Spencer v Hemmerde
| Jurisdiction | England & Wales |
| Judge | Viscount Cave,Lord Atkinson,Lord Sumner,Lord Wrenbury,. |
| Judgment Date | 28 July 1922 |
| Judgment citation (vLex) | [1922] UKHL J0728-3 |
| Date | 28 July 1922 |
| Court | House of Lords |
[1922] UKHL J0728-3
Viscount Cave.
Lord Atkinson.
Lord Sumner.
Lord Wrenbury.
Lord Carson.
House of Lords
After hearing Counsel, as well on Tuesday the 13th as Thursday the 15th, days of June last, upon the Petition and Appeal of Maurice Charles Spencer of Alan House, Alan Street, Kensington, in the County of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 13th of June 1921, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioner might have such other relief in the premises as to His Majesty the King in His Court of Parliament might seem meet; as also upon the printed Case of Edward George Hemmerde, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 13th day of June 1921, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of the Honourable Mr. Justice Bailhache, of the 18th day of March 1921, thereby set aside, be, and the same is hereby, Restored: And it is further Ordered, That the Respondent do pay, or cause to be paid, to the said Appellant the Costs incurred by him in the Court of Appeal, and also the Costs incurred by him in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the King's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
This is an appeal from an Order of the Court of Appeal in England reversing the judgment of Mr. Justice Bailhache.
The facts are not in dispute and may be shortly stated. In the year 1910 Mr. Joseph Benson (through whom the Appellant claims) lent to the Respondent, Mr. Hemmerde, a sum of 1,000 l.; and in a letter acknowledging the loan which was dated the 2nd March 1910 the Respondent undertook to repay it in two months and to pay interest at 7 per cent. per annum, and added:—
"It is extremely kind of you to assist me at this juncture by a transaction which is quite outside the ordinary rules of business security, and which I recognise to be merely a generous and timely effort to help me over a very unpleasant financial crisis."
Certain securities were deposited with Mr. Benson as security for the loan, but these were subsequently given up at the Respondent's request. No part of the principal or interest was in fact paid, Mr. Benson, to whom this advance appears to have caused some financial embarrassment, from time to time pressed for payment; and ultimately on the 4th November 1915 he wrote to the Respondent a letter in which he made formal application for payment of the 1,000 l. and interest and stated that he would not stay his hand any further and the matter would have to be settled without further delay. The writer added:—
"I confess I am greatly surprised that you have treated the matter so coolly, no letter or personal word. You will remember your coming to me in your time of great need, and at great personal inconvenience I helped you because I believed you would honourably fulfil your promise and repay me on an early date."
In answer to this urgent application the Respondent wrote to Mr. Benson a letter dated the 4th November in the following terms:—
"I think it is a pity you write me in such a tone. Have you the slightest idea what these times mean to professional men? I have not been to see you because I had absolutely nothing to tell you but what you must know already. I will look in and see you some day next week, but I cannot at present hold out the slightest hope of paying you the capital. I will tell you exactly how things stand when I see you."
This did not satisfy Mr. Benson, who on the 5th November wrote a further letter stating that a call would be useless and that unless he had some definite proposal from the Respondent he should ask his solicitor to take the matter in hand and to act promptly. The Respondent thereupon wrote the following letter, upon which this case appears to me to turn:—
I, Hare Court,
Temple, E.C.,
November 7th.
"My Dear Mr. Benson,
"It is not that I won't pay you, but that I can't do so. It is important that I should see you and explain the situation, and I shall therefore ring you up tomorrow to make an appointment.
"What I wrote was not that I saw no prospect at present of being able to repay the capital, but that I saw no prospect of being able to repay the capital at present. The condition of things at the Bar is such that the vast majority of us will be getting into debt rather than out of it.
"I have a good deal to talk to you about, and nothing can be gained by flying to solicitors.
"Yours truly,
"Edward G. Hemmerde."
Mr. Benson accordingly stayed his hand, and it was not until the 22nd June 1920 that the Appellant (the trustee under a deed of arrangement with creditors executed by Mr. Benson) issued his writ in this action, claiming payment of the principal and interest. The Respondent pleaded the Statute of Limitations (21 James I., cap. 16); and the Appellant in his reply relied on the above-mentioned two letters of the 4th and 7th November 1915 and on other letters which are not now material, as containing a sufficient acknowledgment to take the case out of the Statute. Mr. Justice Bailhache held the letters to be sufficient for that purpose, and gave judgment for the Appellant; but on appeal the Court of Appeal (Lords Justices Bankes and Atkin, Lord Justice Scrutton dissenting), purporting to follow their previous decision in Fettes v. Robertson (1921, 37 Times L.R., 581), reversed his decision and dismissed the action. Hence the present appeal.
My Lords, the law relating to matters of this kind is not in doubt. The statute (21 James I., cap. 16, section 3) enacted that "all actions of debt grounded upon any lending or contract without specialty … shall be commenced and sued … within six years next after the cause of such actions … and not after," and made no reference to any acknowledgment; but it was held in a series of cases that a promise by the debtor to pay the debt, if given within six years before action brought, was sufficient to create a new contract and so to take the case out of the operation of the statute, the existing debt being a sufficient consideration to support the promise. It was also held that a simple acknowledgment of the debt, without any express promise, was sufficient for the purpose, an acknowledgment implying a promise to pay. Some of the earlier cases went so far as to decide that an acknowledgment was sufficient though coupled with a promise to pay at some future time which had not arrived or upon some condition that had not been performed, or even with an absolute refusal to pay; but this was set right by the decision of the Court of King's Bench in Tanner v. Smart (1827, 6 B. & C. 603), where Lord Tenterden, in giving the judgment of the Court, said:
"Upon a general acknowledgment where nothing is said to prevent it a general promise to pay ought to be implied; but where the party guards his acknowledgment and accompanies it with an expressed declaration to prevent any such implication, why does not the rule ' expressum facit cessare tacitum' apply?"
No doubt the doctrine so established was originally judge-made law; but it has stood unchallenged for nearly a century, and indeed it has received statutory recognition. For the statute commonly called Lord Tenterden's Act (9 Geo. IV., cap. 14), after referring to the Statutes of Limitation, provides that
"In actions of debt or upon the case grounded upon any simple contract no acknowledgment or promise by words only shall be deemed sufficient evidence of a new or continuing contract whereby to take any case out of the operation of the said enactments or either of them or to deprive any party of the benefit thereof unless such acknowledgment or promise shall be made or contained by or in some writing to be signed by the party chargeable thereby."
This enactment refers to an "acknowledgment or promise" as if either would be sufficient to take a case out of the Statute. But the words of the Act are negative only, and I think it clear that the acknowledgment there referred to must be an acknowledgment which but for this Act would have been sufficient to take the case out of the statute of James, that is to say, an acknowledgment implying a promise to pay; and it has always been so held.
Since the case of Tanner v. Smart the law as there laid down has been uniformly accepted, and it must be held to be settled law (1) that a written promise to pay a debt given within six years before action is sufficient to take the case out of the operation of the statute of James I.; (2) that such a promise is implied in a simple acknowledgment of the debt; but (3) that where an acknowledgment is coupled with other expressions, such as a promise to pay at a future time or on a condition or an absolute refusal to pay, it is for the Court to say whether those other expressions are sufficient to qualify or negative the implied promise to pay. The decisions upon the Act are very numerous; but in every one of them the law has been assumed to be as above stated and the decision has turned upon the meaning of the particular words used in the case. It is therefore unnecessary to refer to the authorities in detail; but some statements of the principle by...
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