Scottish Court of Session Decisions

This was an action at the instance of Robertson Gladstone, Archibald Kelso, and others, against David Baird Lindsay, concluding for payment to the pursuers of the principal sum contained in a decree of the High Court of Judicature at Fort-William, in Bengal, in favour of the pursuers against the defender, of date 7th September 1865, with interest and taxed expenses.

It appeared that the defender while resident in in—dia was sued, along with other parties, by the present pursuers, for the debt which is the subject of the decree in question, along with another debt. Both debts were claimed as having been incurred to the firm of Gladstone, Wyllie & Company, of which the defender had been a partner along with the present pursuers. The defender, being desirous to leave India, executed, along with two sureties, a bond, styled a bail-bond, by which they bound themselves to pay to the plaintiffs in that suit, or in any other suit that might be brought against him by the same parties, relating to or arising out of the same matters, any sum which the Court might in such suit or suits adjudge to be payable by the defender, such payment to be made within one month after demand on his solicitors in these suits.

The alleged debt which is now in question related to advances from the funds of the firm to the Balgorah Coal Company. The defender having stated that he was the sole partner of that concern, the plaintiffs thought proper to withdraw that claim from the original suit, which was directed against other parties besides the defender, and to commence a new suit for it against him alone. He appeared in that suit, and filed an affidavit on 10th April 1865, in which he stated that three of the plaintiffs had commenced proceedings against him in the Court of Chancery in England for the taking of a partnership account. In respect of what was stated in that affidavit, he moved that the plaint in the cause should be taken off the file, on the ground that the Court had no jurisdiction, or on the ground of the dependence of the suit in Chancery; or, at all events, that pro-ceedings should be stayed until the further orders of the Court. Counsel having been heard upon this motion, it was refused, the plaintiffs undertaking within two months to stay the proceedings in Chancery. In these proceedings at Calcutta Messrs Abbot and Lattey acted as attorneys for the defender. On 5th June 1865 Vice-Chancellor Wood pronounced an order staying further proceedings in the Chancery suit until 5th February 1866. But this was done at the instance of the defendant, on the ground the an affidavit by the plaintiffs was insufficient, and in order that they might by that time lodge a sufficient affidavit. On 16th August 1865 the suit in Chancery was dismissed with costs, at the instance of the pursuers.

In these circumstances, the decree founded on was pronounced in the Court at Calcutta on 7th September 1865. The office copy, duly authenticated, bears that the cause came on on the day preceding and on that day for final disposal, in presence of counsel for the plaintiffs, and the defendant not appearing either in person or by counsel. It also bears the names of Messrs Abbot and Lattey as attorneys for the defendant.

This action was then raised.

The defender pleaded, inter alia, lis alibi pendens, in respect of a suit of accounting in Chancery instituted by him against the pursuers in January 1867; that the judgment could receive no effect, and the present action, so far as founded thereon, should be dismissed, in respect that it was irregularly and incompetently pronounced according to the law of England and of India—(1) Because the present pursuers failed to implement their judicial obligation to stay proceedings in the High Court of Chancery within the stipulated time; and (2) because, in any view, sufficient time had not elapsed since the dismissal of the pursuers' suit in Chancery; and that the defender, not being the pursuers' debtor on a fair settlement of the partnership accounts, but, on the contrary, being their creditor to a large amount, was not bound to make payment to the pursuers of the sum in the judgment.

The Lord Ordinary ( Barcaple) repelled the defences and decerned against the defender.

In a note, His Lordship, after a narrative of the facts as above, said:—“It does not appear to the Lord Ordinary that there is anything in the circumstances in which the decree was obtained that should lead this Court to refuse it effect, or to order proceedings with a view to its being further examined. It seems impossible to doubt that the defender had bound himself to submit to the jurisdiction of the Court at Calcutta in such a suit, if it should be brought. In point of fact he appeared in the suit, and submitted himself to the judgment of the Court, by lodging an affidavit, and moving that the plaint should be taken off the file, or proceedings in the suit stayed until further order of the Court. It is true that the motion was rested partly on the ground that the Court had no jurisdiction; but that contention, so far as appears from the affidavit in support of it, was based entirely on the fact that the plaintiffs had taken separate proceedings against him in the Court of Chancery in England, which involved the same matter. The other parts of the motion implied that, except on that ground, he did not dispute the jurisdiction.

“A separate objection taken to the decree is, that it was pronounced in absence of the defender, and when he had not the means of defending himself or being heard. Of course he could not take immediate direction of the proceedings in the suit which he had-consented should go on against him in India, and in which he had actually appeared by counsel and taken part. But if the Lord Ordinary is right in the view which he has taken of the defender's position, he was bound to take measures for defending himself, so as to enable the plaintiffs to get an effectual judgment against him if they should succeed in the suit. He cannot avail him-self of voluntary absence or ignorance of the pro-ceedings.

Page: 72↓

It is not disputed that Messrs Abbot and Lattey had acted for him in the suit at a previous stage. Hè had thus all the usual facilities which any litigant possesses for having his interests protected at every step in the suit. There is no allegation of any fraudulent or irregular proceeding, by which the coming on of the cause was kept from the knowledge of Messrs Abbot and Lattey. Their names appear in the office copy of the decree, on the assumption at least that they were attorneys for the defendant. If he purposely limited the instructions under which they had formerly acted for him, so as to prevent their attending to his interests at subsequent stages of the cause, that is a course for which he alone ought to be responsible. It must he assumed that if they had appeared, and stated any good ground for delay, or for further procedure before disposal of the cause, justice would, have been done in that matter.

“But the defender further maintains that, apart from the preceding objections, the judgment is so entirely contrary to justice that it ought not to receive effect. This contention is rested upon the Chancery suit, which had been brought to an end on 16th August 1865, three weeks before the date of the decree, and on the effect which had been given to the dependence of that suit in the order of the Court at Calculta of 5th June, refusing the defender's motion on the pursuers' undertaking to stay proceedings in the Chancery suit within two months. That was effectually done by getting the suit dismissed, though not within two months. Nothing had taken place in the interval in the Chancery suit to the disadvantage of the defender. In these circumstances the Lord Ordinary can see no reason to suppose that the Court was in any way misled as to the true position of the case, or that the judgment pronounced was contrary to justice.

“ A separate ground of defence is rested on the dependence of a second suit in Chancery for taking a partnership account between the same parties. It is at the instance of the defender against the pursuers, and was commenced in January 1867; the present action being brought in March following against the defender, who resides in Scotland. The defender pleads lis alibi pendens. In his bill originating the suit the defender, as plaintiff, undertakes to pay any balance that may, on taking the account, be found due to the defendants. The Lord Ordinary assumes that the proceedings are of such a kind as to enable the pursuers, as defendants in that suit, to bring forward all their claims against the defender as plaintiff, and to enforce a full accounting to the effect of getting decree for any balance that may be due to them.

“If in these circumstances the pursuers had, for the first time, commenced an action in this Court for a debt arising out of the transactions of the firm, there might have been much force in the plea of lis alibi. In that state of matters it would have been proper to ascertain the precise nature and effect of the Chancery proceedings. But the question arises very differently where the debt sued for in this Court has already been the subject of a suit and a judgment, though in a foreign Court. The Lord Ordinary must at present hold it to be a good judgment, to which this Court would give immediate effect except for the dependence of the suit in Chancery. It is only for the purpose of preventing injustice being done that the Court can refuse in the meantime to interfere. This is not a case in which there will be double proceedings for trying the same question here and in England; and the judgment of this Court will not, as regards the Court of Chancery, put the matter in any different position from that in which it already is in consequence of the Indian decree. The one judgment will be no more res judicata than the other. If there is any real ground of hardship it is, that by judgment here the defender may be forced now to pay the debt decerned for in India, while he is maintaining in the Court of Chancery that, in a full accounting, the pursuers are indebted to him. It is to be kept in view that he only took steps to bring on an accounting after the pursuers had obtained judgment against him for this particular debt. But the Lord Ordinary thinks it a more important consideration that the defender has a remedy in his power peculiarly suited to secure justice in the matter to both parties. If this action should be sisted to abide the result of the Chancery suit, and it should then appear that the whole debt decerned for is due, the consequences might be very injurious to the pursuers. But it is open to the defender to apply in the Court of Chancery, where he is prosecuting his suit, for an injunction against the pursuers putting the Calcutta decree in force, or prosecuting any action for that purpose. The Court of Chancery would be in a position to dispose of such an application with reference to the nature and effect of the proceedings depending there and their apparent merits, and also to consider whether, if granted, it should be in any way qualified for the security of the pursuers. The defender has not hitherto made any such application. But the pursuers have applied in the Court of Chancery for an order to stay proceedings until the sum decerned for by the Calcutta Court has been paid to them, or into Court. From the report of the judgment of the Lord Chancellor on that point, 11th March 1868, it appears that in refusing the order he specially founded upon the circumstance that the plaintiff, the present defender, has not asked to restrain proceedings against him in Scotland or elsewhere for recovering the money due under the decree; and his Lordship added, that if the plaintiff came asking indulgence of that kind, the Court would put him upon terms. Upon the whole matter, the Lord Ordinary thinks that to sist this action during the dependence of the Chancery suit would not be to aid, but to interfere, with the ordinary and proper course of justice.

“The defender's sixth and seventh pleas in law are to the effect that, on a fair settlement of the partnership accounts, he is not debtor to the pursuers, and that he is entitled to set off against the sums claimed by the pursuers such sums as may be due to him in connection with the partnership business. The pursuers have in the decree founded on a liquid ground of debt against the defender; and if any effect could be given to these pleas it would be by sisting the action until the result of the accounting in Chancery, which, for the reasons already stated, the Lord Ordinary is of opinion ought not to be done.”

The defender reclaimed.

Moncreiff, D.-F., and H. J. Moncreiff, for reclaimer.

Young and Mackay for respondents.

The following authorities were cited:- South-gate v. Montgomery, 9 Feb. 1857, 15 S. 507; Don, (per Lord Brougham) 5 Cl. and Finn. 20; Kent Com. 11, 292: Kames Prin. of Equity, 2365; Story Confl. of Laws, 606–8 (6th Ed.) Bank of Australasia, 16 Queen's Bench, 717; Shand's Pr. 200.

At advising—