Malcolm v Scott and Others
| Jurisdiction | England & Wales |
| Judgment Date | 06 December 1849 |
| Date | 06 December 1849 |
| Court | High Court of Chancery |
English Reports Citation: 42 E.R. 171
HIGH COURT OF CHANCERY
[29] malcolm v. scott. Dec. 3, 4, 5, 6, 1849; Nov. 19, 20, 21, 25, 1850. A mercantile firm at Calcutta, by a letter dated the 16th January 1841, directed their London correspondents to hold a sum of money payable on the 19th November following out of remittances and consignments on the general account at the disposal of a creditor of the Calcutta firm in Liverpool. The Calcutta firm at the same time acquainted the creditor of the directions which they had given. The London firm informed the creditor that they had received and registered the order, and after stating that they were in advance for the Calcutta firm, and declining to accept 172 MALCOLM V. SCOTT 3 MAC. te a. 30. bills for any part of the amount, said, that if remittances should come forward to enable them to meet the wishes of the Calcutta firm, they would lose no time in advising the creditor. The London firm also, in acknowledging to the Calcutta firm the receipt of the order, said that the state of the accounts did not then warrant them in meeting the requisition, but they would meet it, if in a position to do so, before November. Held, by the Lord Chancellor Cottenham, on a bill filed by the creditor against the London firm, that the correspondence raised no case of equitable assignment, and that the only question was whether the Defendants, the London firm, had entered into a legal contract with the Plaintiff, and that the equity of the Plaintiff was consequential on the establishment of such legal contract. His Lordship, considering that the effect of the correspondence might depend on mercantile usage, directed the cause to stand over, with liberty for the Plaintiff to bring such action as he might be advised. An action was brought by the Plaintiff accordingly, the result of which was that it was finally determined that the Plaintiff had no legal cause of action. On the cause coming on again before the Lord Chancellor Truro, his Lordship expressed his concurrence in the judgment of Lord Cottenham, and held further that the result of the proceedings at law left no equity in the Plaintiff to be administered, and that the bill ought to be dismissed. Although from an irregularity in the form of the decree, which did not in terms reverse the judgment of the Vice-Chancellor, the further hearing of the cause took place before the Lord Chancellor, yet, according to the practice of the Court, the cause was properly returnable to the Court below, and the costs of the further hearing were therefore dealt with as if the same had taken place before the Vice-Chancellor. The two questions involved in this case, which was an appeal from a decree of the Vice-Chancellor Wigram, were, first, Whether upon the construction of a certain letter of the Defendants they had undertaken to pay to the Plaintiff the produce of any remittances or consignments from India, after the satisfaction of their own demands against the consignor up to a stated period; and secondly, Whether that letter and two other letters from the consignor to the Plaintiff and Defendants respectively operated as an equitable assignment on the proceeds of all consignments remitted [30] by the consignor beyond the amount necessary to satisfy dependencies existing at the date of these two last letters. It appeared that Adam, Scott & Co. were merchants at Calcutta, and, at the time-of the transaction in question, considerably indebted to the Plaintiff George Malcolm, carrying on business at Liverpool under the name of George Malcolm & Co. The Defendants, the firm of Scott, Bell & Co. in London, were the correspondents of Adam, Scott & Co. The correspondence immediately referable to the questions in this suit was comprised in the following letters. On the 16th January 1841 the Calcutta house wrote to the Defendants as follows :- "Calcutta, 16th Jan. 1841.-Dear Sirs,-Ere this reaches we hope you will have-realised a large portion of our consignments and remittances viA Colombo, China and Mauritius, to enable you to dispose of the following sums from our general account with you. Although we are pretty confident you will be in possession of funds, we are not certain, and do not in consequence grant drafts. We are desirous of remitting Cs. Rs. 100,000 to Mr. George Malcolm, as if by a draft to-day at ten months' date, at exchange 2s. ld. per Cs. Re. 10,625, which would fall due in London, 19tb November next; Cs. Rs. 50,000 to you and Mr. W. Scott for his loan to the writer, dated, as above, at exchange 2s. l|d. 5312, 10s., together 15,937, 10s. Should you be in possession of funds, we have to request the favour of your holding these sums at Mr. Malcolm's and your own disposal respectively, under the discount of the Bank of England rate. We shall know to a certainty, in a short time, whether funds sufficient will be transmitted to you to meet these sums on or before the 19th of No-[31]-vember next, and should it appear to us that there will not be enough, we shall send you a remittance from this to go to credit of your general account.-adam, scott & Co." On the same day the Calcutta firm also wrote the following letter to the Plaintiff: -"Calcutta, 16th Jan. 1841.-My dear Sir,-Before we can make up our accounts 3 MAC. * 0,0. MALCOLM V. SCOTT 173 here, we must be put in possession of all the accounts from you relative to the transactions of the Calcutta firm up to the 30th April last, and I am unable, in conse-quence^ to say how our cash account will stand, so as to enable me to regulate the remittance of your stock and that standing in my own name; but being anxious to make some funds available to you, I have written officially to Messrs. Scott, Bell & Co. to hold at your disposal, on or before the 19th of November next, 10,625, being the equivalent of Rs. 100,000, exchange 2s. l^d. Our friends will hold this amount at your disposal under discount immediately after the receipt of this, or as soon as they are in possession of funds.-J. S. B. scott." In consequence of the letter written by the Calcutta house to the Defendants, the Defendants, on the 12th March 1841, wrote the following letter to the Plaintiff:- "London, 12th March 1841.-We beg to advise you that, by the overland letters from India received yesterday, we are requested by Messrs. Adam, Scott & Co. to account to you for the equivalent of Cs. Rs. 100,000 at 2s. IJd. per rupee, ten months after the date of their letter (16th January last), or to hold that amount at your disposal under discount at the Bank of England rates, if convenient to us, and provided we are in funds from their consignments and remittances, wA Colombo, China, and the [32] Mauritius. At the present time we are considerably in cash advance for the firm, and the consignments and remittances hitherto advised will, we think, fall short of the engagements we are under on their account. We have, however, registered the above, and should remittances or consignments come forward to enable us to meet their wishes, we shall lose no time in advising you.-Meanwhile, &c., scott, bell & Co." On the 12th March 1841 the Plaintiff wrote to the Defendants a letter, of which the following was the only part material to the present questions:-". . . Messrs. Adam, Scott & Co. inform us, in their letter of the 16th January last, received this morning by the overland mail, that they had written to you to hold at our disposal on or before the 19th November next, 10,625, and that you would hold this amount at our disposal under discount immediately after receipt of their letter, or as soon as you were in possession of funds. Would you have the goodness to let us know whether you will allow us to draw on you for the whole amount due on the above date, or for a part at a shorter date.-george malcolm & Co." On the 13th March 1841 the Plaintiff wrote to the Defendants, inclosing the letter of the 16th January from the Calcutta house to him, in the following terms :- " Liverpool, 13th March 1841.-I am favoured with your letter of yesterday. It may be proper to inform you that the money which Messrs. Adam, Scott & Co. request you to hold at my disposal, namely, Cs. Rs. 100,000 or 10,625 cash, 19th November next, is a portion of my own funds, which I expected to have received direct. In ordering the payment through you, they will, of course, make due provision for it, and although they could not know [33] how much of the amount might be realised by you at dates prior to the 19th November, there is no doubt expressed as to your being, ere that time, in funds for the whole. There is evidently no reason to suppose anything else than that ample remittances are on the way, or that they will be received in good time; but in order to prevent any uncertainty or mistake on this point, Messrs. Adam, Scott & Co.'s attention may be drawn to the subject by letters by next overland mail, so that there may be a timely correction of any oversight or miscalculation on their part. The enclosed letter from J. T. B. Scott (which please return), will shew that he intended to make the money available to me, and, indeed, he could not but know that it must be both inconvenient and disadvantageous to me to be deprived of the use of so considerable a sum for eight months longer. Should you be disposed to give effect to his views and arrangements by granting acceptances due 19th November, as proposed by G. Malcolm & Co.'s letter of yesterday, they will engage to make due refund of any part of the money short remitted from Calcutta; but I have no apprehension of any such short remittance.-george malcolm." On the 14th March 1841 the Defendants sent the following letter to the Calcutta house:-"London, 14th March 1841.-Dear Sirs,-Acknowledging the receipt of various letters, and, amongst others, the following, 16th January, requesting us to account to Mr. Malcolm for the equivalent of 100,000 rupees at 2s. l^d., 10,625, ten months from the date of your...
To continue reading
Request your trial