Edward Hewit, surviving Partner of Hewit and Brockhurst v. David Elliot, George M'Crae, Simon Brown, John Auld, and James Ballantine, Trustees for the Creditors of Andrew Stevenson, Merchant Glasgow [1775] UKHL 2_Paton_381

UKHL
Edward Hewit, surviving Partner of Hewit and Brockhurst v. David Elliot, George M'Crae, Simon Brown, John Auld, and James Ballantine, Trustees for the Creditors of Andrew Stevenson, Merchant Glasgow
[1775] UKHL 2_Paton_381
Edward Hewit , surviving Partner of Hewit and Brockhurst , Appellant v. David Elliot, George M'Crae, Simon Brown, John Auld , and James Ballantine , Trustees for the Creditors of Andrew Stevenson , Merchant Glasgow, RespondentsHouse of Lords, 6th Dec. 1775 .Subject_ Bankruptcy — Retention — Admissibility of Witness — Interest — Tutoring .—Circumstances in which a party, having procured possession of bills in a legitimate manner, though sent for, and to be appropriated to a special purpose, was held entitled to retain these bills in payment pro tanto of his own account, against the creditors of the remitter of these bills: reversing the judgment of the Court of Session. Circumstances in which objection to examination of witness, on the ground of interest, not sustained. Also objection to witness, as having been tutored, and having perused the papers, &c., in the cause, repelled.

The appellant, and his deceased partner Brockhurst, carried

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Stephenson, at the time alluded to, had been in the practice, in order to support his credit in business, of drawing and redrawing bills on London: and, for these purposes, Dove and Reynolds, merchants, London, were their correspondents. This system of credit having received a shock, gave general alarm to all who had bills in the circle; and Stephenson, having bills in the circle, became apprehensive lest they should be returned. On advising with Brown and Auld, two of his correspondents, and learning that two of these bills had been returned, he despatched Jamieson (who was connected with Stephenson in trade) to London, with a parcel of bills, drawn on London, amounting to £1119, for the purpose, that if he found Dove and Reynolds in good condition, and able to go on, these bills might be handed to them, that they might accept, and be able to pay the bills in the circle. Jamieson had letters of recommendation to Hewit and Brockhurst from John Auld, and from Brown of the Ayr bank in Glasgow, which were intended to aid and assist Jamieson's mission. He had special written instructions from Stephenson as to the application of the money bills for £1119 sent with him. He was only to hand them over to them if he found Dove and Reynolds all right. If not, he was to retain them for him; but Hewit and Brockhurst, to whom he was introduced, were to direct him in this.Jamieson arrived in London on Friday evening, the 26th January. He called immediately at the appellant's house, and not finding him at home, left his two letters from Stephenson and Brown; but was informed that Dove and Reynolds had stopt payment, whereupon he wrote off that night to Stephenson, intimating the failure.The next night after Jamieson left for London, Stephenson, who, in the meantime, had received bad intelligence of Dove and Reynolds' affairs, wrote to Jamieson on 23d June, stating, “All the service you can do me is to retain every thing in your hand that you took up.” “I fear it is too late for all those things.”—“Retain every thing you can, without mentioning what you was to bring up.”

It was stated, that on the 24th June, Stephenson again

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“I wrote you last night, and have only now to beg that you will come away the moment you receive this, and bring back what you took with you, what you took entire.”

—“It is too late to profit by your good offices now.”

These letters did not arrive until 29th June. In the meantime, Jamieson, on calling next morning (27th June) after his arrival, on Hewit and Brockhurst, at their counting house, shewed the bills he had brought with him, amounting to £1119, and informed them of his instructions to have paid them to Dove and Reynolds had they been in good condition to go on and meet Stephenson's bills. Jamieson proposed to give the bills to Hewit and Brockhurst on Stephenson's account. The bills were received by them, and entered in their books on 27th June, and an advance of £200 given upon them.When Jamieson received Stephenson's letters on the 29th June, he called immediately on Hewit and Brockhurst to obtain, in terms of his instructions, delivery of these bills; but they refused to give delivery, and claimed retention of them in payment pro tanto of their account.On Stephenson's failure, action was raised by his trustee, after using arrestments, jurisdictionis fundandœ causa jurisdictionis fundandœ causa against Hewit, the only surviving partner of Hewit and Brockhurst, for repetition and payment, on the ground that the bills were sent for a special purpose, and that Jamieson had no power to use them in any other way. That by the bankruptcy of Dove and Reynolds, possession was at an end; and all he had to do was just to return with these bills, and therefore the defender had no right to retain them in compensation of his debt against Stephenson, but only a right to rank on the estate.Mar. 2, 1771.A proof was allowed and led of the circumstances attending the whole transaction. When it was offered to examine Jamieson as a witness, his admissibility was objected to by the appellant, on the ground of interest, because, if he had disobeyed his instructions, he was answerable for the consequences; and that he had given evidence by an ex parte affidavit on oath, which he would not gainsay without the pains of perjury; besides, he had volunteered in writing to a witness in London, endeavouring to bring him to join in his version of the story, which made his evidence exceptionable. The Court, however, of this date, “repelled the

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Feb. 17, 1775

The Court thereafter pronounced this interlocutor:—

“The Lords having resumed consideration of this cause, with the papers and proceedings therein, the testimony of the witnesses adduced, writs produced, and memorials hinc inde , and heard parties' procurators thereon, and advised the whole, they repel the defences, and find that the defenders, Messrs. Hewit and Brockhurst, are not entitled to retain the balance of the bills in question; but are bound to pay the same to the pursuer's trustees for Stephenson's creditors, and that they have right only to a part thereof, in proportion with the said creditors, and remit to the Lord Auchinleck, the Ordinary who pronounced the act, to proceed further in the cause, and to do as he shall see just.”
Against these two interlocutors the present appeal was brought to the House of Lords.Ersk. b. 3, tit. 4, § 20.Pleaded for the Appellant .—1st, Weighing the whole evidence in the cause,—the correspondence of parties,—the uniform account given of the transaction with Jamieson by the appellant,—his answers to the original interrogatories, supported by the written and parole evidence, it is clearly established that the bills were fairly and bona fide placed with Hewit and Brockhurst, not for the special purpose of acceptance, but lodged with and paid to them on account of Stephenson. This was demonstrated by the immediate advance of £200 upon them, and after giving Stephenson credit for the full amount of these bills, he owed them a balance on account of £147. They were delivered to the appellant, blank indorsed by Jamieson, and passed into the possession of Hewit and Brockhurst, like so many bank notes, duly and fairly obtained. Having therefore been fairly obtained on 27th June, without any third party having any jus quœsitum jus quœsitum in them, he was entitled to apply the balance of the bills on

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June 29.Pleaded for the Respondents .—Hewit knew well the object and purpose of Jamieson's mission to London. He knew that he came as a special messenger from Stephenson, with bills in his pocket for the purpose of supporting his credit

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After hearing counsel,

Lord Mansfield said:—

“That the point in question was merely, whether the appellant had a right to set off certain bills, remitted for another purpose, towards a debt due to himself, before the person remitting the same became a bankrupt, or had committed any act of bankruptcy; or whether, receiving the bills as a part of the general fund, he was now bound to throw them into the common stock, and be accountable to the assignees of the bankrupt, and come in of course as a common creditor. In my opinion, as no act of bankruptcy had been proved before the remitting of the bills, the appellant was entitled to set them off against the debt due to himself, and I therefore move that the interlocutor complained of be reversed.”
It was ordered and adjudged that the interlocutor of 2d March 1774 be affirmed, and the interlocutor of 17th February 1775 be reversed ; and that the appellant's defence be sustained.Counsel: For Appellant, Henry Dundas, Ja. Wallace. For Respondents, Al. Wedderburn, Gilb. Elliot.Unreported in Court of Session.