Scottish Court of Session Decisions

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

Creditors of Ewart

Date: 5 August 1766

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This man Ewart, when he found himself bankrupt, went to some of his creditors, who were his nearest friends, and informed them of his situation, and with respect to one of them he went so far as to indorse certain bills to him for his payment; but the creditor, knowing that these indorsations would be reducible upon the Act 1696, arrested in the hands of the debtors in those bills, and the question was, Whether he was to be preferred upon these arrestments, or the other Creditors to come in pari passu with him?

It was allowed by all the Lords that this case fell neither under the Act 1621, nor the Act 1696; but Lord Pitfour said that there were frauds in tills matter at common law, which fell not under either of those statutes: Such was the case of a disposition omnium bonorum by a debtor to any one creditor, which was reducible, because there was fraus in re ipsa, not upon the statute, but only to the effect of correcting the iniquity, by making it a disposition in favour of all the creditors. Such was the case of Sir Archibald Grant and Tilly four in 1748; and such also was the case of Brown and Gillespie, in 1754, and which comes up to this case, for there Brown, the bankrupt, made a sale of certain of his subjects to a brother-in-law of his, for an adequate price indeed, but which some of his creditors, being his friends and nearest relations, immediately arrested in the hands of the purchaser, but the Lords would give them no preference upon this transaction. which they understood to be collusive betwixt the debtor and them. The case was also quoted of processes of forthcoming upon arrestments, in some of which the principal debtor allows decreets to go easily in behalf of the favourite creditors, while he makes opposition to others; notwithstanding which the Court brings them all in pari passu, that it may not be in the power of the debtor partially to prefer one creditor to another.

On the other hand, it was said, that there was no law to stop the diligence of creditors, and that it was impossible to know where to stop if the Court should enter into an inquiry where the creditors have got the information which directed them in leading their diligence. It carried, by the President’s casting vote, to bring in the arrester and the other creditors pari passu;—dissent. Auchinleck, Coalston, and Alemore.

This judgment adhered to by a great majority, 16th December 1766.

It was said that another arrester had got his information from the debtor, and it was also objected to his arrestment that it was laid upon an admiral precept, when the cause was neither mercantile nor maritime. But as the Lords differed upon this last point, and as it did not appear but the creditor might have been otherwise informed of his debt, it carried, by a majority of one, to repel the objection to his arrestment.

N.B. Lord Pitfour said, that, in the case of reduction, upon the Act of Parliament I696, the alienation ought not to be reduced in totum, but only so far as it was in prejudice of the other creditors, as in the case of a disposition omnium bonorum; but he said the decisions of the Court had gone the other way, and the words of the Act of Parliament were strong.