Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION II.

Alienation after Diligence.
Subject_3 SECT. VIII.

Effect of Mora in the conduct of the Creditor Reducer.

Mr David Drummond, Treasurer to the Royal Bank,
v.
Alexander Kennedy of Glenour, and John Reid, Taylor in the Canongate

Date: 9 July 1709
Case No. No 164.

A person insolvent, after he was charged with horning, granted a voluntary assignation in security of a debt contracted before the charge. Reduction upon the act 1621, at the instance of the user of the horning, dismissed, because he had been in mora; not having denounced for five months after the charge. See No 149. p. 1057.

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In an action, at the instance of the treasurer of the bank, upon the act of Parliament 1621, for reducing a voluntary assignation, granted by Alexander Paxton, stabler, when insolvent, in favours of Glenour and Reid, within ten days after he was charged with horning by the pursuer, for security of a debt contracted before the charge:

Alleged for the defenders:—The pursuer having charged the common debtor with horning on the 2d February, ten days before the assignation to the defenders, and intimated the 23d, and used no further diligence for a matter of five or six months after the charge; he was in mora, and his inchoate diligence, by a simple charge, so neglected to be consummated by denunciation, or poinding, &c. to affect the common debtor's lands and goods, can be no ground to reduce the right made to the defenders.

Answered for the pursuer:—The act of Parliament 1621 requires only to found reduction thereon, that a bankrupt make a voluntary right in defraud of the lawful and more timely diligence of another creditor having served inhibition, or used horning, &c. And the pursuer hath used horning by giving a charge, which is using thereof in a proper sense; denunciation being only the effect of disobedience to the charge. Law requires not consummated and complete diligence actually affecting the subject, which per se, would be a title to reduce after voluntary deeds, without the benefit of the statute 1621; but such as may thereafter affect, and be completed, Bathgate contra Bowdoun, No 140 p. 1049; and December 11, 1691, The Creditors of Langtoun, voce Competition, where the execution of a charge of horning against a debtor was found relevant in the terms of the act 1621 to reduce posterior voluntary rights.

Replied for the defender:—By inchoate diligence in the statute 1621, is meant where the creditor is in cursu diligentiæ, and goes on without delay to complete it in due time, Stair, Instit. lib. 1. tit. 9. page 83. (85.) lib. 4. tit. 35. § 17. Hamilton contra M'Culloch, Spottiswood, p. 43. (voce Bona et Mala Fides.) And can the pursuer be understood to have been in cursu diligentiæ, who forbore to denounce for six months after the charge? Again, by horning we understand denunciation, or such a diligence as can affect the dyvour's lands or goods, 11th November 1675. Veitch contra Pallet, No 127. p. 1029.; 18th July 1677, Murray, contra Drummond, No 139. p. 1048.; which a simple charge can never do.

Duplied for the pursuer: Seeing the statute prescribes no definite time for completing diligence, in order to found reduction thereon; it sufficeth to prosecute the same within the year, which law and custom allows for denouncing upon a charge of horning. 2do, The defender cannot obtrude mora to the pursuer, seeing the assignation made to him within ten days of the charge, would have been unquestionably reducible, had denunciation followed a few days after the assignation, as in Major Bateman and Provost Drummond's case, p. 1067. and p. 1076.: And the pursuer's delaying to denounce could not validate the null assignation; for that, quod ab initio vitiosum est, tractu temporis convalescere non potest. Besides, it is the interest of a trading place, that creditors be not forced immediately to the utmost step of rigorous diligence; but left to use their discretion in allowing some reasonable time to the person charged, to recover and extricate himself before the fatal completing of diligence against him. The practiques cited by the defender, are not to the purpose; for in that betwixt Veitch and Pallet, denunciation had been used before the date of the voluntary right: And a simple charge would not have been good in competition with a voluntary right, granted a year after the charge, upon which no subsequent denunciation could have followed effectually. When it is said in Murray and Drummond's case, that horning has a general effect both as to lands and moveables; that is not so to be understood, as if denunciation anterior to the voluntary right were necessary; but only that a charge of horning may lawfully affect these when completed by denunciation. What is cited out of Spottiswood, is as little to the purpose; for there the acquirer of the voluntary right had not taken the same in security or payment of bygone debt, but for a price paid long after the reducer's apprising.

The Lords repelled the reason of reduction upon the act of Parliament 1621; in respect that, albeit the pursuer had used horning by a charge before the assignation, yet he had not connected and completed his diligence by denunciation for five months thereafter, No 149. p. 1057.

Fol. Dic. v. 1. p. 80. Forbes, p. 334.