North of Scotland Bank v Inland Revenue
| Jurisdiction | Scotland |
| Judgment Date | 03 December 1930 |
| Docket Number | No. 18. |
| Date | 03 December 1930 |
| Court | Court of Session (Inner House - First Division) |
1ST DIVISION.
Revenue—Stamp duties—Documents liable to stamp duty—Bank guarantee—Whether assessable as "bond" or as "agreement"—Stamp Act, 1891 (54 and 55 Vict. cap. 39), First Schedule.
By instrument of guarantee addressed to a bank, the granter guaranteed to the bank payment to the extent of £3000 of all sums for which a third party was, or might become, liable to the bank. It had been the practice of the Inland Revenue authorities to treat such instruments for the purposes of stamp duty as "agreements," and, as such, liable to a duty of 6d. under the First Schedule to the Stamp Act, 1891 ; but they now maintained that the instrument was a "bond" for the payment of £3000, and, as such, liable to an ad valorem duty under that Schedule.
Held (dub. Lord Sands) that the instrument of guarantee was an "agreement" within the meaning of the Schedule, and, accordingly, was liable to a duty of 6d. only.
On 27th June 1930 the North of Scotland Bank, Limited, Aberdeen, by their law agents, presented to the Commissioners of Inland Revenue a bank guarantee instrument, and required the Commissioners, in virtue of section 12 of the Stamp Act, 1891,1 to express their opinion as to the amount of stamp duty with which the instrument was chargeable. The Commissioners expressed the opinion that the instrument was a bond, and, as such, liable to mortgage duty amounting to £3, 15s. under the First Schedule to the Stamp Act, 1891.2 At the request of the Bank, they stated a case for appeal to the Court of Session as the Court of Exchequer in Scotland.
The case set forth, inter alia, that the instrument bore an impressed stamp denoting the sum of 6d., and was in these terms:—
"To the North of Scotland Bank, Limited.
"Gentlemen.—I, James Duffus, doctor of medicine (retired) and farmer, Auchcairnie, Fordoun, hereby guarantee you payment with interest of all sums for which James Logie Lyall Duffus, farmer, presently residing at The Dunes, Saunton, Braunton, Devonshire, and about to enter the farm of Brightly, Barton and Southcott, parish of Chittlehampton, Devonshire, is or may become liable to you, but providing that the amount which I am bound to pay under this guarantee shall not exceed the sum of three thousand pounds sterling with interest from the date or dates at which the said James Logie Lyall Duffus has become or shall become indebted to you; and I agree that you shall be entitled to require from me, whenever you think fit, a payment or payments to account of my liability for such sum or sums as you may fix; and I further agree (1) that you may at any time or times at your discretion grant to the said James Logie Lyall Duffus or to any co-obligants with or cautioners or sureties for him, time or other indulgence, and compound with them or any of them, all without consulting me and without discharging or affecting my liability; (2) that this guarantee is in addition and without prejudice to any other securities or remedies which you now or may hereafter hold for all or any of
the debts or obligations of the said James Logie Lyall Duffus; and (3) that I shall not be entitled to demand from you an assignation of any part of your claim against the said James Logie Lyall Duffus nor to rank on his estate in respect of any payment or payments made by me, nor to have the benefit of any securities such as aforesaid until your whole claims against him are satisfied. Further, it is agreed that this guarantee shall be a continuing guarantee, and shall remain in force notwithstanding my death until recalled in writing by me, or my heirs and representatives, and shall apply to all sums for which the said James Logie Lyall Duffus shall become indebted to you prior to such recall, in witness whereof these presents are subscribed by me at Auchcairnie, aforesaid, the fifth day of March in the year nineteen hundred and twenty-five, before these witnesses, Alexander Whyte Low and Alexander Hendry, junior, both clerks to the said bank at their Auchinblae branch.
"Alex. W. Low, witness."
"A. Hendry, jr., witn...
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