A preferable creditor can do no voluntary deed to prefer one secondary creditor to another; and if he take payment out of one subject, he is bound to assign to postponed creditors.
William Kennedy of Daljarroch v. John Vans, and Hugh Crawford, Merchants in Ayr
Date: 24 February 1708 Case No. No 24.
A creditor, by bond, in which three persons were bound as co-principals, being the first arrester of a subject belonging to of his debtors, was found not obliged to assign his bond to the other arresters, for recovering from the other two co-principals the superplus paid to him out of the common debtor's effects, more than his third share, altho' relief of two-thirds was competent to the common debtor himself against these co-principals.
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In the competition betwixt John Vans and Hugh Crawford, as arresters of a share in the African stock belonging to David Ferguson their debtor, and William Kennedy of Daljarroch, who had also arrested the same as creditor to David Ferguson per bond, wherein he, Thomas M'Jarrow, and John Ferguson stood bound co-principals; Daljarroch being preferred, and thereby having recovered payment of all that was due to him, John Vans and Hugh Crawford craved that he might be decerned to assign his bond to them, for recovering, off the other two co-principals therein, the superplus of what was paid out of David Ferguson's effects more than this third share; in respect Vans and Crawford, as come in David Ferguson their debtor's place, should have the same relief that was competent to him.
Alleged for Daljarroch: He is not bound to assign the relief competent to David Ferguson against these bound with him; in respect the competitors neither derive right thereto from David Ferguson, nor have affected the same by legal diligence? for their being frustrated of payment out of the equivalent by Daljarroch's preference, entitles them only to seek assignation of his debt and diligence for operating their payment out of other effects belonging to the common debtor; but Daljarroch is not obliged to assign his right and diligence in so far as concerns third parties to whom Vans and Crawford are not creditors.
Answered for Vans and Crawford: In all competitions of creditors, where one having double security for his money, restricts his payment to one subject, and thereby excludes a co-creditor who had affected that subject, the creditor preferred is obliged to assign what further security he had to the other, though that other had not affected that additional security by diligence.
The Lords found, That Daljarroch is not bound to assign; because, Vans and Crawford had not affected by diligence the clause of relief in the bond granted to him.
