Scottish Court of Session Decisions

In February 1896 Henry Thomson & Company, wholesale Irish whisky merchants, Newry, Ireland, raised an action against Daniel Dailly junior, wine and spirit merchant, Dundee, concluding for (1) declarator that the defender was not entitled to sell or offer for sale, by himself or others acting under or for him, as whisky manufactured

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or blended by or for the pursuers, whisky not manufactured or blended by or for the pursuers, or to supply in implement of orders or requests for Henry Thomson's whisky, or Henry Thomson & Company's whisky, or of similar orders or requests, whisky not manufactured or blended by or for the pursuers; (2) interdict against the defender selling or supplying such whisky; and (3) £500 damages.

The pursuer averred—“(Cond. 2) The pursuers have recently become aware that the defender has been in the habit of wilfully and fraudulently in his said shop selling as the pursuers' whisky in reply to orders or requests for that whisky, whisky or other liquor not manufactured or blended by them, and known by the defender not to be manufactured or blended by or for the pursuers, on the false pretence made by the defender or by his shopmen and servants that such whisky or other liquor was whisky manufactured or blended by the pursuers. The whisky or other liquor sold by the defender was of a quality greatly inferior to the whisky manufactured or blended by the pursuers.” The pursuer then gave several specific instances of such sales by the defender, and further averred—“The whole of said sales were made fraudulently by the defender or his servants, they well knowing that the whisky sold as the pursuers' was not their manufacture or blend.” “(Cond. 6) By the defender's said wilful and illegal actings the pursuers have suffered loss, injury, and damage, which they estimate at the sum sued for, owing to an inferior whisky being supplied as their whisky to customers who ask for same. The pursuers not merely lose the profit which they would make upon the sales of such whisky, but the reputation of their whisky is seriously injured. The pursuers believe and aver that the said fraudulent sales have been very numerous and extensive.”

The pursuers pleaded—“(1) The defender having wilfully and fraudulently offered for sale and sold as whisky manufactured or blended by the pursuers whisky which was not so manufactured or blended, the pursuers are entitled to decree of declarator and to interdict as craved. (2) The defender having by his illegal and fraudulent actings caused loss to the pursuers to the extent of the sum sued for, they are entitled to decree therefor with expenses.”

On 10th March 1896 the defender lodged the following tender—“Kennedy for the defender stated that the defender, while affirming that he had never by himself, or persons acting under or for him, knowingly sold or offered for sale, or supplied as the pursuers' whisky, whisky which was not the pursuers', and absolutely disclaiming any intention or desire to do so, was anxious to avoid a protracted and expensive contest with the pursuers, especially as having been in business only six years he was not in a position to devote the necessary time and means to such contest, from which in no event would any advantage result to him, and therefore, solely with the view of preventing further litigations, but without prejudice to his pleas-in-law in the event of this tender not being accepted, offered, and hereby offers to consent to decree being pronounced in terms of the conclusions for declarator and interdict, and tendered, and hereby tenders, the sum of fifty guineas together with the expenses of process to date, as the same may be taxed by the Auditor, in full of the remaining conclusions of the summons.”

This tender was not accepted and the action proceeded. Proof was allowed, the result of which is given in the note to the Lord Ordinary's interlocutor.

On 26th November 1896 the Lord Ordinary ( Pearson) pronounced the following interlocutor—“Finds and declares, interdicts, prohibits, and discharges in terms of the conclusions of the summons: Ordains the defender to pay to the pursuers the sum of ten pounds (£10) sterling in name of damages; and decerns: And in respect of the defender's minute of tender lodged on 10th March 1886, finds the pursuers entitled to expenses down to said date: Finds the defender entitled to expenses thereafter.”

Note.—“The pursuers, an old-established firm of whisky blenders at Newry, Ireland, ask for interdict and damages against the defender, a wine and spirit merchant in Dundee, on the ground that, in implement of orders for the pursuers' whisky he has been in the habit of knowingly supplying whisky not blended by the pursuers. The pursuers' blend is well known in the market as Henry Thomson and Company's old Irish whisky. It is distinctive in flavour and colour, and remarkably constant in its special properties, even under chemical analysis; and as a rule experts can quite readily single it out from among other whiskies. There is a very large sale for it in Scotland, and the annual turnover in the Dundee district, which extends to Aberdeen, is from £15,000 to £20,000.

The defender has been a customer of the pursuers, through their Glasgow agent, since he acquired his present business from a Mr Macfarlane's representatives in December 1889; but his purchases of their whisky have been few and small. All that he got was in capsuled quart bottles, packed in two-dozen cases, the bottles being square shaped, with a distinctive green and gold label.

The instances founded on by the pursuers occurred at various dates during the year 1895—five in January and February, one in May, and the rest in October and November. They produce thirty-five samples in all, representing thirty-four separate purchases.

The questions I have to consider are—(1) whether the whisky sold in the defender's shop on these occasions was Henry Thomson's whisky? and (2) if not, whether it was sold wilfully as and for Henry Thomson's in the knowledge that it was not?

In order to succeed, the pursuers must make out their case quite clearly; and to begin with, everything must be presumed in favour of the honesty of the retail trader. Even if it be proved that he supplied another whisky as Henry Thomson's, that will not be enough if the facts are consistent with its having been done not wilfully but through inadvertence or innocent

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mistake. In my opinion, the pursuers have discharged the onus which lies upon them. I regard their case as being adequately and, indeed, amply proved.

The first question divides itself into two,—First, are the samples submitted and founded on by the pursuers the genuine ‘Henry Thomson’? and, second, are those samples the very whisky that was sold in the defender's shop on the various occasions libelled?

On the question which of the samples are genuine ‘Henry Thomson,’? the parties are not very far apart. It is common ground that Nos. 9 and 12 are genuine, these being sold as unopened quart bottles, corked and capsuled and bearing the pursuers’ label. Each party founds on the genuineness of these instances as favouring his contention, the idea being that these bottles were saved from being dishonestly dealt with by his opponent by reason of their being corked and capsuled. There remain thirty-two samples, and of these I take it to be conclusively proved that twenty-five are not Henry Thomson's whisky but something quite different. The trade experts, indeed, to whose evidence one naturally looks in the first instance on this question of identity of the whiskies, show a singular divergence as to some of these samples; but I may say, that where the trade experts on the two sides of this case differ, I prefer, without hesitation, those adduced by the pursuers, as being on the whole superior in intelligence and accuracy. It is not necessary, however, to weigh their evidence very nicely, for the defender's own scientific witnesses are clear upon the point, namely, that of the thirty-one samples submitted to them, only six are genuine ‘Henry Thomson’—these six including Nos. 9 and 12 above mentioned.

Then the next question comes up—Are these samples really and truly the whiskies bought in the defender's shop on the occasions libelled? Now, in the first instance, it lies upon the pursuers to make out the affirmative; and I may say at once that in my opinion they have succeeded in doing so. Assuming honesty, I think that after making all allowances for the risks incident to the journeyings and handlings of so many samples, the pursuers have excluded the possibility of maintaining, on reasonable grounds, that the samples are not substantially as they left the defender's premises, or that they have been mixed with others or exchanged with others through mistake or reckless handling. The impression to this effect made on my mind during the proof has been confirmed by a careful study of the printed evidence. Within certain limits this is not disputed by the defender. He does not suggest that when once the samples got into the hands of the law agents, or of the skilled witnesses, the risk of such mistake need be regarded. But he does suggest that at the earlier stages of their history, either in the hands of the original purchasers, or of the Messrs Younger and Mr Laird, or even of the pursuer's representatives in Glasgow, these samples were either dishonestly tampered with or were treated so recklessly and with such a lack of ordinary care as to be thoroughly unreliable. In my opinion the latter alternative is excluded by the evidence. Were the samples, then, tampered with, and by whom?

I do not think I lay an undue burden on the defender when I say that if the facts compel him to this alternative, as I think they do, he must show that it furnishes not merely a possible but a reasonable explanation, having regard to the evidence as a whole. Now, I do not think he succeeds in bringing it up to that, though he makes a case worthy of careful consideration. He points to the fact that the primary evidence is in the main the evidence of detectives, amateur or professional, whose interest it is to prove their case, and not the evidence of bona fide customers. He points to the analysis of certain pairs of samples which he contends have been proved to have been served to purchasers out of the same bottle, and which differ so much that the experts say it is impossible. Further, he furnished his own expert witnesses (though not the pursuers’ ones) with sample bottles of all the whiskies which he says he kept in stock in 1895, and finds that upon analysis the pursuers’ samples do not correspond to the contents of any of these any more than to genuine ‘Henry Thomson.’ He also observes upon the evidence of the actual purchasers in various particulars, e.g., that of Graham and Turner, as to their having gone into a close to seal up and label the samples they had just purchased in the defender's shop, while the description they give of it does not correspond to any existing close. Then there is this remarkable fact, that in January, and again in May, it was distinctly brought to the defender's knowledge that samples were being obtained at his shop for analysis; and there is a certain antecedent improbability in his continuing to act dishonestly in the knowledge of this fact. And there is the incident of Morton's sample (No. 7), where the shopman's attention being directed to the matter by a friend in the shop, he sealed up then and there the remainder of the bottle out of which the sample was taken, and it turns out to be genuine ‘Thomson.’ There is some doubt as to whether the sample is genuine ‘Thomson.’ But the defender takes it either way, and urges that if it is not genuine, it must have been tampered with.

Of these contentions of the defender, some are stated more absolutely than is warranted by the proof, and the pursuers have their reply to them on the evidence. Thus, the evidence that each pair of samples was taken out of the same bottle is by no means conclusive. The obscurity in the evidence about the close has, I think, little significance, and does not raise any doubt in my mind as to the good faith of witnesses, who struck me as being in other respects honest and trustworthy. Again, the fact of the defender having had warning early in the day is double-edged. It deserves to be taken account of in estimating the probabilities of the case; but if the pursuers'

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case on the samples is otherwise sufficiently made out, then the defender's knowledge makes the rest of their case much easier, for it practically excludes the theory of mistake or inadvertence on the part of the defender, even if that were not sufficiently excluded by the multiplicity of the instances.

Giving all due weight to the considerations urged by the defender, I am of opinion that they are overborne by the facts of the case. I cannot adopt the suggestion that the samples were tampered with, either by the purchasers, or by the Youngers or Laird, or by the pursuers' Glasgow representatives. The last suggestion has nothing at all to commend it for acceptance, and I dismiss it. The purchasers are a very varied list, with varying experience and power of observation; but I feel bound to say that they impressed me strongly as being honest and reliable witnesses. I certainly cannot for a moment attribute to them that participation in a widespread conspiracy to manufacture evidence and injure the defender which one theory of the defender's case postulates. The alternative is, that it was done by the Youngers if it was done at all. Now, the defender attacks the Younger family as having too many irons in the fire, as being mixed up in businesses which (it was suggested, but not proved) are shady, and as being the most probable source of the conspiracy. I must say I could detect nothing in the demeanour of any of them which would afford any ground for the imputation of either carelessness or dishonesty. They seemed to me to be clear-headed, accurate, and straightforward, and they gave no indication either of having anything to conceal or of pushing the case against the defender. I do not believe that the samples were tampered with in their hands. Moreover, it is not as if the question of tampering with samples were confined to those which passed through the hands of the Youngers. Sample No. 6, purchased by Mrs Fraser, an acute and capable witness, was (as I understand it) not in the Youngers' hands at all, but was handed direct by Butter to Mr Macalister, the pursuers' representative in Dundee district. That seems to me a negative instance of considerable weight.

On the third question, whether the whisky was so supplied knowingly, I am dispensed from saying much. As I have already observed, mistake or inadvertence on the part of the defender is out of the case, according to the evidence on both sides. This is not a case where the defender, not professing to sell or to keep Henry Thomson's whisky at all, may have furnished an Irish whisky to those asking for ‘Thomson,’ on the footing that it was reasonable fulfilment of the request. The defender professed to keep and supply ‘Thomson’ whisky, and had a conspicuous sign conspicuously displayed over the bar to that effect. The samples were asked for as Henry Thomson & Company's old Irish whisky, or in similar unmistakable terms, and they were habitually supplied out of a labelled ‘Henry Thomson’ bottle, and (though in one case this is left in some doubt) at a ‘Henry Thomson’ price, where the quantity taken was sufficient to indicate the price.

The defender says he desired to discourage the sale of Henry Thomson's whisky, because he made relatively more profit out of cheaper whiskies. He certainly had very little ‘Thomson’ to go on with, and there is a remarkable falling off in the turnover of Thomson's whisky in his establishment compared with what it was in Macfarlane's time, though this is no doubt partly attributable to the difference in the class of customers as explained in the evidence. But the defender got so little of Thomson's whisky during his seven years of the business, including two dozen to start with, two dozen ordered in December 1889, and two dozen more in May 1892, that the pursuers submitted figures to show that unless he was selling other whiskies as ‘Henry Thomson's,’ he had not enough on his own showing to supply the demand. But their figures fall short of demonstration, and I do not proceed on this as a ground of judgment. There is, however, a significant admission by the defender, which shows that he was eking out his supply. He had no ‘Henry Thomson’ in bulk—it was all in bottle. Whisky sold in bulk is over-proof, and requires to be watered; not so with bottled whisky, which is furnished as a specific merchantable article ready for consumption. Now, the defender says—‘It is possible that I may have watered Henry Thomson's whisky in bottle. (Q) Was that when you were wanting to discourage the sale of it?—(A) I cannot say that would be the reason of it; it would be to get a little more profit out of it.’ It is impossible to say how much there is behind this admission. But it is quite possible that one who did that not very flagrant thing might think it even comparatively meritorious, as well as safer under the Food and Drugs Act, to fill it up with cheap whisky instead of Dundee water. At all events, one who admits even so much does not hold a very secure position from which to make kindred charges against others.

As to the amount to be awarded in name of damages, the pursuers asked for an exemplary sum. In my opinion, however, the proof affords no ground for making any safe calculation of the amount of loss sustained by the pursuers' firm, and I therefore propose to follow the course adopted in a previous case at the instance of the same pursuers, and to award £10.

Since the above was written I have been informed that the defender lodged a minute of tender on 10th March 1896, and I have heard counsel as to the bearing on which it has on the question of expenses. The defender argues that it has effect as an ordinary judicial tender, and that while he is liable in expenses down to its date, he is entitled to expenses thereafter. The pursuers urge that owing to the qualifications with which the minute is introduced, it is not to be regarded as a tender at all. I have considered its terms carefully in

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reference to the rule that a judicial tender must be precise and unconditional, or, as it is sometimes put, unqualified. I think this tender is so within the meaning of that rule. The affirmation of innocence and of the desire to avoid litigation with which it is prefaced does not amount to a condition or qualification intrinsic to the offer made; the best test of that being that, if the tender had been accepted, the pursuers would have got decree in terms of the whole conclusions of their summons, subject only to the variance in the amount of damages. But the pursuers say that they are now entitled to more than decree in terms of the conclusions; that the proof having been led, and it being proved that on various occasions the defender knowingly and wrongfully sold as whisky blended by the pursuers whisky which was not so blended, they are entitled to have a finding to that effect inserted in the interlocutor as introductory to the decree of interdict, a result which certainly would not have been reached had the tender been accepted. In this view they would to that extent get more than was tendered, as the finding would (I am informed) be inserted in the extract decree. If this is the true criterion, it would follow that I can make the tender good or bad according as I withhold or give such a finding—a startling result. I had been disposed to insert such a finding when originally considering the case until I found that in the case of Begg decree was given simply in terms of the conclusions, which were the same as those in the present action. I am not disposed to insert the finding now merely for the purpose of enabling the pursuers to exclude the tender, even assuming it would have that effect I accordingly uphold the defender's contention on this point.”

The pursuer reclaimed, and argued—(1) The amount of damages awarded by the Lord Ordinary was too small. The defender admitted that he did everything in his power to discourage the sale of the pursuers' whisky, and he had used illegitimate means of doing so by watering it in bottle, and selling inferior kinds of whisky when asked for the pursuers'. The sales had on this account fallen off, and the pursuers' trade and good name had been seriously injured. If a man sells fraudulently a different kind of whisky from that asked, he is bound to account for the profit thus illegally made by him. A sum of £64 had been expended by the pursuers in detecting the fraud, and this ought to be paid by the defender, just as in shipping cases surveyors' fees were charged as part of the damages. The sum concluded for was not too much at which to assess the damages. (2) In any event, the pursuers were entitled to expenses. The tender made was really a conditional tender. If the pursuers had accepted it they would have been held as accepting the narrative as true.

Argued for defender—(1) As to increase of damages, there were no elements in this case in which the Court could give more damages than had been awarded. No special damage at all had been proved, there was no proof of loss of trade on account of the defender's action—in fact the sale of the pursuers' whisky in Scotland was increasing. Except in cases of defamation, only nominal damages were awarded where there was no proof of special damage— Morton v. Barclay, March 15, 1824, 3 Murray, 401. Where the action was one for solatium the amount of damage was a matter for the jury, but where the action was one for damages for loss of trade or anything that could be brought within precise limits, then if no special damage was proved by the pursuer, nominal damages only were given— Leather Cloth Company v. Hirschfield [1865], L.R., 1 Eq. 290. (2) As to the tender, the argument of the pursuers proceeded on the view that in order to make a tender good the defender is bound not only to agree to the conclusions of the summons but also admit every particular fault alleged against him in the condescendence. This was not the case. If a defender is not bound to admit the whole truth of the grounds of action, he is entitled to say in his tender—“I don't admit the grounds of the action, but I am willing to agree to the conclusions of the summons.” The defender in making a tender was entitled to reserve his statements and pleas, and also to deny that the pursuers had a claim against him at all.— Strachan v. Munro, July 5, 1845, 7D. 993; MacKarsie v. Dickson, November 28, 1848, 11 D. 164; Mitchells v. Nicoll, May 24, 1890, 17 R. 795.