Decisions upon the clause of the Act of 1696, declaring Heritable Bonds, &c. to be held as granted of the dates of the Sasines taken upon them.
Sir William Maxwell of Springkell, v. Benjamin Bell
Date: 20 December 1758 Case No. No 266.
A person, at clearing accompts with his partner, disponed to him an heritable debt in payment of the balance, by assigning the precept for infeftment. He became bankrupt before infeftment was taken; and a creditor had arrested in the interim. In a competition, urged for the disponee, that the statute applies only to deeds containing an immediate warrant to infeft; and that this was not granted for a prior debt, being a consequence of an accounting between partners. The case was found not to fall under the act of 1696. The Court were chiefly moved by the circumstance of the copartnery.
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William Scott and Benjamin Bell, carried on for many years, a trade of purchasing cattle in Scotland, and felling them in England; which began in the year 1720.
In 1727, they acquired from John Somervel, equally betwixt them, an heritable debt on the estate of Crowdiknow, for L. 350, upon which Somervel had been infeft. The heritable bond and conveyance, in their favour, was produced in the ranking of Crowdiknow's creditors.
Upon the 8th of April 1745, a final clearance was made between them, by a fitted account, in which the whole of this debt was stated to the debit of Bell; and after stating every other article, the balance came out due to Scot by Bell L. 454. A disposition was the same day executed by Scot in favour of Bell, of Scot's share of this debt, assigning him to Somervel's precept. Bell afterwards paid to Scot the balance due by the account.
In the year 1746, Bell put Scot's disposition into the general register.
In 1748, Scot became a bankrupt in terms of the act 1696.
In July 1749, Sir William Maxwell, as creditor to Scot, arrested in the hands of Graham, purchaser of Crowdiknow, in order to affect Scot's share of the annualrents of this debt; and, in February 1750, obtained an adjudication against Scot, in order to attach the debt itself.
In July 1750, Bell took infeftment upon Somervel's precept, which, as to Scot's share of the debt, proceeded upon the disposition 1745.
Sir William Maxwell brought an action of forthcoming upon his arrestment, in the course of which he also produced his adjudication.
Benjamin Bell appeared, and claimed to be preferred upon his disposition from Scot, completed by infeftment in July 1750.
Pleaded for Sir William Maxwell: By the statute 1696, all voluntary dispositions by a bankrupt in favour of his creditor, within sixty days before his bankruptcy, in preference to other creditors, are declared null. And it is further declared, “That all dispositions, heritable bonds, or other heritable rights, where upon infeftment may follow, granted by the foresaid bankrupts, shall only be reckoned as to this case of bankrupt to be of the date of the sesine lawfully taken thereon.” The disposition by Scot to Bell, must therefore be held as of the date of the infeftment taken in July 1750, which was two years after the bankruptcy.
2dly, Sir William is at any rate preferable, upon his arrestment, to the annualrents of the debt preceding July 1749, when the arrestment was used; because the disposition in favour of Bell was not completed by intimation or infeftment before that time.
Answered 1st, The act 1696 only applies to dispositions or heritable bonds, which contain an immediate warrant for infeftment; whereas the disposition by Scot to Bell conveyed only Somervel's precept, upon which the infeftment was afterwards taken. Besides, the disposition by Scot was not granted for security of a prior debt, but for money soon after advanced by Bell. At any rate, the act 1696 cannot apply to this case; for the heritable debt in question was a copartnery-subject, and, at clearing the copartnery accounts, was conveyed to one of the partners, as a distribution of the company-effects; which could not be overturned by the subsequent bankruptcy of either.
2dly, If Bell has right to the heritable debt itself, he must also have right to the annualrents: The disposition in his favour was sufficient to divest Scot without intimation, and must carry the debt and all its advantages.
Replied: It is true, that it was found, in January 1734, Creditors of Scot of Blair contra Charteris, No 262. p. 1239. that the act 1696 did not apply to the case of dispositions not containing immediate warrant for infeftment: That judgment, however, proceeded upon a principle of law, the contrary of which was afterwards established. It was at that time held to be a principle of law, that such dispositions did completely denude the granter. This had been found, 20th November 1733, Sinclair against Sinclair, voce Right in Security; but it was afterwards adjudged and established, 22d June 1737, Bell of Blackwoodhouse, Rem. Dec. v. 2. p. 15. voce Competition, that a posterior disponee to such kind of rights, completing his title by infeftment upon the precept assigned, was preferable to a prior disponee, as being the first who completely denuded the granter: And it must follow, of consequence, that in this case Bell had not denuded Scot, or completed his right, till July 1750, after Scot's bankruptcy. Supposing the conveyance by Scot to Bell to have been granted for a sum advanced, or soon after paid, this would not be a good defence against the reduction on the act 1696; as will appear by the decisions collected on this subject; 29th January and 12th December 1717, Grant contra Duncan, No 259. p. 1228. And upon that point, after a contrary decision, 19th January 1726, Chalmers against Riccarton, No 260. p. 1231. there followed two other cases in terms of the first decision; 19th June 1731, Creditors of Merchiston, No 261. p. 1233.; 25th November 1735, Trustees of Mathison's Creditors, No 263. p. 1240. In each of these three cases, the distinction between nova debita and prior debts, was rejected. Neither is the pretext of a co-partnery a good defence; for in this case there appears to have been no permanent company between Scot and Bell, but a joint trade carried on from year to year, and the profit annually divided. At any rate, this heritable debt was no copartnery-subject, but disponed to them by Somervel, not as partners, but equally betwixt them; and it was not conveyed by Scot to Bell as a distribution of the company-effects, but, in some measure, sold to him for money he was afterwards to pay.
2dly, As to the annualrents, the disposition in favour of Bell did not denude Scot till infeftment was taken; and therefore, till then, the disposition only imported an assignation as to the annualrents, which was not completed by intimation till after the arrestment; for the date of a disposition not completed, can have no effect in a question with third parties. In two similar cases, an arrestment was preferred, as to the rents of lands, to a prior disposition upon which infeftment was not taken till after the arrestment; 22d November 1633, Warnock contra Anderson, Durie, p. 693, voce Competition; 24th June 1642, Lord Forrester contra Castlelaw, Durie, p. 896. voce Competition.
The Court seemed chiefly moved by the defence founded on the copartnery.
‘The Lords found, That Benjamin Bell was preferable to Sir William Maxwell, as to the principal sum and annualrents in question.’ See Competition.
For Sir William Maxwell, Johnstone, Ferguson.Alt. Montgomery.Clerk, Kirkpatrick.
Fol. Dic. v. 3. p. 67. Fac. Col No 151. p. 268.
