Whether the sale understood a lump bargain or by rental. When subjects turn out disconform to the rental. When part of the subject has been evicted. Relief to a purchaser for an incumbrance not known at the time of sale.
John Buchanan of London, Merchant, v. Robert Jamieson, Writer to the Signet
Date: 16 January 1765 Case No. No 28.
It being unknown, at the judicial sale of a house, that it had been insured with the E. dinburgh Company, and a bond granted for the premium, the purchaser found not entitled to insist that the creditors should relieve him of that bond.
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Some houses in Wardrobe's Court were brought to a judicial sale by Mr Buchanan, and purchased by Mr Jamieson, without either party knowing that the houses had been insured with the Edinburgh Friendly Insurance Company, at L. 3200 Scots, for one-fifteenth of which, as the premium of insurance, a bond had been granted, which, with seven years interest on it, remained unpaid.
Mr Jamieson, upon discovering this bond, which, by registration, in terms of the 1st act Geo. II. cap. 22. had become a real incumbrance on the subjects, insisted that the creditors should relieve him, or that he should be allowed to relieve himself of it out of the price, as by the decreet of sale, he is vested with every right which the bankrupt had in his person to the subject sold; and it is further declared, that the purchasers, and subjects purchased, on payment of the prices, “are freed, disburdened, and discharged, of all debts and deeds of the said deceased James Wardrop, and his author's and predecessors, from whom he derived right.”
Answered for Mr Buchanan: Qui habet commodum, eundem sequi debet et incommodum; therefore Mr Jamieson ought not to have the benefit of the insurance, without being obliged to pay the premium. The fallacy of his argument lies in supposing these to be separate and unconnected, whereas they are co-relatives, the one being the condition of the other; and, upon a general view, the insurance must be considered as an equal bargain between the insurers and the insured. Hence, had the Lords known the subjects were insured, and the premium not paid, when they set a price on them, that circumstance would have made no variation. Or, suppose the premium had been paid up, for the same reason it would have been added to the price; and, for the same reason, Mr Jamieson, had he known of the insurance, would have offered as much as he did, though the bond was not paid; or, had it been paid, would have given just so much more purchase-money.
Replied for Mr Jamieson, The benefit of insurance, and payment of the premium are not inseparably connected. The moment a house is insured, the benefit of insurance follows the subject, and transmits to singular successors; but it is not till the bond is recorded in terms of the statute, that a real lien is created on the subject. Should, therefore, the insurance-company neglect to register such bond properly, the subject would be insured, but not encumbered; so that a singular succesor would have the benefit of the insurance, but the company would have nothing but a personal action for the premium against the granter of the bond. Suppose the proprietor of an estate has acquired a right of casting peats on a neighbouring moss, or the like, for a sum of money, for which he had granted heritable security on his estate, the purchaser, at a judicial sale of his estate, would be undoubtedly entitled to the servitude, and yet to have the estate disburdened of the heritable security. Mr Jamieson is precisely in the same situation. Purchasers must satisfy themselves as to the rental and apparent state of the subjects; but they are not obliged to search for incumbrances, against which the decreet of sale is held to be a sufficient security.
The Lord Ordinary found Mr Jamieson “entitled to the benefit of the insurance from and after his entry; but that the creditors are entitled to any dividends due preceding that term, and must free and relieve the purchaser of any annualrents due on the premium of insurance preceding his entry.”
Mr Jamieson having preferred a representation against this interlocutor, which virtually over-ruled his plea, the Lord Ordinary took the cause to report; and “the Lords adhered.”
For Jamieson, Rae, Maclaurin.Alt. Jo. Swinton, jun,Reporter, Lord Justice Clerk.Clerk,—————.
Fol. Dic. v. 4. p. 211. Fac. Col. No 1. p. 1.
