Whether an inhibition could connect with an adjudication, led upon a bond of corroboration of the bond upon which the inhibition proceeded? Found it could not.
Click here to view a pdf copy of this documet : PDF Copy
In the ranking of the Creditors of Thomas Cranston of Birkhillside, the interests stood thus:—Horsburgh of that ilk was creditor by a personal bond, dated in May 1727, with inhibition upon it in March 1728, and Henry Davidson was creditor by an heritable bond, dated in August 1728, whereon he was infeft, and his sasine registrated in October thereafter; and, in the third place Horsburgh had an heritable bond of corroboration, dated March 1731, on which he was infeft in May 1732, for the sum of L. 2546: 16: 8, made up of the principal sum and annualrents in the bond first mentioned, on which the inhibition had proceeded, and of a separate personal debt of L. 360, and annualrents due thereon; and in the year 1736, several other creditors, by personal bonds, led adjudications, as did also Horsburgh, upon the personal obligation contained in the said heritable bond for the accumulated sum of L. 3727: 16:10 Scots money.
In the decree of ranking, Davidson was preferred primo loco, as the first real creditor, and Horsburgh secundo loco, as the only other real creditor; and as the fund was not sufficient to pay the two real debts, the adjudgers were entirely cut out, and also Horsburgh's draught fell considerably short of his payment. But then as Davidson's infeftment was by the decree of ranking found to be reducible at Horsburgh's instance ex capite inhibitionis, Horsburgh proposed at making up the scheme of division, to draw back in virtue of his inhibition what his draught fell short of the sum, principal and annualrents contained in the bond 1727, on which his inhibition proceeded. And there was no doubt made but that he would have been so entitled, had he adjudged upon the bond on which the inhibition proceeded; but as he had only adjudged upon the personal obligation contained in his bond of corroboration, the framer of the scheme was of opinion, that his adjudication did not connect with his inhibition, for that nothing could connect with it but an adjudication led upon the debt, which was the ground of it; but that were such adjudication to be now led, it could draw nothing, as it would be excluded by the other anterior adjudications led upon debts contracted prior to the inhibition; and therefore, as the only operation of an adjudication is to save the inhibiter from suffering any prejudice from the debt struck at by the inhibition, it could in this case have no operation at all, as he suffered no prejudice by it; seeing, although no such debt were in the field, he would be cut out by the other adjudgers; and accordingly the scheme of division was framed, giving Horsburgh no benefit by his inhibition.
To this scheme Horsburgh objected as erroneous in two respects: 1st, That it did not admit the adjudication upon the bond of corroboration to connect with the inhibition, which, as it comprehended the debt on which the inhibition proceeded, and might therefore with propriety be said to have been led upon that debt, was pleaded to connect with the inhibition, no less than if it had been an adjudication specially led upon the debt itself. —And 2dly, That it proceeded upon a supposal, that nothing could connect with an inhibition, but an adjudication led upon the debt which was the ground of it; whereas, an heritable security, voluntarily given for the debt, which was the ground of the inhibition, was said to be as effectual to connect with the inhibition as an adjudication led upon it; and such was Horsburgh's heritable bond of corroboration.
But neither of these objections weighed with the Lords, who, though they disapproved of the scheme of division, as is to be hereafter mentioned, yet, so far agreed in opinion with the framer of the scheme, that neither the adjudication on the bond of corroboration, nor the voluntary real security could connect with the inhibition. They considered an inhibition as the creature of the law, and as such, having no other effect than practice has given it; and that as an inhibition has never been known to save any thing but that very document of debt on which it is led, and for which the stile of an inhibition was used as a proof, which is, “That the debtor grant no deeds which may prejudge the complainer anent the fulfilling to him of the obligations, decrees or processes produced to the Lords;” so it is absolutely established, that it has effect against all voluntary deeds; and it was said, that by the same rule that an adjudication upon a bond of corroboration, or a voluntary infeftment on such corroboration, would connect with an inhibition upon the original bond, the same must also obtain with respect to an adjudication or voluntary security following on all innovations or transactions whatsoever concerning the debt, which was the ground of the inhibition; which would be quite a novelty.
Neither did the Lords refuse it be a rule, as to the operation of an inhibition, that the debt struck at by it could only be challenged by the inhibiter, in so far as he was thereby prejudiced; and had that rule been thought to apply in this case, the scheme of division would have been approved of.
But the Lords were of opinion, that it did not apply; as the framer of the scheme had not considered, that were an adjudication to be yet led on the original bond, it would be effectual to recover the inhibiter's payment, notwithstanding the other adjudications already led on debts prior to the inhibition, because these former adjudications would be excluded by the infeftment on the bond of corroboration, and consequently barred from quarrelling the adjudication supposed to be yet led on the original bond; and it would be incompetent for Davidson, as having a prior infeftment, to oppose Horsburgh's setting aside the other adjudications upon his posterior infeftment, as that was jus tertii to Davidson, whose infeftment, though prior, was struck at by the inhibition.
And accordingly the Lords found, 'That Henry Davidson could make no use of his infeftment to the prejudice of the bond on which the inhibition was led; and that therefore Horsburgh was preferable to, and must draw back from Davidson the principal sum and annualrents contained in the bond on which the inhibition was led; and appointed the scheme to be made out accordingly.'
N. B. Though the present decision proceeded on the supposal, that an adjudication still to be led on the original bond would be effectual, yet it was the opinion of the Court, that it was not necessary that such adjudication should be led, as the inhibiter had already adjudged upon the bond of corroboration, agreeable to what the Lords had found in other cases; and in that sense, they on this occasion explained the decision, 27th June 1745, Rutherford contra Stewart, No 47. p. 6973. as not determining Mrs Stewart's adjudication to be effectual, though led upon a bond of corroboration granted after Bowland's inhibition, but only as determining, that since were she to lead an adjudication on her orinal bond, which was prior to the inhibition, it would be effectual, it was unnecessary to put her to that trouble, when she had adjudged already upon the bond of corroboration.
Kilkerran, (Inhibition.) No 13. p. 291.
*** See D. Falconer's report of this case, voce Competition, No 103. p. 2901.
