Subject_1 COMPENSATION - RETENTION. Subject_2 SECT. XVII.
Effect of Compensation, of Retention, of Re-compensation in instances not included in the Preceding Sections.
Alexander Murray of Brughtoun, v. William M'Guffog of Ruscoe
Date: 23 November 1711 Case No. No 147.
A man, for security of a sum due by heritable bond, getting a tack of some lands, for a duty equal to the annualrent of the sums, at six per cent. and being besides obliged to pay yearly two wedders, and two stones of butter, during the 21 years that the tack was to last; and he never having paid these; in a declarator of extinction and payment, the Lords having first caused liquidate the prices of the wedders and butter, did then find that they could only compensate and impute from the time of the liquidation, and not yearly when they fell due.
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Richard Murray of Brughtoun, debtor to the deceased William M'Guffog of Ruscoe, in 4000 merks, by an heritable bond dated in anno 1675, did, by a tack of the same date, narrating the bond, set to him the lands of Murraytoun and Cullindoch, for payment of 240 merks, two wedders and two stone of butter yearly; with this provision, “That the tacksman should retain in his own hands of the foresaid tack-duty, in so far as will compense and satisfy his annualrents yearly and termly during the not payment of the principal sum.” Alexander Murray, now of Burghtoun, heir to Richard his grand-father, pursued a reduction and declarator of extinction of the heritable bond, by Ruscoe the defender, and his predecessor's possession of the lands several years without paying any tack-duty; and contended, That the prices of the wedders and butter, liquidated in this process, ought to be imputed in payment and satisfaction of Roscoe's principal sum, at the terms they fell due by the tack.
Answered for the defender; Species or corpora cannot compensate money till once they be liquidated, and then the compensation takes place only from the date of the liquidation, 4th December 1675, Watson against Cunningham, No 144. p. 2684; consequently the butter and wedders can compensate and extinguish the defender's principal sum only from the time of the liquidation.
Replied for the pursuer; Where a creditor intromits with goods and effects of his debtor, upon some extrinsic cause, the rules of compensation and liquidadation ought to take place; but it is otherwise in the case of intromission with a subject given in security and payment; as here, where the tacksman was just in the case of an improper wadsetter, whose intromission with the rents doth still impute from the time they are uplifted; and in effect, this extinction doth not so much arise upon the ground of compensation, as of payment.
Duplied for the pursuer; It is frivolous to fancy Ruscoe in the case of an improper wadsetter, for he never entered to possession by virtue of the heritable bond, (which was a transcendent heritable right upon Brughtoun's whole estate) but only by virtue of his tack; by which he had indeed power to retain the tack-duty, in so far as would satisfy his annualrents, but not for payment of his principal sum.
The Lords found, That the compensation upon the butter and wedders, takes effect only from the time of the liquidation.
Fol. Dic. v. 1. p. 167. Forbes, p. 549.*** Fountainhall reports the same case:
Lord Ormiston reported Murray of Brughton contra M'Guffog of Ruscoe. Brughton being debtor to Ruscoe in 4.000 merks, he gives him an heritable bond; and, towards his farther security, he sets him a tack of some lands for 21 years, for payment of 240 merks, with two wedders and two stones of butter; but containing this clause, that he shall retain the said 240 merks of tack-duty, to compense and satisfy the annualrent during the not payment of the said principal sum. Ruscoe having retained the said 240 merks yearly, being the full annualrent of the said 4,000 merks, at six merks per cent. then the current interest; but retention having taken place ever since 1678, some times at five per cent., and then at five and a half; and never having paid the wedders and butter, during the 21 years of the tack, Brughton raises a declarator of payment and extinction of this bond, in so far as Ruscoe had more than the annualrent; 1mo, By the retention; and then by the wedders and butter, which two articles behoved to deduct off the principal sum, and extinguish it pro tanto. A term was assigned to Brughton, to prove the value and price of the wedders and butter. Which being liquidate, he then craved they might be imputed in payment and satisfaction of Ruscoe's principal sum, at each term as they fell due by the tack, to defalk pro tanto; for where one intromits with a corpus or a fungible, the liquidation ex post facto must retrotract and draw back to the time it fell due, especially if there was a mora in paying it debito tempore; for then obligatio crescit ratione moræ. Answered, The value can only be imputed from the time of the liquidation of the price of the butter and wedders, conform to the probation, and the Lords' interlocutor thereon; for money can never be compensed with a species till it be estimate, and so converted into money; and it was so found, 4th December 1675, Watson contra Cunningham, No 144. p. 2684. And Stair, tit. Liberation from Obligations, is express, that farms and services can only compense clear bonds from the date of their liquidation, and no sooner, unless it were money-rent. Put the case, a master is owing his tenant 1,000 merks by bond, the tenant is again debtor to him in a year's rent, (of ten chalders of victual), the tenant requires his money, will any lawyer say, the master will get immediate compensation to stop execution on his bond because his tenant owes him? For a corpus and a liquid sum are not compensable, being of different kinds; and therefore the master must first obtain the sentence of a Judge, liquidating the victual to a certain price, and then only, and not till then, will the compensation meet. The Lords found, the wedders and butter could only compense and impute from the time of the liquidation, and not yearly, when they fell due. This imputation makes a great difference in the way of counting; for, as Brughton pleaded, it would have extinguished every year so much of the principal sors; but by this interlocutor, it only diminishes from the time of advising the liquidation; whereas in 21 years time (which was the currency of the tack), an annual imputation would have absorbed much of the sum, which an application now from this date leaves yet entire.
