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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Advocation - Morison & Field v. Jamieson & Co [1867] ScotLR 4_152 (28 June 1867) URL: http://www.bailii.org/scot/cases/ScotCS/1867/04SLR0152.html Cite as: [1867] SLR 4_152, [1867] ScotLR 4_152 |
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Page: 152↓
Circumstances in which held that a merchant who had made advances on security of goods consigned abroad, was entitled to charge a commission of 3 per cent. in addition to 5 per cent. interest on his cash advances, and was entitled to transfer to his own credit the sums received abroad as the price of goods, without holding them for the benefit of the consigner, to wait a fall in the rate of exchange.
This was an advocation from the Sheriff-court of Lanarkshire of two conjoined actions. There were three points raised—(1) the rate of commission charged by the respondents, Jamieson & Co., in their accounts with the firm of Morison & Field, the advocators, on cash advances; (2) the amount of exchange on the remittance of a sum of 47,000 dollars from America; (3) a claim in respect of the non-recovery of certain bills of a person of the name of Robertson. Morison & Field, of whom the leading partner was a nephew of Mr Jamieson, the leading partner of Jamieson & Co., entered into the trade of forwarding goods to New York, induced by the hope of support from Jamieson & Co. The support was given by granting acceptances, and, ultimately, by money advances applied to the retirement of bills for their behoof. The case involves mainly mere questions of fact, which are fully explained in the annexed judgment of the Lord Justice-Clerk. The Sheriff-Substitute ( Bell) and the Sheriff ( Alison) pronounced elaborate interlocutors containing a great number of particular findings
Page: 153↓
in fact. The Sheriff decided in favour of Jamieson & Co. Morison & Field advocated. Clark and Watson for them.
Gifford and A. Moncrieff in answer.
At advising—
An explanation given by Mr Jamieson in his evidence in reference to the cash advances, which is supported by the accounts and other documents, is, that originally the only advances contemplated were to be of comparatively small amount, for which, when amounting to a sum considerable enough to be so dealt with, a bill was to be given. Interest only, and not commission, on such advances was to be asked. According to Mr Morison in his evidence, there was nothing where advances were to be made in the arrangement of the nature of an actual or implied limitation of their amount; and as to all such advances, interest only was to be charged.
Confessedly, as I read the evidence of both of these parties as to the accommodation to be given by way of bills, a commission was to be allowed at the rate of a quarter per cent. per month during the currency of these bills. The statement of Mr Morison is at page 92. He says [reads]. This I should certainly interpret as a current commission continuing during the currency of the bills, whether in their original form or in the form of renewals. That that was clearly the meaning of the parties is proved by an examination of the first five accounts, as to which there was no dispute between the parties. The amount of the commission charged in these accounts, and not objected to, is calculated at a quarter per cent. per month upon bills, according to their actual currency; and these accounts having been settled upon that footing, establishes the fact, as it appears to me, beyond dispute.
The contention of the advocators was, that one per cent. was chargeable upon the original transaction, and another on a retirement or renewal—a mode of dealing said to be in accordance with the practice of trade. The Sheriff-substitute, in a series of findings, disregarding, as it appears to me, both the parole and the documentary proof of the actual agreement and dealing of the parties, has apparently adopted some such principle as applicable to their dealings. The footing of the one per cent. on four months’ bills, so far accords with the rate on the footing spoken to, but the bills embraced in the accounts are to a very great extent six months, the accounts do not at all concur with bills, and the one per cent. on retirements is one which is only, as it appears to me, to be found in an alleged admission at the debate, and to be founded in the alleged practice of trade, about which, moreover, there is conflicting evidence.
The question as to the commission on bills is important, not as directly affecting the state of the account, but with reference to the disputed items of commission to be charged on cash advanced to retire bills not paid by the advocators. So far as the actual commission on the bills is concerned, there is no attempt made to disturb the accounts. The actual question in dispute relates to the charge on cash advances to retire the bills. It appears to me clear on the evidence that, in the spring and summer of 1861, a pressure in the money market, and a distrust in transactions with America, occasioned a difficulty on the part of the banks in discounting bills of the advocators. It is certain that the bank declined to discount bills tendered by the advocators with the respondents’ acceptances, whereupon Jamieson & Co. proceeded to retire the acceptances when due. This condition of the fact is spoken to by Mr Bruce, p. 113, A, B, C; by Mr Jamieson, p. 107. On the 13th June of that year they wrote to Morison & Field the letter, pp. 54, 55.
The account had been previously commenced in draft, as appears from a letter of the day before (p. 51), written by the advocators, in which a proposed charge of commission on this very head is introduced. The letter of the 13th states an actual charge of commission on cash advanced, and notice is expressly given of the rate at which the dealings were to continue. It calls special attention to the fact of the charge, and states the rule of future dealings. It certainly appears reasonable that if, for the mere accommodation of their names, they should have paid to them a commission of a quarter per cent. per month, they should not be entitled to a less commission when, in lieu of their names to bills, they actually advanced the money represented in those bills; the original contemplation of small cash advances was altered; and if the commission of a quarter per cent. per month was, as it certainly appears to have been in the view of these parties, a reasonable remuneration for bill accommodation, it would not be less reasonable when money was actually advanced out of their pocket. But, as it appears to me, the necessity of considering the position of the parties generally as to the reasonableness of the charge, or its unreasonableness, is rendered as to this question unnecessary, having regard to the correspondence before us.
It is not, in point of fact, disputed, and it really does not admit of dispute, that the rule, as stated in this letter, must be applied to dealings posterior to the date of the letter. The argument is, that it could not be held to extend to any transactions in reference to advances to be made in the retirement of bills then in the circle, but only to any future transactions entered into with a view to new consignments. It seems to me that this view is not compatible with any reasonable view of the expressions in the letter, and is rendered plainly inadmissible from the evidence of the understanding of the advocators themselves as to its true construction, as disclosed in their contemporaneous writing. The advance of money to relieve current bills was, in every sense of the word, advance of money; and if the advocators did not desire that it should be advanced, their business was to find the money themselves. The advance to be made to withdraw current bills was cash advanced, for which it was said that the charge should be the same as for accepting. But it is plain that the advocators so understood it, for in their letter of the 12th June (p. 51), misdated 12th May, and in reference to the very account formally transmitted on the 13th, but evidently seen in draft before, they say “£60 is about the average, but you may charge £65 if you like.” Now this was a charge for commission on the assumed average of cash advances during the currency of the account, which might be variously viewed as being £6000 or £6500; and, taking the one or other sum, the £60 or £65 comes out. Therefore they assent to a payment on cash advances made by the respondents in reference to the retirement of bills made during the currency of the past account without objection. Can they say that they did not understand
Page: 154↓
This seems to me conclusive, and it is very strongly confirmed by the fact, that when, in commissions made subsequently, in objecting to accounts in which this item was introduced, objections were made to the amount on which the commission was charged—implying a recognition of the principle of charge. The letters are quoted in the judgments of both Sheriffs; they seem to be capable of bearing out the meaning attached to them by the Sheriff-depute, whose reasoning on that point I adopt.
In my view the interlocutor of the Sheriff is correct on this point, and that of the Sheriff-substitute wrong.
On the second point, viz., the rate of exchange charged in reference to the remittance of 47,000 dollars from New York, the case stands thus:—
The New York house of the respondents, which traded under the firm of Babcock & Co., were, according to the course of dealing, to have power over the goods, and the produce of the consignments of goods, sent to New York by the advocators. In a letter of the 29th November 1861 (p. 55, Appx.), Morison & Field wrote as follows:—“The mode in which this was worked out was to have the produce realised by sales of goods paid to them.” The 47,000 dollars in question were paid by Fanshaw & Fairchild as the produce of consignments realised by them. As the rate of exchange ruled extremely high, and was anticipated by the advocators to be likely to fall, they applied to Babcock & Co., once on the 27th September, and again on the 18th November 1862, to retain sums paid in by Fanshaw & Fairfield, expressing in one their wish, and stating in the other that they would be obliged if sums of about £2000 should be retained in their hands, to give the chance of a more favourable exchange. These requests were not complied with; but on the 21st February 1863, in reference to a payment of 25,000 dollars, there is the letter on which the contention of the advocators hinges. Jamieson & Co. intimate that they had advised Babcock Brothers & Co. that, holding the sum of 47,000 dollars, they sent a credit note—which is equivalent to an appropriation of the fund, and a fixing of the rate of exchange as of its date—without intimation, and without consent; that they were entitled to the benefit of a fall, which actually took place; and they gave an intimation (p. 15) on the 1st September 1863, when the rate was at 138 of exchange that they were ready to accept a credit note at that date, and so fixed the minimum of the rate chargeable at 138 per cent.
The respondents justify their proceeding to close the account upon the 26th June, denying that they were bound to continue the indulgence, as they view it, longer than they thought right; that, having these monies impressed in their hands, in order to indemnify themselves, they could not be held, in their instructions to their New York house, to have done more than give a fair opportunity for a reasonable time, which they say they did. They further state that they were justified by the fact that the advocators, contrary to their arrangement, got Fanshaw and Fairchild to remit to them a sum of £500 direct, which they should have paid in to them, and that, the account being to that extent unsecured, they were justified in acting as they did without notice. I am disposed to think that the evidence supports the view of the respondents; that a sum of £500 was, without previous notice, got by the respondents from Fanshaw & Fairchild; and that this involved such a departure from the arrangements as to warrant the summary closing of a period of voluntary non-application of proceeds to purposes to which they were primarily destined. I find great difficulty in finding, in the indulgence granted by the respondents, any implied condition as to the giving of notice previous to the application of the proceeds, the more that any notice, to be available to the effect of enabling the advocators to take any advantage of it by finding funds to relieve Jamieson & Co. of their obligations, would have involved a very considerable time, and thus crippled the respondents in a way that could not have been contemplated. But it is unnecessary in my view to deal with this question on these grounds. There appears to me a ground which is conclusive against the plea of the advocators, and that is, that the advocators received, and failed tempestivè to object to, the intimation given by the respondents of the appropriation of the money in their hands, and the rate of exchange as intimated.
The exchange was in a state of constant fluctuation—it was not proceeding uniformly in the direction of a lower rate—and was in June higher than in May. If, in such a condition of the market, the advocators were to repudiate the intimation, they were bound to have done so immediately. If there was no objection made on the intimation, the respondents were entitled, in their financial arrangements, to hold the matter ended. They could not hold that their application of outstanding obligations was to be kept open, and that for an indefinite period—giving the benefit of any fall to the advocators, but themselves fixed peremptorily to a minimum rate of 59 per cent. The first intimation of dissent was in the letter of 4th August (p. 14), sent to the New York house. I hold that, in this case, to have been too late; and, therefore, I think that the advocators have failed to show any ground for alteration of the judgment on these grounds.
As to Robertson's bills, there is a total deficiency of proof.
The case of the advocators rests upon the reception of these bills, and the alleged failure to recover their amount. The footing on which they were received, the nature of the undertaking in reference to the proposed dealing of the respondents with them, is left in obscurity. The particular neglect of which they are said to have been guilty, and the particular instructions given and not followed out, are scarcely hinted at. Whether invested with discretion as to the adoption of proceedings in regard to them, or under positive directions to proceed at all hazards, whether the institution of proceedings should promise to be of benefit or not, is left to conjecture; what indemnity, if any, was offered for the expenses to be incurred in proceedings against Robertson is not stated; and, above all, it is by no means made out that, Robertson, if sued in judicial proceedings, would have paid anything. The bills, when transmitted, were some of them over due—one had been protested-affording no very hopeful prospect of realizing judicial proceedings. It is certain that Robertson ceased to be in business for himself; and, though a witness is brought who was in New York (p. 99) in 1860, and who says he was not then insolvent, he admits that he knows nothing except from
Page: 155↓
The other Judges concurred.
The judgment of the Sheriff was accordingly adhered to.
Agents for Advocators— Jardine, Stodart & Fraser, W.S.
Agents for Respondents— Campbell & Smith, S.S.C.
