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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Colonial Mutual Life Assurance Society, Ltd v. Brown and Others [1911] ScotLR 427 (07 February 1911) URL: http://www.bailii.org/scot/cases/ScotCS/1911/48SLR0427.html Cite as: [1911] SLR 427, [1911] ScotLR 427 |
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Page: 427↓
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A creditor arrested in the hands of an insurance company a sum under a policy which had become payable to his debtor, and for which the debtor had granted a discharge. The insurance company having raised a multiplepoinding, the arrester objected to the competency thereof on the ground that there was no double distress. Held that the multiplepoinding was competent.
On 3rd May 1910 the Colonial Mutual Life Assurance Society, Limited, having their registered office at Melbourne and their head office for the United Kingdom at 33 Poultry, London, pursuers and real raisers, brought an action of multiplepoinding against (1) John Brown, formerly residing in Edinburgh and then residing in Jersey City, near New York, U.S.A., who was described as common debtor, and (2) Poole & Company, accountants, Edinburgh, and Alexander Wilson Poole, accountant there, the sole partner thereof, who were described as “creditors or pretended creditors of the said John Brown,” all defenders, to have it found that they were only liable in once and single payment of the principal sum of £105, 10s., including cash profits, due under a policy in name of the common debtor effected with the pursuers. In terms of the policy this sum became payable within one calendar month after proof to the pursuers that John Brown had survived 21st March 1910, the date of the maturity of the policy. On or about 26th March 1910 the defenders Poole & Company used arrestments to the extent of £400 in the hands of the pursuers to found jurisdiction against John Brown and also on the dependence of an action in the Court at Edinburgh against him. In this action Poole & Company obtained decree for £272, 10s. with expenses. Following on this action they raised on 20th April 1910 an action of furthcoming in the Sheriff Court. The pursuers thereupon, on 3rd May 1910, raised the present action of multiplepoinding in which they stated that the sum due under the policy was claimed by John Brown, and that the arrestments used by Poole & Company to found jurisdiction were irregular in form. At the discussion in the Inner House it was stated at the bar that John Brown had sent to the pursuers from the United States a discharge dated 24th March 1910, on receipt of which they were entitled, if not interpelled, to pay the fund. It was also stated that the Sheriff-Substitute had, on 28th June 1910, dismissed
Page: 428↓
the action of furthcoming on account of an irregularity in the arrestments, and that this interlocutor had been affirmed by the Sheriff on 19th July 1910. The defenders Poole & Company and A. W. Poole lodged defences, in which they pleaded, inter alia—“(1) There being no double distress, the action is incompetent and should be dismissed, with expenses. (2) In respect that the defenders Poole & Company are alone entitled to the fund in medio, they should in the circumstances condescended on be ranked and preferred thereto with expenses. (3) In respect that the pursuers and real raisers have pled and established that the said arrestments ad fundandam jurisdictionem were invalid, they are barred personali exceptione from raising and insisting in the present action and should be found liable in expenses to the defenders.”
On 1st December 1910 the Lord Ordinary ( Ormidale) repelled the first plea-in-law for the compearing defenders, found the pursuers liable only in once and single payment, and allowed all parties claiming an interest in the fund in medio to lodge their condescendences and claims within fourteen days.
The defenders having obtained leave, reclaimed, and argued—There was here no double distress. The arrestment was bad before this action was raised, and even if it was good one arrestment would not entitle an arrestee to proceed with a multiplepoinding. No doubt double distress did not mean double diligence. It was enough if there were a depositary and two conflicting claimants. But here there was no common debtor and no competition. John Brown, described as such in the summons, was debtor to nobody but Poole & Company, and if he had a claim against the pursuers, these defenders could enforce their claim through him. Actions of multiplepoinding by trustees for exoneration and discharge, or by depositaries, were in a different position and did not require a common debtor — M'Dowall & Neilson's Trustee v. Haggart & Company, December 15, 1905, 8 F. 235, 43 S.L.R. 187. An arrestee could not bring a multiplepoinding unless there was a conflict among creditors. There was no case where an arrestee following on one arrestment had been held entitled to bring a multiplepoinding. Winchester v. Blakey, June 21, 1890, 17 R. 1046, 27 S.L.R. 811, was a typical illustration of the rule, as there was there a true competition of creditors for the fund in medio; on the other hand, in the case of Clark v. Campbell, December 12, 1873, 1 R. 231, 11 S.L.R. 138, which was analogous to the present case, the action was held incompetent.
Argued for the pursuers—The competency of the multiplepoinding was to be judged of as at the date of the summons, i.e., as at 3rd May 1910. At that date the policy had matured and become payable. Further, it was not decided that the arrestment was bad until long after the summons was raised, the date of the Sheriff-Substitute's judgment to this effect being 28th June, and of the Sheriff affirming, 19th July. There was, therefore, sufficient double distress here to justify a multiplepoinding, and it had already been decided in Scott & Others v. Drysdale, May 22, 1827, 5 S. 643 (689), that if there were competing claims one arrestment was sufficient. In the case of Clark v. Campbell, cit. sup., there was only a dispute between a creditor and his debtor, and the action was raised by the latter. The present case was analogous to Royal Bank of Scotland v. Price, January 24, 1893, 20 R. 290, 30 S.L.R. 339, and Fraser's Executrix v. Wallace's Trustees, February 15, 1893, 20 R. 374, 30 S.L.R. 421, and a fortiori of Commercial Bank of Scotland, Limited v. Muir, December 1, 1897, 25 R. 219, 35 S.L.R. 174, in all of which the competency of a multiplepoinding had been sustained.
In this particular case we have the question whether when one party uses arrestments and another party indicates an intention to compete with the arrestor, there is sufficient ground for an action of multiplepoinding, There is no doubt it is unnecessary that there should be arrestment by both of the parties who assert a right to the fund in medio. So early as 1827 we have the case of Scott v. Drysdale ( 5 S. 643), in which the particulars in the rubric are as like the material facts in this case as possible. That case was well considered and the judgment of the Lord Ordinary was reversed.
In this case the record is unfortunate in terminology, but this does not affect the result. I think the case falls within the passage in the opinion of Lord M'Laren in the case of Winchester v. Blakey ( 1890, 17 R. 1046), in which his Lordship says—“The practice of our courts, however, warrants a much greater latitude in the case of the holder of the fund than in the case of the competitors, and for the reason that the holder of the fund can never raise a direct action, and is not bound to remain a depository till the day of his death or till the disputing parties agree to settle their claims. He is entitled to be relieved by
Page: 429↓
In the case of M'Dowall v. Haggart & Co. ( 1905, 8 F. 235), decided in this Division, I see that I gave the leading opinion. If it was the case that before that decision it had been held that competing claims were sufficient ground for an action of multiplepoinding, then it is abundantly clear that this action is competent. Now it had been so held prior to the decision in M'Dowall's case. It was distinctly so decided by the First Division in the case of the Commercial Bank of Scotland v. Muir that it was so. The position of parties here is, in my opinion, practically the same, and I am therefore of opinion that the interlocutor of the Lord Ordinary should be affirmed.
The practice has now got very far away from the double distress which was required in the days when this was held to mean legal distress. I think the position is well summed up by Lord Kinloch in the case of Russel v. Johnston, 1859, 21 D. 886, where he says—“In the original conception of the process the proper ground of a multiplepoinding was double distress in the strict sense of the term, or, in other words, competition created by rival diligence. But in later times it has not been thought indispensable to have double diligence, but double claims to the same fund have been thought sufficient. It is still, however, necessary to the validity of the action that there should be a true case of double claims to one fund or property on separate and hostile grounds.” I think that this case supplies the requisites above described. We have claims by an arresting creditor and by another person who is truly the proper creditor of the real raisers, because he is the party to whom they are by the terms of their policy obliged to pay the fund in medio if not interpelled. In these circumstances, and considering further that Mr Brown is furth of Scotland, being resident in Jersey City, U.S.A., I consider that this is a case in which the raising of an action of multiplepoinding was a proper step for the assurance company to take for their own exoneration, and also for the purpose of seeing that the money due to Mr Brown was not paid away without judicial sanction. Accordingly I am of opinion that the Lord Ordinary's judgment should be adhered to.
On the record two salient facts appear. First, it is averred by the pursuers and real raisers that the sum due under the policy is claimed by John Brown. Secondly, there is this fact:—the second plea of the defenders is to the following effect:—“In respect that the defenders Poole & Company are alone entitled to the fund in medio, they should, in the circumstances condescended on, be ranked and preferred thereto with expenses.” I think we have here a plain case of adverse claim to the same fund. Of course a mere bald statement that there are certain claims on the fund would not be sufficient, but an explanation is given of the nature of the claim of John Brown. It was stated at the bar that he sent across a discharge dated 24th March 1910, on receipt of which the real raisers (if not interpelled) were entitled to pay the fund. The real raisers also set out that arrestments were used in their hands on 26th March 1910. The present action was brought on 3rd May 1910. It was admitted that it was only on 28th June that the Sheriff-Substitute decided that owing to an irregularity in the arrestments the furthcoming following on them was bad. That judgment was affirmed by the Sheriff on 19th July 1910, so that at the date of the present action there were competing claims on the fund. It is plain the matter will not be allowed to rest here, because Poole & Company having got decree for £272, 10s. against Brown, are creditors of his, and it was stated frankly at the bar that it was their intention to make good their claim against him out of
Page: 430↓
The Court refused the reclaiming note, adhered to the interlocutor reclaimed against, and remitted the cause to the Lord Ordinary to proceed therein.
Counsel for Pursuers and Real Raisers (Respondents)— M. P. Fraser. Agents— Fyfe, Ireland, & Co., W.S.
Counsel for the Compearing Defenders (Appellants)— M'Kechnie, K.C.— A. A. Fraser. Agent— Sterling Craig, S.S.C.