Scottish Court of Session Decisions

Subject_1 DECISIONS of the LORDS OF COUNCIL AND SESSION, reported by SIR DAVID DALRYMPLE, LORD HAILES.
Subject_2 FOREIGN.
Subject_3 Whether assignees under an English commission of bankruptcy have a right of action entitling them to recover the bankrupt's effects in Scotland, and to compete for them; and whether other creditors of the bankrupt are barred from competing with the assignees, or claiming a preference on separate diligence used by themselves against the bankrupt's effects?

Benjamin Glover and Others, Assignees under the Commission of Bankruptcy of Bedford and Son,
v.
Robert Vazie of Hexham, in Northumberland

1776. January 23 1776 June 14.

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[Faculty Collection, VII. 272; App.I., Foreign, No. 3.]

Gardenston. The assignees cannot compete here on their letters to the debtors of Bedford and Son. There was no assignation; at most an intimation only, which by itself is nothing.

Monboddo. It has been often found that the assignees, under a commission of bankruptcy, may pursue for and make effectual the debts of the bankrupt even in this country.

Kaimes. An assignation by a bankrupt gives a title to pursue for effects out of the country, but it does not give a preferable title. But the question reported, is, “Whether a creditor, drawing in England, may not render his debt effectual elsewhere?” I can discover no reason why he may not.

Covington. I am old enough to remember the first introduction of claims by English assignees, and I have seen what may be called the retrogradation of such claims. The Court has strangely varied; sometimes granting, sometimes denying, and sometimes qualifying the right of the English assignees. It has been said of late, “We do not give an absolute and preferable right to such assignees, but only a title to pursue.” I think, and always will think, that such assignees have no right, not even of action out of England, and that, by thus blending the diligence of the two countries, inextricable confusion is introduced.

Kaimes. The assignation under the commission conveys nothing to be sure; but a right of action is a very different thing. Thus, in the common case, I get nothing conveyed to me by an arrestment; but, having arrested, I bring a forthcoming, and desire the judge to make effectual, in equity, that claim which I have by the arrestment.

Monboddo. If Lord Covington is right, there can be no competition here, and the arrester must be preferred; but, if we go into that opinion, we must overturn many decrees which have been pronounced on the contrary supposition.

Justice-Clerk. I always thought that it was inconsistent with law, that a commission of bankruptcy, issued under the great seal of England, could ever vest any subject out of England; but it is going too far to say that such commission will not give a title to pursue. The late bankrupt law will not vest subjects situated in England, but it will give a right of action in every English court of law; and the judges there will surely sustain action. Although the mode of the commission is different in England, and does not require the consent of the bankrupt, yet it will have the effect of giving a ground of action on the commission, which is founded on the implied consent of the bankrupt. I cannot, at present, see why a creditor, who has got a dividend in England, may not seek to have the rest of his debt made effectual in Scotland, seeing that the subjects in Scotland do not vest in the English assignees without diligence.

President. Suppose that, on the late bankrupt statute, a creditor should take a dividend on the trust-right, Could he go to England, and, by diligence, draw payment there?

Kaimes. I think that the trustee on the bankrupt act would be preferable as an assignee. That is not the case of assignees under an English statute of bankruptcy, which is only an assignation as to subjects in England.

Hailes. That the English assignees have a right of action has been frequently found. I took this case to report, supposing that to be established in practice; for, if that were not the case, there would be no question to be reported. I thought that Vazie, an Englishman, having claimed on an English debt, and actually drawn a dividend from the legal assignees, he could not come to Scotland and take payment of his debt, to the disappointment of the assignees. That the assignees were not only trustees named for him by the laws of his country, but trustees whom he himself had acknowledged. If he had first arrested, and then claimed a dividend in England, he would have been excluded, unless he gave up his arrestment. There seems no reason why he should be permitted to make his diligence effectual, merely by the device of drawing a dividend first, and arresting afterwards.

On the 23d January 1776, “The Lords found that Messrs Glover, &c., assignees under the commission of bankruptcy awarded against Bedford and Son, have a right of action entitling them to recover the bankrupt's effects in Scotland, and to compete for the same; and further, found that Robert Vazie of Hexham, an Englishman claiming under an English debt, and having already drawn a dividend of the bankrupt's effects, on account of the said debt under the said commission, is barred from competing with the assignees, or claiming preference on his arrestments produced.

Act. G. Fergusson. Alt. R. Sinclair. Reporter, Hailes.

Diss. Kaimes, Auchinleck, Alva. Non liquet, Justice-Clerk, Elliock, Covington. [The last because, as he said, he thought that legal assignees had no right of action, and therefore he would not vote, although the Court had overruled that preliminary objection.]

1776. June 14.—Justice-Clerk. I should be sorry to see the Court depart from the judgments which they have frequently pronounced. The assignees may claim, and they may compete. To deny them a right of action would be a departure from principles and practice; and it would be the harder, because English creditors take no concern themselves, but leave the management of the bankrupt's estate to the assignees, who are their trustees. Equally clear as to second point.

Monboddo. If the point were new, I should have doubt; and should rather think that a commission of bankruptcy had no more effect than a commission of lunacy. An English creditor who consented to the commission of bankruptcy, and drew a dividend, cannot resort to the diligence of this country; for this would be a counteracting of his own deed.

Covington. I cannot understand how a commission of bankruptcy, which does not vest subjects, can give a right of action as to those subjects; but, if there is a right of action in the assignees, and Vazie has done any thing to bar himself, he cannot now interfere.

Gardenston. We are opening a door to hurt the interest of creditors in this country. The commission of bankruptcy does not give any right whatever in this country; it only vests the estate within the territory of England: If so, How can it give a title to pursue in Scotland? I must confess that our decisions have gone so far; and there is no help for that. I must bend to them. But I am much alarmed at the second proposition, that a creditor should be debarred from recovering part of his debt in Scotland, because he has taken what he could in England. We are not to go any farther than the law of our country; and we cannot walk safely in any other track.

Kennet. If the first point were open, there might be difficulty; but it was solemnly fixed, 13 years ago, in the case of Thomson and Tabor. As to the second point, I am against the interlocutor. An English creditor may either claim under the statute, or let it alone; but this only respects English subjects, and it will not hinder him from attaching subjects in Scotland. Perhaps the assignees may repeat from him what he has already recovered in England.

Covington. If the first point is settled, I must be of the opinion of the interlocutor, As to the second; if a commission of bankruptcy is equal to an assignation by the bankrupt, every one who accepts such assignation is bound by it, and cannot interfere.

On the 14th June 1776, “The Lords found that the assignees have a right of action;” adhering to their interlocutor, January 1776. But, as to the other point, they ordered memorials.

Act. G. Ferguson. Alt. R. Sinclair. Rep. Hailes.

Diss. as to the first point, Stonefield, Covington.

N.B.—No memorials were given in; but the Court, having given judgment in the case T. and T. Khone against Parish and Schreiber, adhered to their interlocutor in the case of Vazie against Glover.