Subject_1 ARRESTMENT. Subject_2 Upon what Debts Arrestment may be Founded.
William Ker of Chatto, v. Walter Scot of Well, and Other Creditors of Sir William and Robert Scots of Harden
Date: 17 June 1712 Case No. No 22.
An heritable bond, before infeftment, may be the foundation of an arrestment.
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The deceased Robert Scot of Harden having, as heir, served and retoured in in general, and executor to Sir William Scot of Harden, his brother, disponed to William Ker of Chatto, his brother-in-law, all debts, heritable and moveable, goods and gear owing and belonging to him: Chatto raised a process of declarator and payment. Wherein Walter Scot of Well, and other creditors of Sir William Scot, compearing, claimed preference to Chatto upon the act 24, Parl. 1661: In regard he derived right only from Robert Scot, Sir William's heir, and they were creditors to Sir William, who had used diligence within three years after his death.
Alleged for Chatto, the pursuer: 1mo, The act of Parliament 1661, (which is a correctory law, and to be strictly interpreted) concerns only right of lands. For as to moveables, all confirming within six months of the debtor's decease come in pari passu. 2do, Sir William's creditors can have no preference, because they have not within the three years used any complete diligence by apprising or adjudication, poinding, or decreet of furthcoming, Stair, Instit. B. 4. tit. 35. § 14. For, if inchoate diligence within three years were sufficient, if perfected thereafter, it might come to found a preference for thirty years, which is absurd. Nor doth it avail them that they were interrupted in the completing of their diligence by Robert Scot's death: Since the prescription of three years doth run contra non valentes agere; December 19, 1678, Paterson against Bruce*. 3tio, The act concerns only the competition of legal diligence. For, if creditors do not secure themselves by diligence, within a year after their debtor's decease, his heir may dispone as he pleaseth; as appears from a clause in the end of the statute, annulling only dispositions granted by an heir within year and day after the predecessor's death; and the disposition was made to the pursuer after the year and day. Now, as an apparent heir cannot wrong his predecessor's creditors by a voluntary right within the year, he may e contrario effectually dispone after elapsing thereof, if the defunct's creditors have not consulted their own security, by inhibition, a charge to enter heir, or arrestment, which might be done intra, annum deliberandi, See Stair, B. 4.tit. 35.
Answered for the defenders: 1mo, The act of Parliament is conceived in general terms against the deeds of heirs; which word heirs, comprehends the representatives, in moveables as well as heritage: As a bond granted to heirs and successors would belong to the executors and nearest of kin, unless expressly excluded. There is equal reason to extend this interpretation to the successor in moveables as well as heritage: It being no less unreasonable, that the nearest of kin's creditor's should carry off the executry in prejudice of the defunct's creditors, than that the creditors of his heir should affect the heritage to the prejudice of his own creditors. Besides, the disposition to Chatto contains not only moveables, but all heritable sums, as to which the act of Parliament doth unquestionably take place. 2do, The act doth not require complete diligence within the three years, for it may often fall out, that diligence cannot be completed in that time: 'Tis true, the bare commencement of diligence, within three years, would
* Stair, v. 2. p. 659. voce Creditors of a Defunct.
not be sufficient, if the user of the diligence fell in mora, which is the reason of my Lord's Stair's opinion: But if a creditor, in cursu diligentiæ, be interrupted by an accident which could not be provided against, (as Chatto was by Robert Scot's dying before the three years were expired), the act could not be interpreted to exclude such diligence from the benefit thereof. Nor doth the decision betwixt Paterson and Bruce come up to this case; for there diligence was not so much as commenced within the three years, 3tio, One using diligence within the three years may reduce dispositions or legal diligence to his prejudice: But dispositions of that nature, within year and day, are, ipso jure, null, and may be quarrelled at all times even by creditors who had omitted diligence within the triennium. And it were absurd to imagine, that creditors of the apparent heir, who could not, within three years, affect the defunct's estate, to the prejudice of his creditors, might prejudice them by taking voluntary rights from the heir after year and day.
The Lords found, That the act of Parliament 1661 doth not concern this case; and therefore repelled the ground of preference founded thereon.
2do, Alleged for the defenders: The disposition omnium, bonorum by Robert Scot to the pursuer, his own brother-in-law, is null, unless the onerous cause thereof be instructed.
Replied for the pursuer, The disposition must stand good, because the disponer had a visible estate (besides the subject disponed) sufficient to pay all his debts.
The Lords found, That the disposition, being inter conjunctas, is reducible, unless Chatto shew a separate unincumbered estate sufficient to satisfy all Sir William's creditors.
3tio, Alleged for the defenders: They ought to be preferred, because of their timely diligence by arrestment before the disposition.
Replied for the pursuer: This can be no ground of preference upon the act of Parliament 1621; because that statute presupposeth the granter of a disposition to be bankrupt, which Robert Scot was not. 2do, The arrestment being only upon a dependence for an heritable sum secured by infeftment, or at least an obligement to infeft, it could not be the ground of arrestment, unless made moveable by a charge.—Stair, Instit. lib. 3. tit. 1. § 27.
Duplied for the defenders, 1mo, Though Robert Scot was not absolutely bankrupt, yet he had no other subject of estate which his other creditors had ready access to affect, 2do, The arrestment upon the dependence became liquid by a decreet, which rendered the heritable sum a habile subject to arrest for. And as the Viscount of Stair observes, That sums heritably secured, without actual infeftment, are arrestable: So, a pari, heritable bonds, whereupon infeftment has not followed, (as in this case), may be the foundation of arrestment. But then the question is not, whether this be a preferable arrestment in competition with the diligence of other creditors; but whether it be sufficient, in the terms of the act 1621, to obviate posterior voluntary gratifications, which an inchoate diligence may do.
The Lords found, That the defender's arrestment, prior to the disposition, ought to be preferred thereto.
4to, Alleged for the defenders: They being donatars to the escheat of Robert Scot, must be preferred to the disposition of the escheat goods granted by him after he was denounced and registered at the horn.
Replied for the pursuer, 1mo, The gift of escheat is null; in respect Robert Scot was charged at his house of Elistoun, and denounced at Selkirk, when he was actually residing with his family at Edinburgh, where he had been for sixty days before. 2do, The disposition was completed by intimation and citation before obtaining of the gift, which, as it would have secured the debtor's paying, should afford preference as if payment had been made.
Duplied for the defenders: If the charge or denunciation were not orderly, the pursuer may reduce, as accords. 2do, No voluntary conveyance, by one registered at the horn, is valid against the Fisk, whether completed or not before the gift; and there is a great difference betwixt payments made by debtor's bona fide, and a competition upon a null right.
The Lords preferred; Sir William's creditors as donatars of escheat: reserving reduction, as accords.
5to, Alleged for the defenders: The pursuer, who was cautioner for Robert Scot in Sir William's confirmed testament, could not take a disposition to the goods confirmed in prejudice of Sir William's creditors, to whom his executry was to be made furthcoming.
Replied for the pursuer: His getting right to the goods and debts confirmed, doth not assoilzie him from his cautionry; but when pursued, eo nomine, he will have this defence, That he cannot be liable till the representatives of the executor be first discussed; and there is an unaffected estate for payment of all these debts. And seeing Robert Scot, who had right to the executry established in his person, might have disponed it to any stranger; what hindered him to convey it to Chatto?
Duplied for the defenders: Without determining how far an executor could convey the executry-goods to the prejudice of the defunct's creditors, it is plain he could not do it to his cautioner; for the design of caution is to make them furthcoming to the creditors, legataries, &c. Et quem de evictione tenet actio, multo magis agentem, repellet exceptio. Consequently it is needless to debate how far he would have beneficium discussionis: There being a great difference betwixt a pursuit against an executor's cautioner, and an incident competition about the executry, where the cautioner claiming preference may be debarred personali objectione.
The Lords found, That the pursuer, being cautioner in the confimed testament, could not accept a disposition to all the confirmed goods, so as to make them his own property. (See Bankrupt. See Creditors of a Defunct. See Litigious, by denunciation.)
