Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION I.

Reduction of Alienations made by Bankrupts where the Reducer has done no Diligence.
Subject_3 SECT. II.

Alienations ominum bonorum.

James Pollock
v.
The Kirk-Session of Leith

Date: 14 November 1679
Case No. No 16.

Where no diligence had been done, a disposition omnium bonorum found to be ineffectual in competition with an arrestment.

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Hugh Wallace, writer to the signet, being charged to make payment of the sum of 500 pounds due by his bond to James Haliburton in Leith, and assigned to James Pollock, he gave in a bill of suspension upon double-poinding, wherein compearance was made for the Kirk-session of Leith, to whom John Haliburton was debtor, as cautioner for Bailie M'Dowgal, for the sum of 1000 merks. The assignee craved preference, because the assignation was intimate before the arrestment. The arrester answered, That the assignation was omnium bonorum, whereby the cedent disponed certain tenements, and all his plenishing and moveables, and all his bonds in general, and bore expressly, that it was to prevent his creditors, to whom he was cautioner, and to prefer his proper creditors: and therefore it was fraudulent: And, by the act of Parliament against bankrupts, whoever is known to be bankrupt, or makes disposition, by which he becomes insolvent, and unable to pay all his debt; such dispositions and assignations, whereby an insolvent debtor gratifies some creditors and prejudges others, are declared fraudulent and annullable. It was answered, That Haliburton was not bankrupt, nor any diligence done against him before this right to Pollock ; but this arrestment was posterior, and could not hinder creditors to secure themselves before it was laid on. But, by the said act, gratification is only excluded in prejudice of creditors, who have done prior and better diligence, and it was very allowable for a debtor to prefer his proper creditors, to them to whom he was only cautioner. It was replied for the arrester, That that clause in the act, in favours of creditors doing prior diligence, would take effect, though the common debtor were neither bankrupt nor insolvent: But, by the first part of the act, bankrupts are disabled to grant any voluntary or unnecessary right, and so can prefer no creditor to another, though neither of them have done diligence, especially by a general disposition and assignation, such as this is; for though a particular right might be taken by a creditor from an insolvent debtor, for his security or payment, the creditor not being thereby particeps fraudis, might be secure; but where the creditor is particeps fraudis, either when the debtor is a notour bankrupt, or where the right granted to the creditor is omnium bonorum, and that thereby he knoweth the other creditors to be cut off, the same is fraudulent on his part and null.

The Lords found the arresters allegiance relevant, that by this disposition, Halyburtoh the common debtor became insolvent, and that his estate was not sufficient to pay his proper debts and his cautionry, over and above what his relief could free him of, it bearing to be omnium bonorum.

Fol. Dic. v. 1. p. 67. Stair, v. 2. p. 707.