Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION IV.

Disposition by a Bankrupt in favour of his whole Creditors.

Bell of Craigfordy
v.
The Trustees for Barclay's Creditors

1727. January.
Case No. No 239.

Ad adjudication allowed to proceed, notwithstanding of disposition omnium bonarum.

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An estate was disponsed to Barclay, under burden of the debts of the disponer. Barclay having become bankrupt, conveyed this estate to trustees for behoof of his creditors. In the trust-deed, no provision was made for payment of the debts of original disponer. The deed contained a submission by the creditors to arbiters named by the bankrupt.

Bell, a creditor of Barclay's author, proceeded to adjudge.

Barclay's Trustee opposed the adjudication; but the Lords decerned.

*** This case is mentioned in the session-papers of the case Cheyne against Merchieston's Creditors, No 240. p. 1204.; where it is said in the petition for the Creditors, that “the Lords were unanimously of opinion in Barclay's case, upon the general point, that it being an useless diligence ought to be stopped; and that though adjudication passed, it was purely upon account of this specialty: That Bell was a creditor of Robert M'Lellan's, who had disponed his estate to Samuel (Barclay) with the burden of his debts; and Samuel being bankrupt, disponed that estate to his creditors, without saving the preference of Robert's creditors, and brought them in only with his own, and obliged them all to submit to arbiters of his chusing. Mr Bell being a creditor of Robert's, and having used inhibition, was preferable to the creditors of Samuel, whose. very right was burdened with Robert's debts. It was purely on that account that the adjudication was allowed to pass. The disposition by Samuel was reducible, at Bell's instance, as cutting off his certain preference. Had it not been for this specialty, the Lords were unanimously inclined to refuse the adjudication.”

In the answers for Cheyne, it is said, “The specialties mentioned in the petition are nothing to the purpose; for albeit Bell, who craved the adjudication, was a creditor of Robert M'Clellan's, who had disponed his estate to Samuel (Barclay) with the burden of his debts; and that Samuel being bankrupt, conveyed the estate to his creditors, without giving a particular preference to Robert's creditors; yet still it was open to Robert's creditors, in the ranking before the arbiters, to claim their preference upon their rights, as much as it was competent, to any other creditor, to claim his preference according to the nature of his right and diligence; so that here there was no iniquitous condition imposed upon the creditors of Robert, more than what arose from the general nature of the thing, and the law of the land, in denying a person access to a diligence authorised by public law, in which he confided more than in the deed of a bankrupt, which may be subject to many objections, besides that found on the act 1696.”

See The Session Papers for 1729, in the case of Cheyne against Creditors of Merchieston, in Advocates' Library.