Scottish Court of Session Decisions

By the first schedule of the Stamp Act 1891 (54 and 55 Vict. cap. 39) there are charged the following stamp duties:—“Mortgage, bond, debenture, covenant (except a marketable security otherwise specially charged with duty), and warrant of attorney to confess and enter up judgment—(1) Being the only or principal or primary security (other than an equitable mortgage) for the payment or repayment of money.……‘Exceeding £300. For every £100, and also for any fractional part of £100 of the amount secured—2s. 6d. (2) Being a collateral or auxiliary or additional or substituted security (other than an equitable mortgage), or by way of further assurance for the above-mentioned purpose, where the principal or primary security is duly stamped: For every £100, and also for any fractional part of £100 of the amount secured—6d. (3) Being an equitable mortgage:—For every £100, and any fractional part of £100 of the amount secured—1s. (4) Transfer, assignment, disposition, or assignation of any mortgage, bond, debenture, or covenant (except a marketable security), or of any money or stock secured by any such instrument, or by any warrant of attorney to enter up judgment, or by any judgment:—For every £100, and also for any fractional part of £100, of the amount transferred, assigned, or disponed, exclusive of interest which is not in arrear—6d. And also where any further money is added to the money already secured—the same duty as a principal security for such further money. (5) Reconveyance, release, discharge, surrender, re-surrender, warrant to vacate, or renunciation of any such security as aforesaid, or of the benefit thereof, or of the money thereby secured: For every £100, and also for any fractional part of £100, of the total amount or value of the money at any time secured—6d.’ ”

By bond and disposition in security in common form, dated 5th and recorded 7th June 1877, Robert Cruickshank, sometime residing in Glasgow, then of the English Baking Company, South Portland Street, Glasgow, and residing in Lenzie, granted him to have borrowed and received the sum of £5000 from John Blackwood Green-shields and others, the surviving trustees and executors of John Greenshields, sometime of Kerse, in the parish of Lesmahagow, and bound himself and his representatives to repay the said sum to the lenders. In security of his personal obligations he disponed in security to the lenders the heritable subjects described in the discharge hereinafter quoted. The said bond and disposition was impressed with a stamp of £6, 5s., being at the rate of 2s. 6d. per £100 of said sum of £5000. The said Robert Cruickshank afterwards sold said heritable subjects to William M'Kimmie, flesher, Glasgow, now deceased, under burden of the said bond and disposition in security. In May 1887 the said William M'Kimmie repaid to the suryiving trustees and executors of the said John Greenshields the sum of £2000 to account of said loan of £5000, and he received from them a partial discharge dated 5th, 7th, and 9th, and recorded 18th, all days of May 1887, whereby, in consideration of the said sum of £2000 then paid to them, they discharged the said bond and disposition in security for £5000 to the extent of the principal sum of £2000, interest due thereon, and penalties corresponding thereto, and declared the security-subjects to be redeemed and disburdened to the extent foresaid. The said partial discharge was impressed with a stamp of 10s. In May 1895 the trustees of the said William M'Kimmie repaid the surviving trustees and executors of the said John Greenshields the balance of £3000 secured by the said bond and disposition in security; and a question arose regarding the amount of stamp-duty chargeable on the discharge for £3000.

The following are the terms of the instrument so far as relevant to the question at issue:—“We, … the surviving trustees and executors of the deceased John Greenshields, … in consideration of the sum of £3000 sterling, now paid to us as trustee foresaid by … the trustees of the now deceased William M'Kimmie, … being the balance remaining undischarged of the principal sum contained in the bond and disposition in security after mentioned, do hereby discharge (but only to the extent of the said sum of £3000 paid as aforesaid) a bond and disposition in security … for the sum of £5000 sterling granted by … the then trustees of the said deceased John Greenshields, and all interest due thereon; and we, as trustees foresaid, declare to be redeemed and disburdened thereof, and of the infeftment following thereon, but only to the extent foresaid, All and whole that area of building ground … specified in the said bond and disposition in security.”…

On 8th June 1895 the trustees presented this instrument to the Commissioners of Inland Revenue, and desired to have their opinion as to the stamp-duty with which it was chargeable. The Commissioners were of opinion that the instrument was chargeable with the ad valorem duty applicable to the discharge of a mortgage for the full sum of £5000, being “the total amount or value of the money at any time secured thereby,” viz., £1, 5s. They accordingly assessed the duty at £1, 5s. on the instrument, whereupon the trustees paid this amount, and had the instrument duly stamped, but

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being dissatisfied with the determination of the Commissioners, called upon them to state a case for the opinion of the Court.

The appellants maintained that the bond having been discharged to the extent of £2000 in 1887, and discharge duty at the rate of 6d. per £100 having then been paid on that sum, duty was now chargeable only on the balance of £3000, which was the whole extent to which the bond was discharged and required to be discharged by this instrument. They submitted accordingly that it was liable to be charged with 15s. only of ad valorem, duty, and not £1, 5s.

The question submitted for the opinion of the Court was—“Whether the said instrument, in the circumstances above set forth, is liable to be assessed and charged with ad valorem duty of £1, 5s., or whether it is chargeable with ad valorem duty of 15s. only?”

Argued for appellants—By the terms of the discharge it was only a partial one, to the extent of £3000, and not general, and it was accordingly liable to duty only on that amount. In creating a bond, an addition might be made to the money already secured, and by the fourth sub-section of the schedule, duty must be paid only on that addition, and, conversely, the fifth subsection should apply only to the amount actually discharged. The principle of the Stamp Act was not to make a sliding scale, but a uniform duty applicable to the amount actually dealt with. It would be a very dangerous doctrine for the Crown to maintain that partial discharges were not liable to this duty.

Argued for respondents—There was no reference in the schedule to a partial discharge, and the fifth sub-section applied only to a total discharge, as the words used, “total amount,” showed. The partial discharge had only been liable to a deed stamp of 10s., as falling under the denomination of “any deed whatsoever not described in this schedule.” Thus, where there was a transaction involving several deeds, the ad valorem duty stamp would be exacted on the principal one, and the 10s. stamp on each of the others.

At advising—