Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION II.

Alienation after Diligence.
Subject_3 SECT. II.

Payment, whether Challengeable.

Margaret Dalgliesh, Lady Riccarton,
v.
Thomas Gibson, Writer in Edinburgh

Date: 9 July 1709
Case No. No 128.

A landlord obtained from his tenant, a disposition for payment of arrears of rent, not falling under the hypothec, after the tenant had been denounced, by another creditor.

The landlord found not bound to repeat, more than if he had poinded; although, in a competition, the creditor who had first done diligence would have been preferred.

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Thomas Gibson, factor appointed by the Lords for the estate of Riccarton, having obtained a decreet before the Sheriff of Edinburgh against Robert Cleghorn one of the tenants, for his rent of the crop 1703, and in time coming, the terms of payment being first come and bygone: In November 1704 he charged and denounced thereon: In December thereafter the Lady Riccarton denounced this Robert Cleghorn, who was her debtor; and about September 1705, Mr Gibson took a disposition from him to the corns then on the ground for payment of three years rent, viz. For the crops 1703, 1704, and 1705, and by virtue thereof recovered payment.

The Lady raised reduction of the said disposition against Mr Gibson, upon the second part of the act of Parliament 1621, as made to him in prejudice of the pursuer's lawful and more timely diligence; and craved, that in the terms of that statute, he might be ordained to make furthcoming to her what was voluntarily paid to him, by the common debtor's partial favour, for the crop 1704; which neither the decreet obtained by the defender before it fell due, nor his hypotheck for the subsequent year could warrant the payment of.

Answered for the defender: He having received payment of his own rent out of the product of the ground, by virtue of the disposition taken for preventing the expence of poinding, had noways contravened the act of Parliament 1621; whereof the grand design was only to prevent fraudulent dispositions, in prejudice of anterior lawful diligence used by others. For albeit it mentions that the doer of the diligence has action to recover what was voluntarily paid, in prejudice thereof, by the debtor to his creditor; no instance can be given where ever the law took effect as to that clause: Seeing, as a person under diligence can, for the favour of commerce, sell and dispone of his moveables for what price he pleaseth to a creditor as well as to another; so he may likewise sell and dispone them to his creditors in order to be sold and applied for their payment. And it were out of measure hard if a master, who for security of his rent takes a disposition from his tenant, should ly open to the tenant's creditors, who having simple obligements, are in a capacity to do more timely diligence; especially considering, that the radical right of all the product of the ground is in the master for his rent, and the tenant has only the exercise pro cultura et cura. Though our law allows the master a hypotheck but for one year's rent, yet he has such an interest in his tenant's goods even for other years rents, as may always exclude his taking a disposition for payment from the construction of fraud.

Replied for the pursuer: Albeit in a competition, a donatar of escheat, (who is preferable to an assignee obtaining right stante rebellione,) could not repeat from a creditor getting payment in that interval; yet in the case of dispositions granted by bankrupts, (which are most unfavourable) there is no distinction betwixt a competition and repetition, 11th November 1675, No 127. p. 1029. Vietch contra Pallet; 14th November 1679, No 16. p. 890. Pollock contra Kirk Session of Leith; 10th February 1685, Brown contra Watson and Drummond, No 18. p. 892. Nor doth it alter the case, that the disposition here was by a tenant to his master; for a master (who hath a hyphtheck but for one year) suffering more years rent to ly unuplifted in the tenant's hand, is considered quoad these only as another common creditor; and any voluntary right granted to him in security thereof, falls under the act of Parliament 1621. If masters were preferable for the rents of precedent years, the credit of all tenants would be quite ruined; for nobody would deal with or trust them, as not knowing what rents may be owing to their master: Nor doth the factor's bona fides in accepting the disposition avail him; because, that might be pretended by any other creditor, qui suum recipiendo nulli videtur fraudem facere, and law, without regard thereto, preferreth the anterior diligence of another creditor, qui sibi vigilavit.

Duplied for the defender: He is not pleading upon his right of hypotheck, but upon his disposition which he lawfully took, and disposed of the subject, by virtue thereof, for payment of his rent, without any trouble or interpellation from the pursuer. The dispositions mentioned in the decisions cited by her, were not granted by tenants to their masters; and the subjects disponed were still extant unuplifted.

The Lords found, That in the case of a master obtaining a disposition from his tenant, though in a competition another creditor doing diligence might be preferred; yet the master having obtained payment bona fide by virtue of the disposition, he cannot be liable to repeat what he received, more than if he had poinded.

Fol. Dic. v. 1. p. 77. Forbes, p. 344.