Subject_1 DECISIONS of the LORDS OF COUNCIL AND SESSION, reported by SIR JOHN LAUDER OF FOUNTAINHALL. Subject_2 I sat in the Outer-House this week.
The Creditors of Henry Panton of Hilton v. Robert Panton, Factor at Campvere, his Brother
Date: 1 January 1706
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In the competition among them for the maills and duties; Robert craving preference to the litster hospital of Aberdeen and other creditors, for the sum of £47,000 Scots, both as infeft and as donatar to his brother's liferent-escheat,—it was alleged, That, besides the ordinary backbond given by him at obtaining of the said gift, upon an application of the creditors, representing the latency and suspicion of his debts, the Lords of the Treasury had taken a separate backbond, obliging him, in case it were found that any of the debts then acclaimed by him, as due by Hilton his brother, were collusive and fraudulent, that he should be excluded from the benefit of the escheat for the quadruples. And now it appears, that, by his stated accounts, he charges his brother with 4000 guilders; though, by a discharge subsequent to this article, viz. in May 1698, he declares the rumours spread abroad of his brother's being debtor to him were false; and therefore discharged him of all debts preceding that day: and yet this 4000 guilders is prior, and so he has incurred the penalty and certification of his bond; and they, as having taken a second gift, have right thereto, and are preferable to him.
Answered,—This bond is of a very extraordinary nature; and has been im-petrated from him ere he could obtain the gift, and ought not to be extended. And, to show that he could have no design of defrauding his brother's creditors, he had paid an infeftment which Colonel Buchan had for 3 or 4000 merks, upon a simple discharge and renunciation, without so much as taking a positive right or conveyance for keeping it up.
The Lords found his bond, in so far as extended to those articles prior to the general discharge, was collusive and fraudulent; and brought him under the compass of his backbond to the exchequer. Then the debate arose, That this being penal, what should be its effect and extent? And it was contended for Robert Panton, That the most it could import was, to lay aside the said 4000 guilders, and three times more of his sums, which makes up the penal quadruple; and, esto that were done, he had still £23,000 of his debt of £47,000 to burden the escheat. And, his debt being so restricted, he behoved to be preferable to all his brother's creditors for that.
Answered for them,—That expounding the backbond in that sense was, instead of winning, truly to make them lose both their debts and the cause; for the bringing him in for the remaining £23,000 Scots before them, did as much drown and exhaust the estate as when he had the whole £47,000 to burden it with. And, though he pretends that, when he gave the discharge, he had effects and goods of his brother's consigned to him worth the said 4000 guilders, yet it is evident that discharge was given with an affected design, to entrap creditors, and to induce them to trust his brother.
The Lords, by the President's vote, found Robert was only obliged to deduce the quadruple of that sum; and, being so restricted, that he might use the gift of escheat to give him a preference for the remainder of his sum. Some had a jealousy of the reality of his debts; they being inter conjunctas personas, and contracted in the space of eighteen months after the foresaid general discharge, and that they might be quarrelled on the Act of Parliament 1621, but he offered to astruct them all by current accounts and bills betwixt his brother and him in the way of trade and correspondence.
