1840. May 7, 11. 1841. May 4. Lord COTTENHAM, L.C. [121] [*122] APPEAL FROM THE COURT OF SESSION. JOHN HUTCHINSON FERGUSSON. DAVID FYFFE (8 Clark & Finnelly, 121-143.) Accounts by bankers with customers-Liability of individual partners— Interest, Indian; compound-Foreign law-Statute of Limitations. A Scotchman in Calcutta opened an account with a banking and agency house there in 1786; and died in 1810, having been insane from 1793. Α partner in the house, being in Scotland in 1812, enclosed, in a letter to the customer's relatives there, an account current with him from 1787 to 1810, signed by the firm, bringing out annual balances in his favour, composed of annual accumulations of Indian interest, the last balance expressed “to bear interest at 9 per cent. per annum." In 1835, the customer's relatives obtained administration of his estate, and prosecuted actions, which were before commenced in the Scotch Courts, on the account current, against another partner who had joined the firm in 1793, and continued a partner through several changes till 1820; and they claimed interest at 9 per cent. upon the last balance in 1810, and upon the annual accumulations thereof since. Held by the Lords, first (concurring with the Court below), that a debt was sufficiently constituted against the firm by the account rendered by them, together with interest at 9 per cent. on the last balance in 1810, down to final decree; and that one partner was bound by the account so rendered; secondly (differing from the Court below), that the debt did not carry compound interest from 1810 (1). There cannot be a title to compound interest without a contract, express or implied, or custom. By the law of England, a contract for compound interest is not valid, except in mercantile accounts current for mutual transactions. The law of the country where a contract is made or is to be performed, furnishes the rules for expounding the nature and extent of its obligations. But the law of the country where it is sought to enforce performance of a contract, governs all questions as to the remedy and mode of proceeding, including lapse of time. Where a creditor of a firm in India died there before his right of action was barred by lapse of time, and his personal representative in Scotland brought an action there, against a partner of the firm, 23 years after the creditor's death: Held that the English Statute of Limitation did not take effect, the action having been brought within six years after English probate or letters of administration were taken out to the deceased creditor. THIS appeal arose out of actions raised in the Court of Session in Scotland, by the respondents, as executors dative of the deceased Dr. Charles Fyffe, against the appellant, for the purpose of recovering from him, as partner of an Indian house of agency, intitled "Fairlie, Fergusson & Co.," a debt due by that house to Dr. Fyffe. The respondents' claim was constituted by a docqueted (1) The case is cited as an authority on this point by Lord SELBORNE, L. C., in Barfield v. Loughborough (1872) L. R. 8 Ch. 1, 7, 42 L. J. Ch. 179, 182. account subscribed by Fairlie, Fergusson & Co., bringing down a balance of 17,346 sicca rupees, as due by them on the 30th of April, 1810 and upon this balance, from that year, the respondents claimed interest at 9 per cent. The account was made up from 1787 to 1810, with annual accumulations of interest. The appellant's defence embraced various objections: among others, his residence out of Scotland; a denial of the sufficiency of the evidence of the debt against the firm of which he had been a partner; a plea of the English Statute of Limitations; and, at all events, a resistance of the claim of Indian interest. The LORD ORDINARY, by an interlocutor of the 10th of July, 1834, repelled the preliminary defences; and on the 26th of November, 1835, after the record was closed, pronounced this interlocutor: "The Lord Ordinary having heard parties' procurators, and considered the closed record, repels the defences: finds that the pursuers (respondents) are entitled to the sum of 17,346. 5. sicca rupees, contained in the docqueted account of the 1st of May, 1810, converted at the present rate of exchange into sterling money, with interest at the rate of 9 per cent. on said sum, as so converted, from the 30th of April, 1810, till decree, and decerns for the same accordingly, with the legal interest on the sum so decerned for, until payment; and ordains the pursuers, within 14 days, to give in a state of their claim, made up in terms of this interlocutor." The respondents accordingly lodged a state of debt, in which they calculated the rupee at the rate of 2s. sterling, and accumulated principal and interest in the manner of compound interest, and thus brought out the amount, at 26th November, 1835, of 15,732l. 6s. 6d. : and the LORD ORDINARY, after hearing counsel in regard to the amount so claimed, pronounced, on the 15th of December, 1835, this interlocutor: "The LORD ORDINARY having heard parties' procurators on the 'state' now given in, and on the claim therein. made for annual accumulations of the interest at 9 per cent. since the date of the docqueted account of the 30th of April, 1810: in respect that the interlocutor of the 26th of November last decerns. for the interest only, without accumulations, and that it is incompetent for the LORD ORDINARY to alter that interlocutor, refuses the claim so made, and appoints the state to be rectified accordingly." The appellant presented a reclaiming note to the First Division of the Court, against the interlocutor of the 26th of November; and the respondents presented reclaiming notes to the same Division, against both the interlocutors, in so far as they refused the annual FERGUSSON v. FYFFE, [ *123 ] accumulations of interest: they at the same time, in order to remove the difficulty in point of form which occurred to the Lord Ordinary, raised a supplementary action calculated expressly to embrace these accumulations. A record having been afterwards made up in this action and the defences to it, the LORD ORDINARY appointed the parties to give in mutual minutes on the questions of the accumulations, in order that the same might be reported to the First Division of the Court, before which the previous process was depending. In the meantime, when the reclaiming notes came to be advised in the Inner House, questions as to the applicability of English law having been raised, the *Court appointed a joint case to be prepared for the opinions of English counsel. That case stated, among other things, that Dr. Fyffe, surgeon in the service of the East India Company, died at Calcutta, on the 9th of May, 1810; having, as alleged by the respondents, executed a testament on the 8th of October, 1790, whereby he appointed Fergusson, Fairlie, & Co., merchants in Calcutta, to be his executors, and directed them to pay his debts, sell his effects, and remit the proceeds to England; and he bequeathed the same to David Fyffe, Esq. (father of the respondents), and his family: that all the partners of the said firm were dead, or declined to act as executors, and accordingly the respondents, who were the only surviving children of the said David Fyffe, were suing in the character of executors dative quâ legatees of Dr. Fyffe and it was further alleged by them that he for many years before, and up to the time of his death, had been insane that both these allegations (of the will and insanity), not being within the appellant's knowledge, were not admitted by him, but the accuracy of them might be assumed for the purpose for which counsel's opinion was required: that in April, 1793, after Dr. Fyffe was said to have become insane, there was standing to his credit, in his account with the firm of Fairlie, Reid & Co., a balance of current rupees 4,207. 3. 10., which by annual accumulations at the Indian rates of interest, during the then next 17 years down to his death, amounted to sicca rupees 17,346. 5.: that the appellant became a partner in the house of Fairlie, Reid, & Co. in 1793, and continued a partner through the several successive changes in the firm, down to the year 1820: that the respondents founded their claim on an account intitled "Charles Fyffe, Esq. in account *current with Fairlie, Gilmore & Co.," commencing the 30th of April, 1787, and ending the 30th of April, 1810, with the FYFFE. last item expressed thus: "To balance in his favour with Fairlie, FERGUSSON Fergusson & Co., to bear interest at 9 per cent. per annum-sicca rupees 17,346. 5.;" and that account was signed by Fairlie, Fergusson & Co., of which firm the appellant was a partner: that William Fairlie, of that firm, came to England in 1810, and application being made to him by James Fyffe of Glasgow, a relation of Dr. Fyffe, he sent him the said account current, enclosed in the following letter, dated the 5th of July, 1812: "I now enclose you Mr. Charles Fyffe's account from its commencement, which I received some time ago from Calcutta. The balance at 30th April, 1810, was, rupees 17,346. 5., chiefly arising, you will observe, from the high rate of interest allowed upon it." That the said W. Fairlie had been a partner in the four several firms of Fergusson and Fairlie; Fairlie, Reid & Co.; Fairlie, Gilmore & Co.; and Fairlie, Fergusson & Co.; all which existed in succession from the period at which the said account commenced to the time it ended that on the dissolution of the firm of Fairlie, Fergusson, & Co., in 1818, it was succeeded by the firm of Fergusson, Clark & Co., of which last firm also the appellant was a partner, but retired in 1820: that from 1816 to 1825 he resided in Scotland, and in England from 1825 to the time of the actions brought. The case then stated those actions before stated, and the views the parties thereto took of their respective rights, concluding with a request that counsel would answer the following questions: 1, whether, according to the law of England, the action, and supplementary action, which have been *instituted against Mr. Fergusson, are cut off by the Statute of Limitations? 2, whether, according to that law, the question of the limitation of the claim upon Mr. Fergusson would be affected by the circumstances of Dr. Fyffe's insanity at and during so long a period of years before his death; or of his having by his will, dated in 1790, appointed the firm, therein denominated Fergusson, Fairlie & Co., his executors? 3, whether (supposing the Statute of Limitations not to apply) the terms of the account, with the docquet thereto attached, together with Mr. W. Fairlie's letter to Mr. J. Fyffe of the 5th of July, 1812, would be sufficient, according to the law of England, to establish that the firm of Fairlie, Fergusson & Co. became directly bound to Dr. Fyffe and his representatives, to pay to them the debt therein mentioned ? 4, whether, supposing these documents were held by themselves insufficient to establish the liability of the firm of Fairlie, Fergusson & Co., their liability [ *126 ] FERGUSSON v. FYFFE. [ *127 ] would be established by proof that the said firm entered into an engagement with the preceding company to undertake their debts, and actually carried them forward in their books? The joint opinion of Sir F. Pollock and Mr. Knight Bruce, dated the 18th of October, 1837, was this: "In answer to the first and second questions, we are of opinion, that if letters of administration had been granted in England by the proper Ecclesiastical Court to Mr. David Fyffe and Mrs. Kerr, upon the 20th of February, 1835, or were now to be granted to them, the Statute of Limitations could not be used as a defence by Mr. J. H. Fergusson against proceedings instituted against him in England by them after that day (within six years from the grant of the letters of administration), in the recovery of the debt in question. *There appears not to be at present, and never to have been, a personal representative of Dr. Fyffe, constituted by an English probate or letters of administration. Mr. J. H. Fergusson was not by the will appointed an executor. We think it clear that the statute was not running against Dr. Fyffe at the time of his death, whether he was then insane or not. He appears to have resided in India from the commencement of the debt to his death, and the debt was repeatedly acknowledged by the annual additions of interest between 1793 and 1810. That being so, we conceive that the time between his death and the grant of the letters of administration cannot count. "We consider the suit instituted by the representatives of Dr. Fyffe as an acquiescence in the arrangement of the account to which the letter of the 5th of July, 1812, refers; and treating them as English administrators, we are of opinion that the letter, and the account and docquet attached, would be sufficient, according to the law of England, to establish that the firm of Fairlie, Fergusson & Co. became directly bound to the representatives, to pay to them therein mentioned." The Lords of the First Division afterwards conjoined the original and supplementary actions, and appointed mutual cases to be prepared on the points not embraced in the above opinion: and their Lordships, on finally advising the cause, pronounced, on the 25th of May, 1838, the following interlocutor: "The Lords having resumed consideration of this cause, with the opinion of English counsel, and revised cases, and heard counsel for the partiesFind that the pursuers are entitled to the sum of 17,346. 5. sicca rupees, being the balance due on the docqueted account, converted at the rate of exchange current in Calcutta by the latest accounts, |