GENERAL DISCHARGE. of composition was accepted, and the creditors, in June 1844, whilst the bill was still current, executed a discharge of all debts, claims, demands, and sums of money due to them by the said A. B., reserving only our respective claims against the said A. B. for payment of the composition bills, and no more, and our legal rights in the event of the said composition bills not being retired when due.' The British Linen Company concurred in this discharge, claiming and receiving the composition on several debts, but making no claim in respect of the £1500 bill. Thereafter, the drawer of the bill became bankrupt, and the British Linen Company claimed from the joint-acceptor before referred to, and in whose favour the discharge above quoted had been granted, the £1500, or at least the corresponding composition. But the Court held the general discharge to cover this bill-debt, and extinguish it, as far as said acceptor was concerned. They further held, that as the bank did not bring their claim for the bill-debt at the time when the joint-acceptor was making the general arrangement of his affairs, and adjusting his offer of composition, they were not entitled afterwards to claim from him either payment in full, or the composition. The following passage from a note by Lord Ivory, Ordinary, is very instructive as to the principles regulating this decision. Speaking of general arrangements between insolvent debtors and their creditors, his Lordship says,-- Transactions of this kind are not so much mere bipartite contracts, between the debtor and each of his individual creditors considered separately, as tripartite 'contracts, between, 1st, the common debtor; 2d, the general body of his creditors in their relation towards him, as the party receiving from all 'an universal discharge; and 3d, the same body of creditors as contracting inter se, and with reference to their mutual relations towards each other, 'for the purpose of securing a perfect fairness and equality of position, 'without favour or preference of any kind, whether as regards the common debtor or his estate. Of course, this state of matters is conclusive as 'to the absolute impossibility of allowing any one or more of the creditors to reserve a particular portion of their debts undischarged, while all the ' rest are discharging their claims absolutely and universally. For every 'such reservation would necessarily involve both inequality and preference.' Even a discharge wholly general, however, is subject to modification in its operation, in special circumstances. Thus a general discharge is not to be extended to debts of an uncommon nature, which are presumed not to have fallen under the granter's notice; for example, to obligations of relief from cautionary engagements, not yet paid to the creditor.1 In M'Taggart's case, the cautioner had received, unico contextu with his granting the general discharge, a disposition in security of whatever sums of money he might advance and pay in consequence of any cautionary obligations, letters of guarantee, or other such obligations 1 Campbell, 23d Jan. 1678; Oliphant, March 1682; Wood, 12th Dec. 1695, all M. 5035; M Taggart, 24th Nov. 1830, 4 Wil. & Sh. 361; reversing the judgment of the Court of Session, 28th Feb. 1828, 6 Sh. 641. granted, or that might be granted. The Court of Session sustained the discharge, as covering even the claims to which the said disposition in security applied, but the House of Lords reversed. The discharge, however, ought to have expressly excepted these claims. A general discharge will not cover even claims of an ordinary Debts not in nature, if they are such as the granter cannot be presumed to have had VIEW. in view when he executed the deed.1 A general discharge by a wife, arising by acceptance of a bond of provision from her husband, of all she can ask or claim through her husband's death, does not extend to her mournings as a widow, which are part of the husband's funeral expenses, nor to her aliment to the next term after her husband's death.2 Neither will a general discharge include obligations of warrandice not yet incurred, nor an obligation to perform a special fact. Hence a general discharge of all debts and claims was found not to comprehend an obligation to purchase an apprising. Nor does it comprehend debts due by the grantee, which the granter had assigned to another previously to the discharge, although the assignation had not been completed by intimation, unless it be proven that payment or satisfaction was truly made to the granter of the discharge for the sum assigned. In neither of the cases noted, however, was payment of the bond assigned alleged; and the cases are to be contrasted with a case where a general discharge, bearing receipt of complete payment of all bonds, tickets, accounts, nolts' prices or others, preceding the date thereof, was held to include a bond for the price of fourteen oxen, although the bond had been previously assigned, the assignation not having been intimated. In this last case, the assignation was granted to the original creditor's son; but the decision appears to have turned on the evidence which the discharge gave of actual payment by the debtor; not on any ground of fraud and collusion between the father and son. In general, when a party has discharged another of all claims, on payment of a sum of money, it is not competent to open up the transaction, on facts and circumstances of which he was then aware, or on vague allegations of fraud and concealment. But there are circumstances in which a discharge, though acknowledging payment of a sum of money, and granted in general and comprehensive terms, may be opened up, or passed over. In a case where the discharge proceeded on the narrative of a settlement by composition, and stated that composition bills were granted, the execution of the deed in these terms was found no bar to a claim for the composition, when it was admitted that the bills had not been granted, and the composition not paid." A party who had right to an annuity, clear of legacy-duty, granted receipts for a series of payments 1 Moon's Trustees, 28th June 1836, 14 Sh. 1026. 2 Rennie, 16th May 1800, M. App. Presumption, No. 4. 3 Dalgarno, 19th November 1680, M. 5030. 4 Blair, 3d Feb. 1671, M. 940; Lady 5 Alexander, 24th Nov. 1713, M. 5041. 6 7 Glass, 12th May 1825, 4 Sh. 1; Thom- son, thereof, under deduction of the duty. It was held that he was still entitled to payment of the sums deducted.1 And a much stronger case of exception to the general rule occurred2 where a party had, upon a full and distinct narrative of a certain obligation in her favour, and after acknowledging the receipt of a specific payment, in full satisfaction of all sums due or claim competent by virtue of the obligation (in so far as prior to the date of the discharge), discharged her debtor of the specific sum, and of all sums due or claim competent accordingly; and of the deed containing the obligation, so far as relating to sums received prior to the date of the discharge, reserving claims for sums to be thereafter received. This discharge had proceeded upon a special statement of claim, which was made up under material error, inasmuch as it stated to the credit of the party the one-half only of a succession, where she had right to the whole. There was and could be no dispute as to the fact of an error having arisen. Neither had there been any dispute as to legal rights, nor any transaction or compromise as of a questionable claim. It was a case of simple error arising from ignorance of rights. And the case turned upon the effect of the words of the discharge. Had the sum in the special statement simply been paid, and no discharge taken, or had the discharge been simply of that sum, without the addition of the general words above quoted, the case would have been clear, the special sum only would have been discharged. But the deed in its terms discharged not only the special sum, but also all sums due and claim competent in virtue of the obligation, etc. The case was one of great difficulty, especially in consequence of the views stated in the House of Lords in the cases of Wilson and Dixon, both formerly referred to, as to the rule that repetition of money, overpaid in error, can only be allowed if the error was in fact. But here there was no overpayment sought back. The case was one of underpayment, and of discharge granted sine causâ, and where the understanding and intention of the parties was clear. The Court therefore refused to carry the principle laid down by the House of Lords, as to overpayments made in error in point of law, so far as by mere parity of reason or analogy to give to the words of a discharge the same effect, both as to money paid, and as to money not paid. They accordingly reduced the discharge, so far as granted sine causá, and in ignorance of the parties' legal rights. When a party has once admitted that an acknowledgment of full payment is contrary to the fact, and that he did not pay in full on receiving it, the onus lies on him to show that he afterwards paid the balance. But, where a written receipt has been granted, the allegation that the money nevertheless is still due can be proved only by the writ or oath of the party in whose favour the receipt has been granted.* A 3 1 Beaton, 8th Feb. 1853, 15 D. 373. 2 Dickson, 17th Feb. 1854, 16 D. 586. 3 Magistrates of Nairn, 2d Feb. 1830, 8 Sh. 432. 4 Gordon, 11th June 1833, 11 Sh. 696. See also, in reference to this point, Swan, 13th Dec. 1836, 15 Sh. 251. similar decision as to the legal mode of proof was pronounced in reference to markings on a bill, by the creditor, of certain payments as made to account and in full thereof. These, it was found, he could not contradict by parole.1 1 Discharges are sometimes granted subject to conditions or quali- CONDITIONAL fications operating, it may be, to render them unavailing in certain cir- DISCHARGE. cumstances. In these cases, the party desiring to take advantage of any condition must strictly observe the relative obligations incumbent on or affecting himself. A creditor granted a discharge, on composition, to a principal debtor, with this condition, that if a cautioner for payment of the debt discharged should agitate the question of law, whether he, the cautioner, was liberated by the creditor's discharge of the principal debtor on payment of the composition, such discharge should be void, and the composition should be then repaid. The cautioner did agitate the question judicially, but the creditor, having omitted to repay the composition to the principal debtor, was held not entitled to plead that the discharge was null as to that debtor, because he, the creditor, had not complied with the relative condition of repaying the composition." 3 When a debt is to be paid, it is of course necessary to take care that the money is actually delivered to the right party, or to one duly authorized to receive and discharge it, and who possesses the character in which he professes to act. The receiver also must be of age, and competent to grant a valid and effectual discharge. We have already seen MINORS. that a minor who has no curators cannot require his debtor to pay, because he cannot give a discharge absolutely effectual. In such cases, the party, if not mentally incapacitated, ought to choose curators to act with him, and if he fails to do so, or if he is subject to mental incapacity, the proper course for the debtor is to make consignation of the principal sum in a chartered bank; the bank's voucher specifying from whom the money comes, and that it is the amount of the debt due to the minor, or incapacitated person. The money, in such cases, will be uplifted and paid as soon as a valid discharge can be granted. But the interest on debts due to minors, if required for their maintenance, can in general be safely paid on their own receipt. 4 We have seen that a discharge in name of parties as tutors to a pupil, granted after expiration of their office, is not valid. But a discharge, where the parties granting it, in the character of attorneys, were also executors of the will of the creditor, was held binding on the granters as executors, although their office of attorney had fallen by their constituent's death (of which they were in ignorance), before the execution of the deed. The payment was there made to the right party, which necessarily operates discharge, assuming that the party is fully competent to act for himself. 1 Macfarlane, 15th Feb. 1828, 6 Sh. 556. 2 Osborne, 18th May 1832, 10 Sh. 546. 3 Hay, 22d Feb. 1749, M. 8973; Kirkman, 1st Aug. 1782, M. 8977. 4 Lockhart, 15th December 1826, 5 Sh. 136. 5 Mackenzie's Trustees, 19th June 1829, 7 Sh. 774. PAYMENT bond fide. DATIVE. There are even cases in which payment, if made by the debtor in bona fide to one who, he had probable ground to think, had right to the debt, -though in fact he had not,—will effectually extinguish the obligation.1 We have had to notice a case of that nature, viz., where the debtor paid to a married woman, after the debt was by her marriage legally transferred to her husband. A recent case, very special in its circumstances, was decided in favour of the debtor partly on the same principle. But, in order to have access to the plea, there must be good grounds for the belief. A debtor, who paid up to one of two heirs-portioners the whole of a heritable debt, notwithstanding the reported existence of the other heir in America, was ordained to pay the one-half a second time to the other heir on his appearing about ten years afterwards. But there was at least undue haste in concluding against the existence of the absent heir, and likewise strong suspicion of collusion.3 Again, where a bond to which a wife succeeded, without making up a title in her person, fell to her husband jure mariti, as not being due at the time of her succession, and the debtor, after the husband's death, paid the interest to the wife (then widow) for nearly forty years, he was held not discharged, and was found liable to pay a second time to the husband's executors. The plea of bona fides was held excluded, because the widow had no title.* Generally, debtors ought to take the benefit of all the precautions against false claims which the law allows, and to require of those who claim from them as creditors the observance of all the forms requisite for their protection and security. In the case of Buchanan," a bank having paid TO EXECUTOR £1000, lying in deposit in name of a deceased party, to the sister and executor-dative of that party, who had completed titles only to £20 of the debt, was found liable in second payment of £980 (the difference between £1000 and £20) to parties claiming under the will of the depositor. The fact of the appointment of an executor-dative-that is, an executor given by the Court-generally implies that there is no executor-nominate-that is, an executor named by the deceased. The executor-dative in this case was the next of kin of the deceased, and legally entitled to the money if there had been no will. There was, likewise, in the case no allegation of fraud or collusion between the debtor and the party who received the money. But the bank could not have been compelled to pay more than the £20 on the title offered them; and the Court held them liable in second payment, being of opinion, apparently, that if debtors paid without requiring all the securities which the law gave them in regard to title, and likewise in regard to caution, which an executor-dative is bound to find, they waived these securities at their own risk. Lord Murray says, 'Where a debtor does not avail himself ' of a right given him, for the protection both of himself and the true 1 Erskine, iii. 4. 3. 2 Stewart, 8th July 1859, 21 D. 1180. 3 Howes, 2d Dec. 1758, M. 1799. 4 Gray, 11th March 1859, 21 D. 709. 5 Buchanan, 30th November 1842, 5 D. 211. |