Scottish Court of Session Decisions

Subject_1 DECISIONS of the LORDS OF COUNCIL AND SESSION, collected by JAMES BURNETT, LORD MONBODDO.

Kair
v.
M'Kell

Date: 30 July 1766

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[Kaimes, No. 249.]

The unanimous opinion of the Court in this case was, setting aside all specialties, that a disposition to a trustee for behoof of all the creditors, and with the consent of the creditors, by a debtor insolvent, but not bankrupt, in terms of the Act 1696, is effectual to stop the diligence of any one creditor not acceding. The contrary of this was decided in sundry cases, particularly in the late case of M'Vicar, and the still later case of Moodie against Dickson, solemnly decided but last year. What moved the Lords seemed to be that the Act 1621 did not hinder an insolvent person to give, in solutum, to any one of his creditors, any particular subject, provided it was not in prejudice of the prior diligence of any other creditor,—which was not the case here; whereas, by the Act 1696, he is barred from giving any subject to any creditor either for payment or security. Now, if he can give any one subject to any one creditor for his payment, he can give all his subjects to all his creditors, or to as many as are willing to accept of them, to be divided among them pro rata of their debts. And if any of the creditors stands out, and will not accept of such disposition, then his share remains with the common debtor, and may be affected by diligence, but he cannot touch the share of any of the creditors who have accepted of the trust-disposition. This was the argument that prevailed with the Lords to-day; but the argument that prevailed with them in the former cases was, that a trust-disposition is a gratuitous, or at least a voluntary deed, and it is so far in prejudice of any creditor not acceding, that it bars him from evicting by diligence any part of his debtor’s subjects that be can reach, and obliges him to submit to the administration of a trustee that he would not choose.