What diligence sufficient. - Effect of partial interruption.
Sir James Grant v. The Creditors of the York-Buildings Company
Date: 21 July 1784 Case No. No 450.
Whether prescription of a debt due by a corporation, was interrupted by a horning used against some of the members, who had been the representatives of the corporation when the decree on which the horning proceeded was pronounced?
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The York-Buildings Company was debtor by bond to the predecessor of Sir James Grant, who brought an action in the year 1735, calling by name the then Governor and six Assistants of the Company, for themselves, and as representing the Company. And upon the decreet which followed, a horning was executed in the month of July 1740.
In the ranking of the creditors of the Company, Sir James Grant, in the month of March 1780, entered a claim, in virtue of the above-mentioned debt and diligence. The other creditors objected the negative prescription, and
Pleaded; Corporations which are established by law, can sue or be sued only by the particular name or designation given to them by the legislature. The action, therefore, instituted in the year 1735, not being directed against the Company, but its managers for the time, was altogether irregular and inept; and the horning issued in 1740, was still more exceptionable, the persons against whom it was executed being no longer the representatives of the Company. They were not even liable, as partners, for its debts, it being only the stock belonging to corporations of this sort, and not the wealth or security of particular members, on which creditors can rely for their payment.
Answered; The authority given by Parliament to sue a chartered Company by its corporate firm, cannot detract from the validity of judicial proceedings, in which, without using that privilege, its representatives have been regularly cited. The decreet obtained by the claimant was therefore completely effectual; as was also the subsequent horning, which, without a total nullity, could not have been framed in any other terms. The irregularity, however, of the diligence here used as an immediate document against the Company, will not support the present objection. The defenders in the action 1735 were called, not only as representing the Company, but as individuals, in which last character they were liable, after the expiry of their office, in the same manner as Magistrates, for the debts of a burgh contracted during their administration; 10th July 1752, Cleland contra the Magistrates of Pittenweem, No 17. p. 2511. In virtue of the horning which followed, their persons might have been seized by caption, or an escheat of their moveables might have taken place. As therefore diligence used against one of many co-obligants will preserve the debt against the whole, the statutory exception is here altogether precluded.
The Lords considered the decreet of constitution as sufficiently formal. Their only difficulty respected the effect to be given to the horning which could not be received as an immediate document against the Company. A considerable majority, however, were of opinion, that the intimation thereby afforded to one or more of the partners was effectual to save the debt from prescription.
The Lords found, “that the decreet of constitution, with the horning and execution following thereon, sufficiently interrupt the negative prescription.”
Reporter, Lord Monboddo.For Sir James Grant, Lord Advocate Campbell, James Grant.For the other Creditors, Elphinston, Blair, Abrcrombie.Clerk, Colquhoun.
Fol. Dic. v. 4. p. 115. Fac. Col. No 171. p. 268.*** This case having been appealed,
The House of Lords, 15th April 1785, “Ordered and Adjudged, That the interlocutors complained of be reversed, without prejudice to the points therein decided; and farther Ordered, That the cause be remitted back to the Court of Session, with a direction to proceed thereupon according to justice.’, It is believed the suit was afterwards compromised.
