Scottish Court of Session Decisions

Subject_1 INDEFINITE PAYMENT.

Forbes
v.
Innes

Date: 9 November 1739
Case No. No 10.

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We have receded much from the civil law in the matter of indefinite payment; with us it has been understood to be applied to the debt worst secured, and to the debt not bearing annualrent, to which, as the durior sors, it was applied by the civil law; nay, we have now gone so far, as instead of the rule of the civil law, that electio was debitoris, we have gone into the direct contrary, that electio is creditoris; and accordingly it was in this case found, “That the indefinite payments were to be imputed as the creditor thought fit.”

The like was found, November 7. 1742, the Creditors of Martin contra Paterson.

Fol. Dic. v 3. p. 314. Kilkerran, (Indefinite Payment.) No 1. p. 284. *** C. Home reports the same case:

Patrick Crawfurd being debtor to Robert Gordon, by a promissory note, he indorsed the same to Daniel Forbes; and Alexander Innes being creditor to Robert Gordon, arrested in Mr Crawfurd's hands the money due by him to Robert Gordon on the promissory note; whereupon a competition ensued betwixt the indorsee and arrester, in which, upon an allegeance that Innes's debt was extinguished by several payments made to him by Robert Gordon, Innes compeared, and acknowledged the payments, but contended, That the debt acclaimed by him was not thereby extinguished, since he had applied these payments to a debt due by Sir John Gordon of Embo to him; for payment of which debt Robert Gordon also stood bound, conform to a letter addressed to Mr Innes, of the following tenor:

“You’ll sist diligence against my brother, and I, by these presents, become bound to you to see the utmost shilling (of his bill) paid, if you signify the same to me by a letter in the course of the post,”

&c. In consequence of this letter, Mr Innes discharged the proceeding in diligence against Sir John, and acquainted Robert Gordon that he had done so, These being the facts, the question betwixt the parties was shortly, Whether Mr Innes could apply and impute the indefinite payments made by Robert Gordon, to the extinction of Sir John Gordon's debt in the first place, without giving any credit to Robert Gordon for what he was owing on his own account.

For Innes it was contended, That his party had no right to quarrel the application of the payments; for he had no title to the promissory note in question, in regard the indorsation in his favours appears to have been blank, and his name filled up with his own hand; so that the indorsation thereto fell under the act anent blank writs. And with respect to the indefinite payments, it was observed, That there was no express constitution relating thereto; the matter rested upon natural equity; and that there it was put by the Roman law allenarly, which did not expressly ordain how indefinite payments were to be applied, but laid down this rule of natural equity, that the application should be in such manner as was least to the prejudice of either party; and here it would be manifestly to the prejudice of the creditor, to apply all the payments in the way contended for by Mr Forbes to elude the effect of Mr Innes's diligence. See the first four laws, D. De solut. In the next place, the rules touching indefinite payments do not at all apply to this case; for that no payment can be condescended on but what was directly applied, and a receipt given for it, declaring that the same was imputed to accompt. And here it fell to be taken notice of, that Robert Gordon's letter could not be interpreted, as if he had undertaken as cautioner for his brother, Sir John, to be liable in case of his not paying; the contrary appears, for that, in the same letter wherein he undertakes the debt, he mentions his intention of making immediate payment, and that he was to pay Sir John's debt out of a cargo of corn which he was then sending to London, the proceeds of which having failed, he was in use thereafter of impressing funds into Mr Innes's hands, which funds Robert considered as coming in place of the proceeds of corn which had failed; so that he looked on himself as in the course of paying his brother's debt as well as his own.

On the other hand, it was argued for Daniel Forbes, That the obligation in the missive letter was only conditional, and afforded no more at best but a subsidiary action against Robert Gordon, in the event that Mr Innes did not recover his payment from Sir John, since it could not be pretended that the obligation was a constitution of Sir John's debt against Robert; and therefore Mr Innes could not post these payments regularly to the credit of a debt not due by him, or constituted against him. 2do, Even supposing the obligation was binding, nevertheless the application ought to have been made to the extinction of Robert's proper debt; 1st, Because the payment being indefinite and to account, and neither party having expressed themselves at the time of the payment, how the same should be applied, the law rules the application, and imputes it rather to the extinction of a debt owing proprio nomine, whereof the term of payment was come, than for what was owing alieno nomine. And as in this case Mr Innes non statum dixit when he received the indefinite payments, but only posted them in general to account, the imputation ought to be made to the extinction of that debt, ex qua tanquam solvebat ad solvendum compelli poterat. See Voet. tit. De solu. et liber. § 16.; 1.1. §. 2. D. h. t.; 1. 1. C. h. t. Ant. Fab. Cod. lib. 8. tit. 30. Dis. 31. And Carps. defin. in forens. part 2. const. 29. defin. 17. Juris c. Holl. part 3. vol. 1. consil. 145. quest. ult.

The Lords found, That the imputation of the payments made both before and after the arrestments, must be to Sir John Gordon's debt, and not to the debt on which the arrestment was used.

C. Home, No 133. p. 226.