Scottish Court of Session Decisions

In the summer of 1890 R. T. Pattison being in pecuniary difficulties, applied to George Liston, house-agent, Edinburgh, for a loan of money, which the latter agreed to give on the security of the furniture and effects belonging to Mr Pattison situated in his house in Chester Street. The transaction was carried out by Mr Liston advancing in loan to Mr Pattison the sum of £250, in return for which he received from the latter an assignation dated 25th June 1890, in the following terms—“I, R. T. Pattison, residing formerly at number 2 Chester Street, Edinburgh, and now at the Western Club, Glasgow, in consideration of the sum of two hundred and fifty pounds sterling instantly paid to me by George Liston, 83 George Street, Edinburgh, as the price thereof, of which I hereby acknowledge the receipt and discharge him, do hereby sell, assign, convey, and make over to and in favour of the said George Liston and his executors and assignees whomsoever, the whole household furniture, plenishing, and effects, including paintings, pictures, articles of vertu, plate, china, books, ornaments, bed and table linen, napery, and whole other articles, fittings, and effects of whatever nature or description belonging to me at present in my said dwelling-house number 2 Chester Street, Edinburgh, and I have herewith delivered up to the said George Liston the said household furniture and effects with the keys of the said dwelling-house.” Of even date with that letter Mr Liston wrote and delivered to Mr Pattison a letter in the following terms—“Sir,—With reference to the assignation of your household furniture and effects granted by you in my favour of even date herewith, although the same is ex facie absolute, I admit that it is truly in security of an advance of two hundred and fifty pounds (£250) made by me to you contained in your promissory-note to me of this date, payable on June, Eighteen hundred and ninety-one, with interest thereon at the rate of six per cent. per annum, and whole expenses already incurred or to be incurred by me in relation thereto, and on repayment of the said advance, interest, and expenses, I shall be bound to deliver up the said assignation and promissory-note to you, but in the event of the said advance, interest, and expenses not being repaid to me on or before the said first day of July Eighteen hundred and ninety-one, I shall then be entitled at any time, as you by your subscription hereto empower and authorise me, to sell and dispose of the said furniture and effects in whole or in part, and account to you or your representatives for any balance that may remain after payment of the said advance, interest, and expenses and any preferable charges.” This back-letter was signed by both Mr Liston and Mr Pattison before witnesses.

At the date when the letters above referred to passed between Mr Pattison and Mr Liston the house in Chester Street was unoccupied, and the keys thereof were in the hands of the latter as house-agent. The house, with the whole furniture in it, was occupied by Mr Pattison and his wife during the months of July and August 1890, when it was again shut up and the keys returned to Mr Liston. It was thereafter let as a furnished house to a Mr Stewart for a year from Martinmas

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1890, and the rent for that year was collected by Mr Liston and paid over as received by him without any deduction to Mr Pattison. Mr Stewart went out of town in August 1891 for a few weeks, and on leaving he handed the keys to Mr Liston, from whom he again received them on his return. Mr Stewart quitted the house on 1st November 1891, more than three weeks before the period when his tenancy expired, and on doing so handed the keys again to Mr Liston. The house was again let with the furniture as at 1st December 1891, and was in the occupancy of the tenant who then entered at the date of Mr Pattison's sequestration on 15th December 1891.

During the time that Mr Stewart was absent from the house in August 1891, Mr Liston went to the house and took out of a lumber-room—which was not let to Mr Stewart, but was kept locked—a number of boxes in which plate, napery, and other articles belonging to Mr Pattison and his wife, which they did not wish the tenant to have the use of, had been packed. On the 4th of November after Mr Stewart had quitted the house, Mr Liston again went to the house and removed a considerable amount of pictures and furniture. The defender never told Mr Pattison that he intended to remove or had removed these articles, and Mr Pattison did not know that he had done so until after his sequestration.

In June 1892 John Wilson, C.A., Glasgow, trustee on the sequestrated estate of Mr Pattison, and Mrs Pattison with consent of her husband as her curator, raised an action against Mr Liston (1) to have it found and declared that at the date of Mr Pattison's sequestration the whole furniture and other effects in the dwelling-house No. 2 Chester Street, with the exception of the articles in said house belonging to Mrs Pattison, formed part of Mr Pattison's estate, and fell under the sequestration, and were vested in the pursuer John Wilson by the confirmation in his favour as Mr Pattison's trustee, and that the defender had no right of property or other right in or over such furniture or effects entitling him to withhold them from the pursuer John Wilson, and in particular that the defender had no such right under the assignation and relative back-letter; (2) to interdict the defender from selling or disposing of any part of the said furniture or effects belonging to the pursuers John Wilson and Mrs Pattison, or from preventing the pursuers from obtaining possession of said furniture or effects on payment of the price thereof; and (3) to ordain the defender to deliver to the pursuers the articles removed by him from No. 2 Chester Street.

The defender lodged defences, and pleaded—“(1) In virtue of the said assignation and possession following thereon, an effectual security was constituted over the subjects in question in favour of the defender. (2) The defender holding a lien over the said subjects is not bound to deliver them to the pursuer, and is entitled to retain or realise.”

The Lord Ordinary ( Low) after hearing proof, pronounced the following interlocutor on 13th December 1892:—“Repels the defences, and (1) finds, decerns, and declares in terms of the first conclusion of the summons under the three heads thereof; (2) Interdicts, prohibits, and discharges in terms of the second conclusion of the summons; and (3) Decerns and ordains the defender to deliver to the pursuers the articles set forth in the third conclusion of the summons, and in terms thereof.”

“ Opinion.—The question in this case is whether the defender acquired an effectual security over the furniture belonging to Mr Pattison, the trustee upon whose sequestrated estate is the principal pursuer.

As regards the bulk of the furniture of which the defender never obtained actual possession, I am of opinion that no effectual security was constituted. The furniture was in the house No. 2 Chester Street, which was vested in Mr Pattison's marriage-contract trustees. The house was either occupied by Mr Pattison himself, or let to tenants along with the furniture. The rent was paid for the house as a furnished house, and was collected by the defender (who acted as house-agent in connection with this property), and accounted for by him to Mr Pattison.

The defender, however, maintained that he had possession by having the keys of the house. The assignation in the defender's favour of the furniture and effects in the house, which with relative back-letter is the foundation of the security which he claims, bears that Mr Pattison has ‘herewith delivered up to the said George Liston the said furniture and effects with the keys of the said dwelling-house.’ The defender says that he actually obtained and kept the keys of the house, and that in that way he had possession of the furniture.

But the defender had the keys of the house before the assignation as the house-agent who had charge of it, and there was no new delivery of the keys to him at the date of the assignation as possessor of the furniture. The defender simply continued after the assignation to have the same possession of the keys which he had before the assignation, such possession, namely, as was necessary to enable him to fulfil his duties as house-agent. Shortly after the assignation Mr Pattison himself resided in the house, and then it was first let to one tenant and then to another. Of course the occupier of the house—whether Mr Pattison or a tenant—had the keys, which were handed back to the defender as house-agent when a period of occupation came to an end. I am of opinion that such possession of the keys did not constitute possession of the furniture such as is required to constitute the real contract of pledge.

But the defender in August and in November 1891 took possession of certain articles of furniture which were in the house, and he has still possession of them, and he contends that at all events as regards these he has a perfectly good security.

The question is one of novelty and

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difficulty, and it is necessary to see the precise circumstances under which possession was obtained—[ Here his Lordship stated the circumstances of the case.]

There is a distinction between the articles removed in August and those removed in November.

In regard to the latter, it seems to me that the defender was not entitled to remove them, and that he cannot found upon the possession which he obtained. When articles were removed on 4th November the defender had possession of the keys, but he had so as the house-agent employed by the proprietors to look after the house and furniture. Mr Stewart had left the house before the expiry of his lease—which was current when the articles were removed—and had handed the keys to the defender as representative of the lessor. Further, the defender was at that time under employment to find a new tenant for the house and furniture after Mr Stewart's lease expired, and the furniture which he took away was part of the furniture which he was employed as house-agent to let. In such circumstances I am of opinion that the defender was not entitled to remove any part of the furniture without Mr Pattison's consent, and that the possession which he obtained cannot avail him.

The boxes removed in August 1891 are in a different position. They were not among articles let to Mr Stewart, and were kept in a room which was not let to him, and of which the defender had the key. The articles had been packed in the boxes and put into the room by Mr Pattison when he was in the house in August 1890, and the defender says that he subsequently got a lock put on the door, and kept possession of the key. It seems to me that the defender had the key of that room as Mr Pattison's agent, and was custodier for Mr Pattison of the articles in the room, and not as pledgee of the articles. It is true that the defender held, for what it was worth, an assignation of all the articles in the house in security of the loan. But he had not received any specific articles in pledge, and what he did appears to me to have been to attempt to create the contract of pledge by using the power he had over the articles as custodier for the purpose of taking possession of them. I am of opinion that he was not entitled to do so. I do not think that one party to a contract can change its character to his own advantage without the consent of the other party. It is true that the defender had an assignation ex facie absolute to all the furniture and effects in the house. But the assignation was qualified by the back-letter, and the case was argued entirely upon the footing that the defender's right was one of security only, no special point being made of the fact that in form the assignation was absolute.

I am therefore of opinion that the pursuers are entitled to decree.”

The defender reclaimed, and argued—This was an absolute conveyance, there being no qualification in the conveyance except that the purchaser was not to part with the goods sold before a certain date. Pledge was a lower contract than the one here entered into. There was here a transference of proprietary right— Hamilton v. Western Bank of Scotland, December 13, 1856, 19 D. 152. Defender got actual delivery of the furniture by the delivery of the keys—Bell's Comm. (7th ed.) i. 186; Erskine's Inst. ii. 1, 19; Maxwell & Company v. Stevenson & Company, April 4, 1831, 5 W. & S. 269; Commercial Bank of Scotland v. Gourlay & Muir, November 18, 1892, 30 S.L.R. 89. Even if it was held that in this case delivery of the keys was not delivery of the furniture, it was not necessary under the Mercantile Law Amendment Act 1856 where there was an absolute conveyance that actual delivery should follow in order to transfer the goods. Besides, the defender had entered into possession of the furniture and effects in the house, or at least of part of them. He had an assignation of the articles, which was a continuing mandate to take delivery, and he became the proprietor as soon as he entered into possession.

Argued for pursuer—There was no sale here; only a loan in security of the furniture. There had been no real delivery. No doubt delivery of the keys was actual delivery if the keys were delivered in order to exclude the seller. But here the keys were in the possession of the defender as house-agent, not as purchaser of the furniture, and Mr Pattison had not been excluded; he was in occupation of the house and furniture either personally or by tenants paying him rent as landlord down to the date of his bankruptcy. The goods removed by the defender were carried off by him illegally, without the knowledge or authority of Mr Pattison. Some of these goods belonged to Mrs Pattison, and were locked up with others belonging to her husband in order to keep them from being used by the tenants, but Mr and Mrs Pattison had never locked up these goods in order that they might be specially reserved as security for the defender. No delivery of any sort had passed on the assignation, and there being no sale, all the furniture and effects, except those which belonged to Mrs Pattison, were the property of the bankrupt at the date of his sequestration— Mackinnon v. Max Nansen & Company, July 2, 1868, 6 Macph. 974; Stiven v. Scott & Simson, June 30, 1871, 9 Macph. 923 (opinion of Lord President Inglis, 936).

At advising—