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Colonial Cases

Davison v. Campbell, 1870

[succession - set off - partnership]


Davison v. Campbell

British Court at Kanagawa
Lowder, 13 May 1870
Source: Japan Weekly Mail, 14 May 1870, 211-212



Friday, MAY 13th, 1870.


In H.B.M.'s Court at Kanagawa before Mr. Consul Lowder, as president and Messrs. Kahn and Thomas, as Assessors.


J. Davison, administrator in the estate of R. B. Scotland, deceased, plaintiff.


A. Campbell. defendant.


This was an action to recover the sum of $10,828.12.


Mr. Marks appeared for the plaintiff.


Mr. Barnard, for the defendant.


Mr. Marks stated, that before opening his case, he wished to re-mark that last night he received a note from Mr. Barnard asking to refer the case to arbitration, to which he returned a decided refusal on behalf of his client, not only because it came too late, but because this case involved some very grave questions of law.


Mr. Barnard argued in favor of the Court ordering compulsory reference to arbitration in cases where several items of accounts are disputed, and cited several cases in support of his argument and stated that they were the opinions of several very eminent men, and ought to be followed.


The Consul observed that in his opinion the propriety of the motion could only be ascertained bv going on with the case and he should therefore leave the question open.


Mr. Marks then opened the case on behalf of the plaintiff, the amount had been admitted by the defendant who had made a counter claim of $17,310. The deceased Mr. Scotland left his affairs in a most chaotic confusion at his death. A few days before his death defendant returned from England to Yokohama. The late Mr. L. Fletcher who was then Consul appointed the defendant as administrator of the estate, as before his visit to England and up to the time of Mr. Scotland's death, the defendant was a partner. We do not however sue the defendant as a partner but as a debtor. It does not seem legal or fair that the defendant should reap all the benefit arising out of the estate and share none of the losses, there were creditors to be satisfied, and whatever proceeds there arose out of the estate and connected with defendant, they were compelled to try and recover. The defendant had received goods and sold them and not only charged commission on the sale, but also appropriated the proceed in toto which in his, Mr. Mark's estimation, was a very

quick way of making money; as to the legality of the transaction, that he could say nothing about, but left others to judge of. He enforced that this money was advanced to Mr. Scotland as a loan on the agreement that defendant. should share half the profits. In all these transactions the defendant seemed to him, to have grasped all the proceeds of the estate, to the exclusion of the other creditors. I wish to state before concluding, that this claim is not a set off and does not admit of one.


The defendant admits having received certain monies on behalf of the estate and we want to recover those monies if we are entitled to them, and that the defendant come in with the other creditors and take his dividend out of the estate. The transaction of the defendant is, to say the least of it, a dishonourable one.

Court adjourned to 9 a.m. 14th instant.


Case resumed at 9 a.m., today the 14th.

Mr Budden sworn.

I was employed as an accountant by Mr. Scotland about 6 o 8 months before the defendant's arrival. I was never employed by the defendant before he left for England. I was engaged by Mr. Scotland to write up his accounts. Every transaction was represented as between the deceased and the defendant. Mr. Scotland paid me 25 dollars for the work. I repeatedly requested Mr. Scotland to be careful how he instructed me as they were joint accounts. That is a copy of the report sent into Mr. Fletcher by me, it was made between the defendant and Mr. Scotland. I have made up the accounts and they have been sent into the Consulate, they have since been made up to date. [Mr. Barnard here obiected to the Plaintiff's Counsel asking the witness any direct question as to what the defendant did or did not do in the matter.] Objection overruled. I asked Mr.Campbell's assistance in making up these accounts and took his information on the matter as a basis. The Invoice book and account sales were all right but the cash book was not, it was in disorder. Mr. Campbell had kept this himself, transactions occurring daily that necessitated his doing so. Mr. Campbell told me that 25 per cent was the rate of interest to be charged. I considered that Mr. Campbell's word was sufficient although I told him it would be open to dispute. I did not take the responsibility on myself and told Mr. Campbell he must do so. It is not within my knowledge that this agreement as to the 25 per cent was made. Mr. Curnow did not buy the whole of the goods but several of them were sold to other people, I debited the estate at Mr. Campbell's suggestion with the half of this 25 per cent, or 12 1/2 per cent. I never saw any money paid on the joint account for goos sold, I never saw any receipts from Mr. Curnow.

I only know one bad debt that Mr. Scotland, made, and that was Mr. Boyd's. I cannot say whether the per centage was charged on that. I was instructed by the defendant to charge 25 per cent on all the goods that had been sold, but I consider he was responsible as I was acting as his accountant and under his instructions. I never had any experience in store business and cannot say the rates for landing, duties &c. but went solely by the accounts made by Mr. Campbell's clerk, and I copied them and did not check the rates, &c. It did strike me as strange that as 25 per cent was realized all round Mr. Scotland never rendered an account sales, but he kept no accounts at all. Mr. Campbell assumed these profits to have been made. I do not know by whom these goods were sold, no account sales were rendered of these things, at least I do not know of any. The two items in the general account. Iron safes and bedstcads, on both of which 25 per cent was charged, I cannot say if they were sold, in fact the whole amount of refit is assumed. [A letter relating to the bedsteads was here handed into Court, showing they had been sold at a loss and yet the 25 per cent was charged on the refit.]

Mr. Campbell stated that this was a consignment from Jones & Co. to him and sold by Mr. Scotland of which no account sales were rendered,

Mr. Budden continued, I consider the estate ought to be credited with the charges of shipping landing duty etc. as well as debited with the 25 per cent, but it was done at Mr. Campbell's instigation. I did not make out the account sales. All the sales that Mr. Scotland made were assumed to have made 25 per cent, and all the sales Mr. Campbell made have their own profit, as they were all entered in his book and where [sic] charged accordingly. Mr. Scotland was not an extravagant man personally. It did not seem strange to me that Mr. Scotland should be always writing to Mr. Campbell for money, as I understood he made heavy losses on some Silk

and Tea transactions. I knew there were other claims against the estate and Mr. Campbell knew the same. I did not advise Mr. Campbell that his was a prior claim to any one else, but I certainly think he had, as all these transactions were on a joint account.

By Mr. Barnard, I did examine Mr. Scotland's books with him and it was his request, Mr. Campbell was then in England, I was assisted in going through the books by Mr. Scotland. The whole amount of the shipments that I went through, were nine [sic] as per account handed into Court.

Case resumed at 1.30 p.m.

Mr. Marks handed into the Court a statement of the points at issue between the parties which are:

1st.-Is the defendant entitled to retain proceeds admitted by him to have been received on account of the estate, against the administrator, the estate being insolvent.

2nd.-Is not the Plaintiff as administrator of the estate, entitled to all proceeds and assets of that estate in the first instance, and should not all proof of debts by any creditor, be made to the plaintiff as administrator.

3rd.-Does the defendant's set-of come within the partnership amendment Act 1 to 5.

4th.-Should not interest as claimed by the plaintiff be allowed on accounts received by defendant for the use of the estate.

Mr. Barnard then handed into Court a statement of issues of controversy.

1st.-Whether defendant was a co-owner of R B. Scotland in the goods sold.

2nd.-Whether assuming that R. B. Scotland was, at the time of his decease indebted to defendant in the amount claimed by defendant, this cannot be used as a set off against the claims on the estate.

3rd.-Whether, assuming that R.B.Scotland at his decease was indebted to defendant in the amount set forth in defendant's claim the latter has not a lien on the effects of the estate.

Mr. Marks remarked that as to the first point and even the second he contended the defendant. ought to hand over to the adininistator all assets of the estate, and then before the administrator prove his claims.

As to the third point at variance he thought the act he quoted was decisive; that defendants financing for Scotland was a loan, and the remuneration was to be a share in the profits.

As to the fourth point, he insisted that as defendant, instead of paying in the money, had kept it for his own use, he ought certainly, in case he was compelled to disgorge it again, to be made to pay

interest on it.

" Of these three questions one I submit, with all due respect, is a question of law and fact, rather to be tried by a Jury, that is, by the assessors, than by the Consul; the second and the third are

questions of law to be decided by your Honour alone."

The learned gentlemen then commenced to argue the several issues upon which the case would be decided.

Mr. Barnard in answer to Mr. Marks first question, argued that the defendant was entitled to retain all monies received by him, as plaintiff has not shown he was a partner with the deceased, and because he is in a position to, and will prove, that the whole of this money that the plaintiff seeks to recover from him was due to the defendant by the deceased in his lifetime.

2nd.-That inasmuch as I shall be able to show that the defendant paid for the goods, the subject matter of the previous claim out of his own monies, he had a lien upon them sufficient in hand to hold them from the administrator altogether.

3rd.-That it I am able to show that the defendant was not a partner in law, with the deceased Scotland and that the deceased was indebted to him in amount, equal to the plaintiff's claim, then the defendant is entitled to set off his claim as against the present one according to common law.

I may say that I agree with my friend as to the confusion of R.B.S. Scotland's affairs.

Mr. Campbell examined by Mr. Marks,

I do not recognize this as a general memo. of account as being sent to the administrator by me. I do not recognize Mr. Budden's signature.

It was made up with my instructions except the part about the interest. The accounts were made from my books. They were made up by Mr. Budden, I did not give him the books, he took them out of the safe as he always was in the habit of doing. The safe is always unlocked, at nine o'clock in the morning. I have not received $9,554.7 at least I cannot tell without reference to my books. Well I have, on my own account and for my own use. I credited the estate with this amount because the estate is debited with the goods I paid for. [Another account shown the witness.] That is my signature.

By Mr. Barnard. [Accounts 1 to 9 handed to witness.] My transactions commenced with the deceased about June 1867, I left soon afterwards and left with the deceased a sum of $6,000 or perhaps more.

The deceased was indebted to me in the sum of $5,016.90, I see by these amounts. On account of these nine shipments I paid $1,500. I have paid for the bedsteads and safes and they are charged in the account, the bedsteads were sold at a loss by Scotland, but if I had sold them I could have made a profit, so charged as if they had been sold at a profit. Some of the drafts I paid after Mr. Scotland died. I paid for the goods that came by the " Caractacus." The Port wine was my private property and sold by Mr. Scotland and no account sales rendered. My books will show every article that was sold since B. B. Scotland's death. All the stores were handed to me after the death of Mr. Scotland in order to close up all the accounts. $6,525.96 is the sum the estate is indebted to me besides the set off, this sum includes interest on the total amount. [Mr Marks here observed that it certainly was a great stroke on the defendants part, first he takes what does not belong to him, and then charges interest for keeping it.]

By the Court. The account was made up through orders received from the Judge. It is a mistake that the account is headed in the way it is, it ought not to have been so, I was not a partner with the

deceased. I was only a co-owner in the goods. I have no receipts or acknowledgements for goods received from Mr. Scotland. I debit Mr. Scotland with Mr. Ewart's salary and servants wages, because Mr. Ewart was employed looking after the estate,_and the servants in looking after the furniture in the house which was not sold till five months after his death. I look upon all this money with which I debit the estate as money advanced on shipments, in which we were jointly interested, that is with the exception of godown rent, insurance, salaries &c.

By the Assessors. I financed for this shipment but did not get any remuneration for it, I lost 1,500 dollars.

By the Court. I had no management of the affairs of Mr. Scotland, but was merely appointed to sell the goods by Mr. Fletcher. They did not all show a profit, some were sold at a loss.

By Assessors. The clerk and servants were engaged to look after the godown etc.

By Court. We were each to receive half of the gross proceeds that was an arrangement made by both of us.

By Mr. Marks, I was to get half the gross proceeds for advancing money for shipments to Mr. Scotland.

The Counsels for the plaintiff and defendant having summed up. The Court recorded the following decision.

Judgment for plaintiff for the sum of $9,554.7 less all such sums as have been actually paid by the defendant and which he must prove to have paid, with interest from the date of his refusal to

meet the claim, with costs.


Published by Centre for Comparative Law, History and Governance at Macquarie Law School