Disposition by a Bankrupt in favour of his whole Creditors.
Snodgrass v. The Trustees and Creditors of Beat
Date: 13 November 1744 Case No. No 245.
A person, bankrupt in terms of the statute of 1696, cannot, by a general disposition, tie up the hands of his creditors from subsequent diligence. But however insolvent, if not bankrupt, a disposition to all his creditors equally, if simple and unconditional, cannot be reduced.
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The Lords have come and gone upon the question, How far, where one is bankrupt in terms of the statute, he can, by a general disposition to his creditors; tie them up from after-diligence? and by the latest decisions, it is found, that he cannot. But where there lies no ground of reduction on the statute, there appears no foundation in the common law, upon which a disposition by a man, however insolvent, to all his creditors equally among them, can be reduced.
And accordingly in this case, where David Beat, the debtor, though insolvent, was not bankrupt in terms of the statute, a disposition by him, in favour of trustees, for the behoof of his whole creditors, duly intimated, was preferred to posterior arrestments, and the allegeance repelled, That a person insolvent had it not in his power, by such disposition, to deprive his creditors of their right to obtain a preference to each other vigilantia.
But a few days thereafter, in the competition among the personal creditors of Sir Patrick Murray of Ouchertyre, creditors were found not bound to accept of such disposition, although they had done no diligence, in respect of a clause, declaring the trustees only liable, for their intromissions, and not liable for omissions.
Ibid. The disposition by David Beat, to the trustees, was, found not to fall under the act 1696, in respect he was not under caption at the granting thereof, although he was under an act of warding, the statute specially requiring caption. See No 174. p. 1095.
