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 Creditors of a bankrupt acceded to a trust in favour of the whole creditors. The trustee found preferable to such acceding creditor using diligence even as to effects situate in a foreign country.

John Parish and JH. Schreiber
v.
Jacob and John Khons, &c

1776. February 21 and 1776 August 7.

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[Faculty Collection, VII. 271; App. I., Foreign, No. 2.]

Kaimes. The pursuers appeared, took their votes, and named trustees: does not that bind them down by their own consent? Still they may assert that the translation is not right, or they may deny that they concurred; but they do neither.

Covington. The old question still remains, Whether the agreement in Germany can go further than the subjects in Germany?

President. I do not say that it does; but I bind the pursuers by their own consent, and I bar them personali exceptione.

Gardenston. I think that the creditors have made an agreement for an equal distribution by the laws of their own country, from which they cannot depart.

Justice-Clerk. It appears that at Bremen creditors meet and choose their own sequesters. This has been done here, and it would be strange if they were afterwards to be allowed separately to attach the goods of their debtor in another country. This is mala fides; and, were it authorised, it would be an encouragement to enter into fraudulent devices, to disappoint the law of their own country.

On the 21st February 1776, “the Lords, in respect that the facts in the certificates are not denied, but, on the contrary, it is admitted that the pursuers gave their vote for the trustees, preferred the trustees;” adhering to Lord Monboddo's interlocutor.

Act. A. Wight. Alt. W. Craig.

August 7.—Kaimes. Trustees of foreigners have jus actionis in this country from equity. That is the very foundation of an arrestment jurisdictionis fundandæ gratia. Parish and Schreiber have appeared, and sought a dividend. Query. Does that bar diligence in this country? My difficulty is, Whether will the right of the trustees go farther than the subjects under the jurisdiction of their country? It does not follow, because a creditor is willing to take his share of the German funds, that he must be hindered from laying hold of the Scots funds; but I think that there is an equitable principle in not allowing a preference on the arrestment, which is founded on the analogy of the late bankrupt law.

Covington. I greatly disapproved of the judgment which gave foreign trustees a right of action. But, holding that judgment to be law, I hesitate not in giving my opinion that Parish, having acceded to the trust, cannot compete with the trustees.

Monboddo. The first question is a point of fact. The certificates clearly prove that the creditors acceded to the trust-right by voting, and that the trust-right comprehends the whole estates of the debtor. My only difficulty was there; but that is now established by evidence. It is said that although this was a good personal exception, yet that the trustees had no right to plead it; but the decisions of this Court put an end to that objection.

Gardenston. Agreed in opinion with Lord Covington.

[This indeed seemed to be the opinion of Mr M'Queen, who pleaded for Parish.]

Justice-Clerk. It would be attended with very singular consequences if the assignees of a foreign bankrupt were not allowed to compete, and the consequences would be as singular if it was the notion of the common law of Bremen that the effect of a cessio bonorum was limited to that little territory. Hence a bankrupt must first of all give up his whole books and papers, and then the commissioners must set aside all the vouchers of debts extra territorium, as matters of which they could take no charge. The wisdom of nations could never allow of this. It has been found that assignees, or commissioners, have a right to pursue here: it follows of course that a person who is a party to the act of bankruptcy cannot compete with the commissioners. This would be setting himself against his own trustee.

Kennet. I had some difficulty formerly, but am now satisfied of the justice of the interlocutor. In the case of Tabor, it was thought that the subject did not vest in the assignees, but that they had an assignation to a right of action. The creditors here had no reason to imagine that the persons who had concurred in the trust, would have used separate diligence.

Alva. Greater effects have been given to comitas in some cases than we are called to give here. The question here is upon strict law, founded on a personalis exceptio.

On the 7th August 1776, “the Lords preferred the trustees;” adhering to their own interlocutor, and to that of Lord Monboddo.

Act. W. S. Cathcart, H. Dundas. Alt. H. Erskine, R. M'Queen.

Hearing in presence.