Scottish Court of Session Decisions

Subject_1 COMPENSATION - RETENTION.
Subject_2 SECT. II.

What understood to be a Liquid Claim.

M'Bride
v.
The Lord Melvill

Date: 7 January 1680
Case No. No 15.

Compensation was proponed upon a factor's intromissions, to elide a debt due by him, now assigned. The compensation found liquid, if the factory bore an obligation to do diligence, otherwise not.

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The Countess of Leven being debtor by bond to Lauchlan Leslie in L. 7000, he assigns the same to James M' Bride, writer in Edinburgh, whereupon he pursues a declarator, that this was a just debt, and that he might affect the estate of Leven therewith by apprising or arrestment. The defender alleged compensation, because the pursuer's cedent was chamberlain to the Countess of Leven his debtor, and hath made no account, and therefore, by his office, he being obliged to do diligence for the rental of that estate, he is debtor therefor, either as intromitting, or who ought to have intromitted, which is offered to be proven by writ, viz. the factory granted by the Countess to Lauchlan, so that compensation against the cedent being relevant against the assignee, the same must be sustained against this pursuer, being instructed by writ prior to the assignation. The pursuer answered, 1mo, That the defender could not propone compensation upon the Countess's rents, because he hath no right thereto, and so, by proponing thereof, cannot liberate the factor. 2do, The compensation is not liquidate until the factor's intromission be proven, which must be instantly verified, though the debate were against the factor himself, much more when against his assignee. The defender replied, That compensation is equivalent to a discharge, and therefore may be proponed by any party who hath interest to exclude the debt compensed; for sums compensing each other, do, from the time of their concourse, extinguish both debts; so that if a creditor be insisting against an heir, it is competent to him to allege compensation, though upon moveable sums due to the defunct, which would belong to the executors, and not to the heir. To the second, The factory is in the cedent's own hand, which ought to be produced, and it will instantly verify and liquidate the compensation; for thereby it will appear, that the factor being liable for diligence, is not only liable for his intromission, but for his omission, according to the Countess' rental, of which one year will far exceed this sum, as is notourly known.

The Lords found the compensation competent to this defender, although he hath no right to the moveable estate of the Countess, in the same way as if the Countess had been discharged; and found the compensation upon the cedent's factory in writ relevant against the assignee, if the factory contained a salary, albeit it mentioned no obligement to do diligence, which is implied in the nature of a factory, unless the factory be restricted, that the factor shall be countable always for his intromission; in which case the Lords found the compensation not liquid, and instantly verified; but sustained the same, if the factory did either express an obligation to do diligence, or contained a salary without restriction; and ordained the pursuer to produce the factory, it being presumed to be in his cedent's hand. It was also alleged, That the factor or his cedent could not pursue his constituent or her representative, ante redditas rationes, in the same way as a tutor or curator, which the Lords sustained not, these being special privileges of pupils and minors against their tutors or curators only.

Fol. Dic. v. 1. p. 160. Stair, v. 2. p. 733.