Clark's Executrix v Brown
| Jurisdiction | Scotland |
| Judgment Date | 20 November 1934 |
| Docket Number | No. 14. |
| Date | 20 November 1934 |
| Court | Court of Session (Inner House - Second Division) |
2D DIVISION.
Evidence—Loan—Donation—Method of proof—Action by executor for repayment of alleged loan—Sum transferred by banker as loan from account of deceased to account of defender—Letter by banker to deceased referring to transaction as loan—Letter by defender to pursuer admitting receipt but alleging gift—Scope of inquiry—Writ or oath—Competency of parole evidence—Onus of proof.
In an action brought by an executor for repayment of a sum alleged to have been lent by the deceased to the defender, who was her nephew, the pursuer averred that the bankers of the deceased, on her instructions, had transferred the sum in question from her account to that of the defender, and he founded on a letter from the bankers to the deceased in which the transaction was referred to as a loan, and on a letter from the defender to the pursuer's law-agent admitting receipt of the money but alleging a gift. The defender in his answers denied that the transaction was a loan, and pleaded that the pursuer's averments could be proved only by the writ or oath of the defender. The Sheriff-substitute, and on appeal the Sheriff, sustained this plea.
Held (diss. the Lord Justice-Clerk) that the pleadings disclosed circumstances extrinsic of the constitution of the alleged debt which might competently be proved by parole evidence; and caseremitted to the Sheriff-substitute to allow the parties a proofhabili modo.
Thomas Clark, executor-dative to the late Mary Clark, Whitehill, Dalrymple, brought an action in the Sheriff Court at Ayr against Thomas Clark Brown, Auchengibbert, Cumnock, for payment of a sum of £900 with legal interest from 6th March 1924.
The parties averred:—(Cond. 2) "The defender is a farmer at Auchengibbert, Cumnock, and is a nephew of the said Mary Clark." (Ans. 2) "Admitted." (Cond. 3) "On or about the month of March 1924 the defender took on lease the farm of Auchengibbert aforesaid and applied to the said Mary Clark for a loan to assist him in stocking the farm." (Ans. 3) "Admitted that in March 1924 the defender took on lease the farm of Auchengibbert presently tenanted by him. Quoad ultra denied." (Cond. 4) "On 6th March 1924 the Clydesdale Bank, Limited, Ayr, acting on the instructions of the said deceased Mary Clark, transferred, out of moneys belonging to her in their hands, the sum of £900 to the credit of the defender to meet pro tanto a cheque for £1400 drawn on them by him. A copy of a letter from said Bank to the said Mary Clark dated 6th March 1924 is produced and founded on." (Ans. 4) "The copy letter produced by the pursuer is referred to for its terms. Quoad ultra denied." (Cond. 5) "This sum of £900 was a loan by the said Mary Clark to the defender. Said letter of 6th March 1924 is again referred to. The said loan has never been repaid nor has any interest ever been paid thereon." (Ans. 5) "Denied that any loan was ever made by the deceased Mary Clark to the defender." (Cond. 6) "The pursuer as executor foresaid has called upon the defender to make repayment of said loan and interest, but the defender, alleging that the money transferred as aforesaid to his credit was a gift, refuses or delays to do so; accordingly the present action has been rendered necessary. A copy of a letter from pursuer's agent to defender and a holograph letter from defender in reply thereto dated respectively 31st March 1933 and 6th April 1933 are produced and founded on." (Ans. 6) "Admitted that the pursuer as executor has called upon the defender to make repayment of the loan condescended on and that the defender refuses to do so. Quoad ultra denied."
The letters by the bankers of the deceased and by the defender to the pursuer's agent, which were produced and founded on by the pursuer, were in the following terms:—
| "Miss Mary Clark, | The Clydesdale Bank, Limited, |
| "Whitehill Farm, Dalrymple. | Ayr, 6th March 1924. |
"Dear Madam,—Referring to your call on 28th ulto., we have now received from the Controller, Money Order Department, a Warrant for £275 in payment of Mr Thos. C. Brown's War Savings Certificates and we now enclose a Deposit-Receipt in your name for £412, 7s. 9d. and one in name of Mr Brown for £61, 6s. 6d., together with Certificates of the Interest accrued on the respective Deposit-Receipts and we annex a note of the whole transaction which we have no doubt you will find in order.—Yours faithfully,
"G. Miller, Agent.
| "Miss Mary Clark. | |
| Deposit-Receipt | £1300 0 0 |
| Interest thereon | 12 7 9 |
| £1312 7 9 | |
| Deduct—Loan to Mr Thos. C. Brown | 900 0 0 |
| New Deposit-Receipt | £412 7 9 |
| "Mr Thos. C. Brown. | |
| Deposit-Receipt | £277 0 0 |
| Interest thereon | 9 6 6 |
| War Savings Certificates | 275 0 0 |
| £561 6 6 | |
| Loan from Miss Clark | 900 0 0 |
| £1461 6 6 | |
| Deduct to meet Bank Cheque | 1400 0 0 |
| New Deposit-Receipt | £61 6 6 |
"Auchengibbert,
"Cumnock, 6th April1933.
"Mr Welsh.
"Dear Sir,—I received your letter dated 31st March & thought I might be in Ayr this week but have been busy with the sowing. As I explained to you the money was given to me by my Aunt as a gift.
"Possibly the Bank did not understand this, because I remember my Aunt saying when she gave me the money, that the Bank had given her a paper to be signed, but she said that I did not need to sign it.—Yours faithfully,
Thos. Brown."
The defender pleaded, inter alia:—"(4) In any event, the pursuer's averments are provable only by the writ or oath of the defender."
On 22nd November 1933 the Sheriff-substitute (Menzies) sustained the defender's fourth plea in law; found that the pursuer's averments of the defender's indebtedness could be competently proved only by the writ or oath of the defender; and allowed the pursuer, if so advised, to lodge in process within fourteen days the writ or writs on which he founded.1 The pursuer appealed to the
Sheriff (Mackenzie) who, on 13th March 1934, adhered to the interlocutor of the Sheriff-substitute.
At advising on 20th November 1934,—
LORD HUNTER .—The pursuer in this action is the executor-dative of the late Miss Clark. He sues the defender, who was a nephew of Miss Clark, for payment of £900.
According to the pursuer's averments the defender, about March 1924, applied to Miss Clark for a loan to assist him in stocking a farm which he had taken. Article 4 of the condescendence annexed to the initial writ is in these terms: "On 6th March 1924 the Clydesdale Bank, Limited, Ayr, acting on the instructions of the said deceased Mary Clark, transferred, out of moneys belonging to her in their hands, the sum of £900 to the credit of the defender to meet pro tanto a cheque for £1400 drawn on them by him. A copy of a letter from said bank to the said Mary Clark, dated 6th March 1924, is produced and founded on." When the terms of the letter are looked at, it appears that the transfer is specifically referred to as a loan to the defender. The pursuer alleges that the loan so made has never been repaid. The defender contents himself with a denial that any loan was ever made to him.
Condescendence 6 is in these terms: "The pursuer, as executor fore-said, has called upon the defender to make repayment of said loan and interest, but the defender, alleging that the money transferred as aforesaid to his credit was a gift, refuses or delays to do so. Accordingly the present action has been rendered necessary. A copy of a letter from pursuer's agent to defender and a holograph letter from defender in reply thereto, dated respectively 31st March 1933 and 6th April 1933, are produced and founded on." The defender's answer is that he admits
being called on to repay an alleged loan, and that he refuses to do so.Quoad ultra he denies the pursuer's averments. No admission is made with reference to the letter founded on.
The Sheriff-substitute, after hearing parties, pronounced an interlocutor sustaining the fourth plea in law for the defender that the pursuer's averments of the defender's indebtedness can be competently proved only by the writ or oath of the defender, and allowing the pursuer, if so advised, to lodge in process within fourteen days the writ or writs on which he founds in probation. The Sheriff affirmed the interlocutor of the Sheriff-substitute, and an appeal has been taken to us. In my opinion the course followed by the Sheriff-substitute was wrong, and proof ought to have been allowed habili modo upon the whole case.
As was pointed out by Lord Kyllachy, who gave the leading opinion in the Whole Court case of Paterson v. PatersonUNK,13(at p. 172), loan is a real or consensual-real contract, which may be constituted without writing by interchange of consent followed by delivery of the thing lent. There is, however, a rule of evidence, founded not on statute but on custom, which requires writ in proof of loan. As put by Stair (IV. xliii. 4): "Our law and custom hath in many things refused the testimony of witnesses … where writ may and uses to be adhibited. … So we allow … no probation by witnesses of the borrowing of money." Erskine (IV. ii. 20) says: "The testimony of witnesses is rejected … where it [i.e. writing] is commonly used, as in the borrowing of money, cautionary obligations, or engagements of relief." The reason of the usage was, as is pointed out by Lord M'Laren, one of the judges inPaterson'sUNK case14 (at p. 191), that "a man shall not be charged with the receipt of money except on his own acknowledgment, because, if the rule were otherwise, he might be subjected to unfounded claims which it would be extremely difficult to disprove." As Lord Moncreiff (at p. 168) says in the same case: "The tendency of modern times is undoubtedly to relax, whether by legislation or judicial recognition of exceptions required by trade or custom, the strictness which formerly obtained in regard to proof." In this connexion a previous passage in his Lordship's...
To continue reading
Request your trial
-
The Royal Bank Of Scotland V. Mrs. Iris Malcolm
...means proof by the kind of evidence appropriate to each part of the case. (See Walkers on Evidence page 5). In Clark's Executrix v. Brown 1935 S.C. 110 Lord Murray said, at page 119, that in a case such as the one before the court, the proper course was to allow the parties a proof habili m......