Scottish Court of Session Decisions

Subject_1 DECISIONS of the LORDS OF COUNCIL AND SESSION, reported by SIR PETER WEDDERBURN, LORD GOSFORD.

Peter Pallet, Merchant in Bourdeaux,
v.
Rodger and Veatch

Date: 19 February 1675

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In an action against Sir George Maxwell, for payment of the remainder of a debt due by a bond granted to Robert Brown, as assignee by James Sanderson, to whom Colonel Stewart in Ireland was debtor in a great sum of money, for which Sir George Maxwell did grant his bond; there being compearance made for William Veatch and David Rodger, who was donatar to Sanderson's escheat, who craved to be preferred, upon this reason,—That any assignation made by Sanderson to Robert Brown was stante rebellione, and could not prejudge the King or his donatar:—

To which it being answered for Peter Pallet, who was donatar to Robert Brown's escheat, and likewise assignee made by him; that they, being lawful creditors to Sanderson, were in bona fide to take an assignation to any of his debts; and, by virtue of his assignation, having in effect received payment, and extinguished the debt due by Colonel Stewart, by receiving this new security and bond from Sir George Maxwell, whereof a great part was paid; as there could be no repetition of what was paid, which hath been already found in this process, so as to the remainder he ought to be preferred to Rodger and Veatch, his assignee; because he was in the clear case of innovation, which extinguishes the old debt due to Sanderson, to whose escheat Rodger was donatar, and constitutes Sir George Maxwell debtor proprio nomine, and that before the gift granted to Veatch.

It was alleged for the donatar, that this new bond could not be esteemed an innovation, because Digestis, de novationibus, no novation is to be understood, except where the parties, totidem verbis, declare that new bond to be a novation; which cannot be evinced from this bond granted by Sir George Maxwell, because it relates to Stewart's bond, as come in place thereof; and this was an existing debt the time of the second bond, which was not delivered back by Stewart or Sir George.

It was replied, that Sir George's bond is a clear novation notwithstanding; because the law of the Digestis cited, is only correctorie of the former laws, which did ordain (presumptione legis,) novation in certain cases should be sustained, albeit it was non constat from the writs themselves, that the new bonds were in place of the old; and that the same were extinguished, and the debtor of the old bond liberated; but where, ex certis indiciis voluntatis, novatio apparet, the foresaid law cited takes not away the same; but, on the contrary, in the last words thereof, it does expressly bear, et generaliter definimus voluntate solum esse, et non lege novandum; which is clear likewise from Salycetus, Fachmeus, Mascandus, and several others, as being founded upon this reason, nil interest verbo an factis quis mentem suam declaret: and therefore Sir George's bond, which came in place of Colonel Stewart's, making only mention thereof in the provision and condition of his bond, that it should not be obligatory until Stewart's bond were retired, and delivered to him, which condition was fulfilled to him in terminis before Rodger's gift, Sir George's bond did thereby become innovate, and he constituted debtor proprio nomine.

The Lords, having ordained Sir George to give his oath upon the time when he granted this new bond, and when Stewart's bond was delivered to him in the performance of the foresaid provision, did find, that it was a clear innovation of the former bond, which was thereby extinguished; and it being done before Rodger's right, it was impossible they could both subsist, and Stewart being no more debtor by the retiring of his bond from Sanderson's assignee, without any translation thereto.

Thereafter they did, of new, allege, that, albeit this bond should be found an innovation, yet it was not equivalent to payment; because an executor granting a new bond, proprio nomine, for the defunct's debt, notwithstanding thereof the creditors of the defunct would make him liable; and the new bond is still subject to a double poinding; otherwise the creditor of the defunct might be frustrated by a new bond of their just debts: and, upon that same reason, a rebel being denounced, and thereby jus acquisitum domino regi to his whole moveable debts, a creditor, by voluntary delivering of his bond, and taking a new security, cannot prejudge the King or his donatar.

It was answered for Pallet, that, notwithstanding, he ought to be preferred; because he was in the case of delegatio; et, Lege octavo digest: ad senatusion, it is expressly declared, that solvit quia reum delegat; and the reason is, that delegatio operates all the effect of payment; so that the first debtor shall never be convened, albeit the person delegated should prove insolvent. Neither can the case of an executor be obtruded; seeing the defunct's creditor doth still remain, notwithstanding of the executor's new bond; so that, if the executor be not discharged, and the old bond retired, any new bond granted by him does not extinguish the defunct's debt; but the creditor may still affect the defunct's whole estate until he be paid: whereas, it is otherwise in the case of a donatar for payment to a lawful creditor by the rebel, either in pecunia numerata or per delegationem, which is equivalent, in law doth extinguish the old debt, the rebel being free, the donatar can never repeat what hath been truly paid.

The Lords did find, that Pallet was in the case of delegation; and, Sir George Maxwell becoming debtor proprio nomine, the donatar to Sanderson's escheat, to whom Sir George was never debtor, could never compete with Pallet, who had right from Brown to Sir George's bond, and therefore preferred Pallet.

Thereafter, upon the 11th of November 1675, the parties being again heard, it was alleged for Veatch and Rodger, that he having only insisted as donatar to Sanderson's escheat, albeit by the foresaid interlocutor Pallet was preferred, as having got an assignation to a debt due to Sanderson by Colonel Stewart, and thereupon had recovered payment, in so far as Sir George Maxwell had become his debtor proprio nomine, and Colonel Stewart was discharged of any debt due by Sanderson or his assignee; yet notwithstanding thereof, Veatch, as having right from Rodger, ought to be preferred; because, by the Act of Parliament 1621, anent bankrupts and divours, the said assignation granted to Sanderson, being made after that Sanderson was charged and denounced rebel, at the instance of Veatch, the same was null; it being expressly provided that any divours can make no voluntary right to any person, in defraud of the lawful and more timely diligence of another creditor, having served inhibition, or used horning, or arrestment, comprising, or other lawful means, duly to affect the divour's lands or goods; in which case it is declared, that the concreditor, who obtained the said voluntary deed, should be obliged to refund the sums whereof he hath recovered payment, by partial favour of the common debtor, and the creditor doing the first diligence should be preferred to him.

Whereupon the Lords did ordain both parties to lead witnesses, and produce other documents, for proving whether or not Sanderson, the common debtor, was lapsus bonis, and to be esteemed a bankrupt the time that he granted the assignation in anno 1649, and thereafter a new assignation in anno 1662, whereupon Sir George Maxwell became debtor proprio nomine; after which, the depositions of the witnesses being read, one whereof did prove, that Sanderson, the time of the first assignation, was out of all credit, and nobody would have trusted him; and that, before the second assignation, there was a gift of his escheat taken at Rodger's instance; and that, by the depositions of several witnesses, he was reputed to be a broken man.

Both parties having given in their informations, the Lords did advise the case, and, by interlocutor, did find, that Rodger and Veatch ought to be preferred to Pallet, upon that ground,—That the assignation made to Brown, his author, fell within the Act of Parliament 1621, and so was null; and that any payment, made by virtue of those assignations, doth not liberate Pallet from repetition, in so far as concerns the sums of money contained in the horning; reserving to Pallet his action of improbation of the principal horning, which was not produced, but only a gift of escheat and decreet of declarator, making mention thereof. Some of the Lords were of another opinion as to the first point of preference, and thought, that the assignation to which Pallet had right, and whereupon he had recovered payment, could not be declared null upon the Act of Parliament, upon these reasons:—1st. That the Act of Parliament was express, that the prior creditor had done more timely diligence, by inhibition, horning, arrestment, comprising, or other lawful means, which might duly affect the divour's lands or goods, or price thereof, to the common debtor's behoof; whereas no such thing can be subsumed in this case, against Pallet, or Brown, his author; seeing the debt due to the common debtor was never affected by any diligence at Rodger's instance, who had only charged, and denounced Sanderson, rebel, but had never arrested or affected the debt due by Stewart, until Pallet had recovered payment, and discharged Colonel Stewart, in contemplation of Sir George Maxwell's new bond, granted proprio nomine, which was found an innovation by the foresaid interlocutor. 2d. The said Act of Parliament, as to any dispositions made by the common debtor, which are declared unlawful, whether they be to conjunct persons or concreditors, supposes that they have done it by fraud for no just price, or of purpose to prefer one creditor to another, who hath done more timely diligence to affect his goods and estate; whereas no such thing can be here subsumed, Pallet's debt being contracted in France, for wine sent home by Brown, a factor, who was in optima fide to take an assignation to a debt due by Colonel Stewart, in Ireland, after he had charged and denounced the common debtor, rebel, before Rodger did get the gift of his escheat, or intented a general declarator; so that if he should be made liable to repetition, it would take away all public trade and commerce; seeing it is impossible that strangers can know if any who deal with them abroad, have been charged or denounced at the instance of a private party, who hath been suffered to trade in his own name, and bring home goods upon his own account, for which they cannot receive a precept or assignation upon others, or any other voluntary deeds for payment of the price of their goods, and thereupon do diligence and recover payment: And not only upon a public account, this were hard for strangers, but even as to subjects within the country, it seems to be against all reason, public trust and commerce, if a prior creditor only charging and denouncing, without affecting the common debtor's goods, or raising caption against him, but suffering him to trade as before, should lie still till other creditors recover payment upon their diligence, that they should be liable to repetition: whereas the Act of Parliament declares, that if, bona fide, a posterior creditor, buying lands or goods from a confident person, who is nowise particeps fraudis, that he can never be questioned, but only the common debtor, or confident person, ratio legis, being only that fraud is committed, or the common debtor's goods affected; and by a practick in Durie, in anno 1623, betwixt William Hamilton and Dick, and by some of late, it was clearly found, That if the common debtor himself make voluntary payment to a lawful creditor, who had denounced for not payment, or had granted an assignation for payment, that the same was not null, and did not fall within the Act of Parliament. And the reason is, that the assignation could not be reputed a voluntary deed, but to have been made of necessity, after charging and denouncing the common debtor rebel; notwithstanding whereof, the greatest part of the Lords were of another opinion. Which seems very hard, seeing, by the former interlocutor, they found, that, notwithstanding both of horning and a decreet of declarator, yet Pallet should be preferred, albeit Veatch was both a creditor and had denounced; and farther, had obtained the gift of his escheat, and a declarator: And as to Sanderson being bankrupt, anno 1649, that appeared only by the deposition of one witness; whereas it was instructed for Pallet, that a decreet was obtained against Stewart for £2000 sterling, which he had affected as said is, having got an assignation thereto; and that, that same year, the wines were sent home to him in his own name, and was a public trafficking merchant, there being neither arrestment nor caption used at Veatch's instance, or any other creditor.

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