Duncan Davidson and Charles Graham v. John Fraser and his Attornies
Date: 3 July 1798 Case No. No 92.
A person whose estate was under a commission of bankrupt in England, found entitled to take the necessary steps in his own name, for securing and recovering a debt due to him in Scotland, although constituted by a bond in the English form, his object having been to make it over, when recovered, to his creditors.
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A commission of bankrupt was issued in 1786, against John Fraser, merchant in London, and the commissioners afterwards transferred his estate to assignees, in the usual manner.
At the time of his bankruptcy, he held a bond in the English form, granted by George Gun Munro of London, which was marked by the commissioners, as having been exhibited to them under the commission of bankruptcy.
Mr Munro afterwards settled in Scotland, where he had a small landed estate. In 1792, Mr Fraser, while the commission of bankrupt was still in force, obtained, in his own name, a decree of the Court of Session against Mr Munro; and, in 1794, Mr Fraser and his attornies led an adjudication of Mr Munro's heritable property.
The deed by Mr Fraser, appointing attornies in Scotland, authorised them to recover the debt due by Mr Munro, but under a declaration, “that they were to account for the same to the assignees under a commission of bankrupt issued in England against the granter of the said factory.”
In a ranking and sale of Mr Munro's property, which was afterwards brought, Mr Fraser and his attornies claimed on the bond and adjudication; to which Duncan Davidson and Charles Graham, trust-disponees for another of Mr Munro's creditors,
Objected; The diligence done by Mr Fraser in his own name is inept, being obtained by one not in right of the debt. It is due by a bond in the English form, the granter of which, at its date, was domiciled in England. Consequently, every question with regard to its constitution, transmission or extinction, must be determined by the law of England; York-buildings Company against Cheswell, No 74. p. 4528; Rochead against Scott, No 94. p. 4566; Christie against Straiton, No 96. p. 4569; Marshall against Yeaman, No 95. p. 4568; Creditors of Galbreath against Galbreath, No 97. p. 4574; Blackwood against Cathcart, No 98. p. 4579; Watson against Renton, No 100. p. 4582. Now, by that law, a commission of bankrupt completely denudes the bankrupt of his whole property, which comes to be vested absolutely in the assignees chosen by his creditors, by virtue of an assignment from the commissioners; and the assignees alone can thereafter secure and recover it; 13th Eliz. c. 67. § 2; 1 Jac. I. c. 15. § 13; 1 Atkyns, 253; 12 Mod. 324; Blackstone, vol. ii. p. 485; 1 Comyns, Dig. 526; Cro. Car. 187. 209; Cro. Jac. 105; Lut. 274; 1 Saund. 239; 3 Salk. 59; 1 Salk. 108; Id. 3; 1 Bur. 20; 2 Vent. 63; 1 Salk. 3; Wilson, 307; Vern. 163; 1 Atk. 97; Cowper, 5. 70; Lutw. 701; 1 Seving, 17; 2 Tidd's Practice of the King's Bench, 564. This holds, even although the property should be situated in a foreign country; 1 Cooke's Bankrupt Laws, 370; Clive v. Mills at the Cockpit, 27th July 1764; Douglas, 161. Accordingly, their title to sue in Scotland has been uniformly recognised; Glover against Vassie, No 91. p. 4562; Scott against Leslie, No 92. p. 4562.
It is no doubt true, that, in the case of a Scotch debt, if, before payment to the assignees, a creditor of the bankrupt shall attach it, agreeably to the forms of execution in this country, he will be preferred to them; because the English statutes of bankruptcy can have no further force here than to put the assignees in the place of the bankrupt. But in the case of an English debt, like that in question, the right of the assignees would be preferred even to the diligence of the bankrupt's creditors; Assignees of Wilson against his Creditors, No 87. p. 4556. And, at any rate, it does not follow, that, because competitions may arise between the assignees and the creditors of the bankrupt, with regard to his foreign property, he can, in his own name, take any step for its recovery.
Answered; The assignment, under a commission of bankrupt in England, does not, ipso jure, divest a person of his property in Scotland; Ogilvie against Creditors of Aberdein, No 86. p. 4556; Thorold against Forrest and Sinclair, No 89. p. 4561. The diligence, therefore, was competent; and, from the terms of the power of attorney granted by Mr Fraser, clearly intended for behoof of his creditors.
The Lord Ordinary ‘sustained the objections to the interest produced for John Fraser and his factors; and found, that it must be struck out of the ranking.’
On advising a reclaiming petition for Mr Fraser, with answers, it was
Observed on the Bench; It is not very long since assignees under an English commission of bankruptcy were allowed to sue or insist in diligence in Scotland at all; and it is still clear law, that the creditors of the bankrupt may obtain a preference over them, by arresting or adjudging, which proves, that in questions occurring here, a radical right is held to remain with the bankrupt. Besides, as it appears that Mr Fraser was acting for behoof of his creditors, his assignees and he should be considered as the same party. And, at any rate, the objection, supposing it well founded, is jus tertii to Mr Munro's other creditors.
The Lords altered the interlocutor, and repelled the objection.
Lord Ordinary, Ankerville.For Objectors, H. Erskine, C. Ross.Alt. Ja. Oswald.Clerk, Menzies.
Fac. Col. No 86. p. 197.
