Scottish Court of Session Decisions

Mrs Gordon Galbraith or Gray died on April 13th 1892, leaving a testament dated April 7th 1891, by which she bequeathed all her estate to her husband Alexander M'Gregor Gray, whom she nominated as her sole executor, and confirmation duly followed.

At her death she was entitled to a sum of £365, 2s. under the settlement of her father the late Peter Gordon, Glasgow.

A process of cessio was raised against Gray, and cessio was awarded upon 13th May 1893, and the debtor decerned to execute a disposition omnium bonorum in favour of Alexander Cumming Rutherford, as his trustee. No disposition omnium bonorum was granted, and no further proceedings took place under the cessio. The decree was not extracted until 8th January 1894.

In December 1893 Gray married Miss Agnes Jardine Buchanan. In contemplation of this marriage the intending spouses executed an antenuptial marriage-contract dated November 15th 1893. By this contract Gray disponed to his intended spouse, whom failing the child or children of the marriage “all right and interest belonging to him in the estate of the said deceased Peter Gordon under and in virtue of his trust-disposition and settlement,” &c. On the other part Miss Buchanan accepted the above-mentioned provisions and the others conceived in her favour in full satisfaction of all terce of land, legal share of moveables, and every other thing that she jure relictœ or otherwise could claim from the said Alexander M'Gregor Gray, or his heirs, executors, or representatives, if she should survive him. The contract was intimated to two of the trustees on 29th December 1893, and to the remaining trustee on January 9th 1894.

In January 1894 a process of sequestration

Page: 258↓

was raised in the Sheriff-Court at Glasgow, and after the usual procedure Robert Tosh, accountant, Glasgow, was appointed trustee in the sequestration, and was confirmed on February 15th 1894.

Alexander Cumming Rutherford, the trustee in the cessio process, by assignation dated May 14th 1894, assigned to Tosh his whole right and interest in the bankrupt estate.

Gray and his wife on the one hand, and Tosh as trustee in the sequestration on the other, claimed the amount due to Mrs Galbraith or Gray under Peter Gordon's settlement from Peter Gordon's trustees, who brought an action of multiplepoinding in the Sheriff-Court at Glasgow to have these competing claims determined.

Both parties claimed the fund.

Tosh pleaded—“((1) The common debtor having been divested of his estates by the decree of cessio granted in favour of the said A. C. Rutherford, and the same having been transferred to the said A. C. Rutherford, the claimant, in virtue of his assignation, is entitled to be preferred to the fund. (2) The antenuptial marriage —contract having been entered into by the common debtor when in a state of insolvency and when an undischarged bankrupt, it ought to be set aside and the claimant preferred to the fund in medio, and to be found entitled to expenses against the opposing claimants. (3) The antenuptial marriage contract conveyance having been granted by the common debtor in fraud of his creditors, it ought it be set aside and the claimant preferred. (4) The claimant as trustee on the sequestrated estates of the common debtor, is entitled to be preferred to the fund.”

Gray pleaded—“The fund in medio being a portion of the residue of the estate of the deceased Peter Gordon, and the claimants being entitled thereto under and by virtue of the foresaid trust-disposition and settlement, the testament of the said deceased Margaret Gordon Galbraith or Gray, and the foresaid antenuptial contract of marriage, they are entitled to be ranked and preferred in terms of their claim.”

“The Debtors (Scotland) Act 1880 (43 and 44 Vict. cap. 34) provides by section nine “that any creditor of a debtor who is notour bankrupt, may present a petition to the sheriff of the county praying that the debtor may be ordained to execute a disposition omnium bonorum for behoof of his creditors, and that a trustee be appointed to take the management of the estate for behoof of his creditors, and that such process shall be deemed a process of cessio.” Section 9—“On such petition being presented, the following provisions shall have effect—(5) Until the debtor shall execute a disposition omnium bonorum for behoof of his creditors, any decree decerning him to do so shall operate as an assignation of his moveables in favour of any trustee mentioned in the decree for behoof of such creditors.”

Upon August 4, 1894, the Sheriff-Substitute (Murray) pronounced this interlocutor—“Ranks and prefers the real raiser on the fund in medio to the extent of £13, Os. 5d. the amount of his taxed expenses, and these expenses having been paid before consignation for the reasons assigned in the note annexed hereto, Ranks and prefers the claimant Tosh to the balance of the fund in medio.”

Upon appeal the Sheriff ( Berry) adhered.

“Note.—… In disposing of the question between the parties, the material facts and dates are as follows. On 13th May 1893, in a petition for cessio at the instance of a creditor, the bankrupt was decerned to execute a disposition omnium bonorum in favour of A. C. Rutherford as trustee for his creditors. No such disposition has been executed by the bankrupt. The decree of cessio was extracted on 8th January 1894. Subsequently the bankrupt was sequestrated, and an assignation in favour of the trustee in the sequestration, the present claimant, was executed by the trustee in the cessio. Previous to his marriage with his present wife, the bankrupt and his intended wife entered into a marriage contract, which bore, inter alia, to convey to her all his interest in the estate of Peter Gordon. The contract is dated 15th November 1893, and, as appears from a docquet thereto, it was intimated to two of Peter Gordon's testamentary trustees on 29th December 1893, and to the third then surviving on 9th January 1894. The question whether the decree of cessio on 13th May 1893, in right of which the trustee in the sequestration stands, confers, in respect of its priority in date, a preference over the right taken under the intimated marriage-contract is important. The Debtors Act, 1880, by sec. 9 (5), provides that “until the debtor shall execute a disposition omnium bonorum for behoof of his creditors, any decree decerning him to do so shall operate as an assignation of his moveables in favour of any trustee mentioned in the decree for behoof of such creditors.” It is said that that enactment is not so sweeping in its terms as the corresponding provisions of the Bankruptcy Act, 1856, and that the assignation under the Debtors Act cannot be treated as equivalent to an intimated assignation. It is also argued that the date when the decree of cessio was extracted, and not the date of the decree itself, is the governing date in questions like the present. On neither of the points thus raised on behalf of the claimants, the bankrupt and his wife, are they, in my opinion, entitled to succeed. I agree with the Sheriff-Substitute that, as a judicial assignation, the decree of cessio did not require intimation in order to be operative; and further, that it was effectual in competition although unextracted. Had I thought that effect could be given to it only when extracted, a nice question might have arisen, whether, as intimation was made to a majority of Peter Gordon's trustees on 29th December 1893, although not made to the remaining trustee until 9rh January 1894, the intimation was not sufficiently completed and so effectual at the former date, i.e., before 8th January

Page: 259↓

1894, the date of the extract. Taking the view of the law which I have stated, it is unnecessary for me to consider that question.”

The claimants, Alexander M'Gregor Gray and Agnes Jardine Buchanan or Gray, appealed to the Court of Session.

At advising—