Scottish Court of Session Decisions

Subject_1 BANKRUPT.
Subject_2 DIVISION II.

Alienation after Diligence.
Subject_3 SECTION I.

What Sort of Deeds reducible upon the Head of the Statute 1621, which protects inchoated Diligence.

Competition betwixt John Wodrop, Trustee for the Creditors of Grierson and Gairns, Merchants in Edinburgh, and Messrs Fairholm and Alexander Arbuthnot and Company

1744. February.
Case No. No 125.

An eventual claim of damage, was assigned before decree had been obtained. Arrestment had likewise been used, both before decree and before the assignation, The assignation reduced on account of prior diligence, and the arresters preferred.

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Grierson and Gairns having shipped a cargo of brandy, &c. from Holland for Norway, the ship was driven (by stress of weather) up the Forth, where John M'Naughton, collector of the customs at Anstruther, seized the same as run goods: Upon which the owners brought an action of trespass against him before the Court of Exchequer, concluding for damages, for unlawfully seizing their property. This cause came on in Candlemas term 1741-2, and on Whitsunday term thereafter; in both which terms it was put off at the defendant's request, he paying costs of suit. At last, on Whitsunday term 1743, the cause was determined, when the plaintiffs recovered a verdict for 210l. Sterling of damages and likewise 55l. Sterling for costs of suit.

In August 1742, Messrs Fairholm and Arbuthnot and Company, being creditors to Grierson and Gairns, arrested in the hands of M'Naughton all sums due by him to their debtor; and, on the 14th of June 1743, Grierson and Gairns assigned over this claim against M'Naughton, to their creditors; which assignation was intimate the next day: Arrestment was likewise used by Alexander Arbuthnot and Company, in the hands of M'Naughton, on the 17th June 1743. These claimants having intimated their claims to M'Naughton, he raised a multiplepoinding.

For the trustee it was pleaded, That he ought to be preferred to Messrs Fairholm and Arbuthnot, because the arrestee was not debtor to the common debtor at the date of their arrestments, which were laid on long before the judgment given in Exchequer; which, was evident from this, that the common debtors might have desisted from the action, or might have discharged the same against the arrestee; in either of, which cases the arresters could have had no remedy. The verdict of the jury, did indeed constitute him a debtor in a special sum therein expressed; but this was done posterior to the arrester's diligence; and that it is triti juris, if the arrestee is not debtor to the common debtor, the time of the arrestment, no supervenient debt will be affected by the prior arrestment, which arises from the conception of the diligence, rendering litigious the effects of the common debtor in the hands of the arrestee, only at the very point of time it is laid on, and has no concern with what happened before, or is to pass afterwards.

In the next place, the trustee ought likewise to be preferred, in virtue of his assignation, to the arresters, with respect to the sum awarded in name of costs of suit; not only for the reasons already given, but likewise, respect no part of these costs of suit were laid out at the date of the arrestments, nor for ten months thereafter. That it was not easy to discover, how an arrestment laid on, not only before these expences were modified by a judge, but before any part of them were incurred, or laid out by the common debtors, could be the foundation of a furthcoming for these expences or costs. That arrestments did not reach acquirenda was certain; and, that the common debtor had no right to them till they were modified by a proper judge, was equally certain: Surely they had no title to demand them from the arrestee until they were laid out; consequently the arresters (who must put themselves in their place) can have no right whatever to these expences.

For Messrs Fairholm and Arbuthnot, arresters, it was pleaded, That the assignation granted by the common debtors to the trustee, was the deed of persons insolvent, under diligence of horning and caption at the time, clearly in defraud of the arrester's diligence, and to convey away the subjects, to their prejudice, to other creditors whom the disponers favoured more, and who had done no diligence at all; and therefore the assignation, though it might denude the cedent, could not be set up to compete with the diligence of any lawful creditor, far less with them, in defraud of whose more timely diligence the assignation was made, only two days before the judgment was recovered; and, that the assignation was granted on purpose to exclude their arrestments, is evident from a clause therein, which debars such creditors as did not pass from their diligence, from having any benefit thereby, so that it was plain the assignation was null, and reducible on the act 1621. If this point is with the arresters, as they apprehend it is, it supersedes entering into the argument, How far arrestment was proper and habile before judgment actually recovered? and particularly, Whether it can carry the Sum awarded for costs, which are said to have been incurred after the arrestment was used, as they used another arrestment after judgment had been recovered, which must for certain carry the subject, if the assignation is null? But, supposing it was not null, they apprehend that arrestment was competent during the dependence; and, as their arrestment was long prior to the assignation, it must give right to what came afterwards to be decerned, in name of damages and costs. Here it may be proper to observe, that the assignation itself was prior to the judgment, as well as the arrestment. And it would be a very extraordinary doctrine, that a debtor should be possessed of a right, which he might convey by voluntary assignment; and yet that right was not affectable by the diligence of his creditors. Every subject a debtor is possessed of, and every claim he has, is affectable by some one diligence or other, for payment of his debts: And, as arrestment was the only diligence for affecting this claim that Gairns and Grierson had against M'Naughton for seizing their goods, the arrestment was therefore habile and competent, and did state the creditors in the right of their debtor: It was indeed uncertain before judgment, whether M'Naughton Was debtor to Gairns and Grierson; for, if he had been acquitted, all demand must have ceased: But the claim, such as it was at the time, was carried by the arrestment; and the arresters had right to whatever came in the event to be decerned to Gairns and Grierson; nor can it be admitted that they could have desisted or discharged their action after arrestment was used, to the prejudice of the arresters, who had right, as judicial assignees, to have followed furth the claim competent to their debtor. See 12th June 1734, Snee, infra h. t. 3d February 1736, Earl of Aberdeen, infra h. t.

The Lords, found the assignation reducible upon the act 1621, there having been diligence by horning at Messrs Fairholm and Arbuthnot, and Alexander Arbuthnot's instance, prior to the granting of the assignation; and preferred the arresters.

C. Home, No 263. p. 421.