Acquisitions made by a Partner relating to the Society. - Contribution of Pains instead of Stock. - Nature of the Stock of a Company.
Alexander Alison, Writer to the Signet, v. The Directors of the African Company
Date: 18 March 1707 Case No. No. 12.
Share of the capital stock of a company, which by the contract was declared not to be arrestable, was found arrestable at the instance of the proprietor's creditor, in order to oblige the directors to transfer the same in the ordinary way in favour of the arrester.
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Alexander Alison having, as creditor to Henry Crawford, merchant in Dundee, one of the joint adventurers in the African Company, arrested in the hands of the Directors and the Cashier, he pursued a forthcoming, and a declarator of right to the subject.
Alleged for the defenders: 1. Whatever come of the subject arrested, they cannot be decerned personally to make forthcoming. 2. The act 1695, establishing the Company, declares, that no part of the joint stock shall be liable to arrestment, and that the property shall only be conveyed by transfers in their books, except the share of profit belonging to any particular member, which may be affected by the real diligence of creditors, and arrestment is not a real diligence.
Replied for the pursuer: 1. That he doth not insist to have the defenders liable personally, but only ratione officii. 2. Though voluntary conveyances can only be made by transfers, the subject may be affected by the real diligence of creditors; and arrestment (which is a nexus realis upon the subject) is certainly such a habile diligence. Albeit for the general advantage of the nation, and encouragement of that trade, the Parliament declared the stock not upliftable; res devenit in alium casum, the Company being dissolved in diem by law, and the stock with interest to be paid unto the respective adventurers and proprietors.
Duplied for the defenders: The money to be paid in for the capital stock and interest not being yet in the company's hands, no arrestment thereof can be effectual.
Triplied for the pursuer: Arrestment upon a subject inchoately habile, subsists after it becomes fully habile; as a creditor arresting a sum due upon a wadset before redemption, is preferable to a second arrester after redemption, Dirltoun's Questions, Tit. Arrestment of Conditional Debts. Arrestment of the price of lands after a verbal agreement, was sustained after the bargain was reduced in writ, Stair, Lib. 3. Tit. 2. N. 29; and there are many decisions sustaining arrestment, currente termino, of what may be due to a liferentrix, upon her surviving the term.
The Lords found the pursuer's arrestment to be a habile diligence fo affecting his debtor's share both principal and interest in the African Company, in order to oblige the Directors to transfer the same in his favours after the ordinary form.
Forbes, p. 153.
*** Fountainhall's report of this case is No. 43. p. 707. voce Arrestment.
