer departed from his objections in so far as they rested on the alleged want of authority on the part of Mr Adamson to incur any of the accounts in question.

Argued for the defenders—The sole question was whether the accounts and disbursements now objected to were or were not preferable claims within the meaning of the letters of 29th June 1878. At that date the pursuer had no preferable claim, the inhibitions (the competency of which, moreover, was denied) not having been followed up by any decree of adjudication —2 Bell's Comm. (M'Laren's ed.) 138–9. The pursuer had, in any case, by withdrawing the inhibitions and summons of adjudication, voluntarily abandoned any preference which he might otherwise have secured. What he got in return was an acknowledgment that Urquhart was truly indebted as executor in certain sums, which however were not to be paid till the Ceylon estate was realised. It was only the balance, if any, of the proceeds of the Banff properties that was to be paid to the pursuer after meeting Mr Adamson's preferable claim. The pursuer now wished to read the words “preferable claim” as if there had been added the words “under a law agent's lien or hypothec.” But at common law Mr Adamson had a larger preference, as a factor acting under a power of attorney which empowered him to sell the subjects in question and receive the purchase money. This gave him a right to retain the money in payment of his whole claims and cautionary obligations—Ersk. iii. 4, 21; 2 Bell's Comm. (M'Laren's ed.) pp. 110 and 111; Wight's Trustees v. Allan, 3 D. 243. The pursuer's own statements in the summons and in the condescendence showed his recognition of the fact that Mr Adamson was a factor as well as a law-agent, and entitled to a factor's lien. On the assumption, however, that Mr Adamson was entitled to no more than a law-agent's lien, the pursuer's objections were unfounded. I.—This was a reasonable and ordinary disbursement of a law-agent, and therefore covered by his lien—2 Bell's Comm. (M'Laren's ed.) 107; Lord Cunningham's note in Kemp v. Young, 16 S. 500; Inglis & Weir v. Benny, 4 S. (N.E.) 118. II. III. and IV.—No doubt the Law Agents Act had relieved country agents of personal liability to town agents, but it contained no enactment altering the common law as to a country agent's lien, and it had not been shown that such lien rested exclusively on the personal liability of the country agent. In the present case, however, Mr Adamson was acting, not merely as a country agent, but as a factor for a principal furth of Great Britain, and as such was personally liable to the town agents whom he employed. VI.—It was irrelevant to allege that any part of Mr Adamson's business account was improperly incurred. The sole question was whether the account had been incurred by the client— Palmer v. Lee, 7 R. 651—and this was now admitted.

At advising—