Where a farm under lease had been subset, an assignation to the lease may be made to another, which will be effectual if he possesses by levying the subrents.
Click here to view a pdf copy of this documet : PDF Copy
Walter Sime, merchant in Aberdeen, obtained a lease from Lord Arbuthnot of certain subjects, for fifty-seven years from Whitsunday 1786. These subjects (20th March 1793) he subset to Robert Davidson, for the remaining years from Whitsunday 1792, for payment of the original rent to Lord Arbuthnot, and for £100 of surplus-rent payable to Mr. Sime himself.
Mr. Sime having borrowed a sum of money from William Fiddler residing in Aberdeen, granted (20th June 1797) his bond for it, payable 20th June 1798; and in further security, he subset to him the whole subjects contained in the original lease granted by Lord Arbuthnot, but under the burden of Mr. Davidson’s lease, and that for thirty-three years from Whitsunday 1796:
“Declaring hereby, that the said William Fiddler, by his entering to the possession of the lands hereby subset, or uplifting the rents payable by the said Robert Davidson or others, he shall be obliged, first, to pay out thereof the hypothec rent payable yearly to Lord Arbuthnot, the proprietor of the said lands, in terms of the original lease thereon; and to apply the surplus-rent, first, for payment of the interest of the foresaid sum of £1000 Sterling, and the balance to be imputed in part payment of said principal sum : And in regard the said Robert Davidson stands bound by the foresaid subtack in his favour, not only to pay said hypothec rent, but also the sum of £1000 Sterling of additional surplus-rent to me, my heirs and successors: Therefore I, for me and my foresaids, make, constitute and ordain the said William Fiddler, his heirs and successors, my lawful cessioners and assignees, in and to the whole clauses, and obligements and conditions contained in my favour, by the original lease granted to me on the premises, and in and to the subtack granted by me to Robert Davidson, whole clauses and obligements therein ‘contained; and to the foresaid sum of £100 Sterling of additional rent, ‘payable to me yearly by the said Robert Davidson, during the subsistence of ‘the sublease.”
In virtue of this bond and assignation, Mr. Fiddler uplifted the surplus-rent of £100 from the subtenant, who continued to pay the rent due to the landlord, and to discharge all the services imposed by the principal tack upon the possessor.
In 1803, Mr. Sime became bankrupt; his estate was sequestrated, and vested in the person of a trustee, who, in collecting the funds, sold the lease; and a claim was made by Mr. Fiddler for payment of £612. 11s. 6d. the balance of his debt, as a preferable debt, out of the price.
To establish this right, an action was raised. The Lord Ordinary (27th June 1805) ‘finds the pursuer has a preferable right to the tack in question, and proceeds thereof, to the extent of the balance of the debt due him.’
The trustee reclaimed, and
Pleaded: The deed under which the preference is claimed, is, first of all, a bond for borrowed money : So far all is well. It next becomes a subset by the granter, in the character of principal tenant, of a subject he had already subset for the term of his own possession : It is also an assignment of the principal lease, in virtue of which the cedent had, in the same instant, granted a subtack: Then it is an assignation to a surplus-rent payable by the subtenant in possession. Now, whether it be good or not as a sublease, it will be recollected, that the whole was already subset, and for the whole period of the original lease, to a tenant in possession. There was no room for another subset; the granter’s power of subsetting was exhausted; and it was impossible for him to affect the state of possession during the period of the original lease. The only interest the tenant retained in the subject was the right of receiving £100 of surplus-rent. This right he might transfer; but the proper mode was by assignation, and not by sublease of the lands out of which it arose. In fact, the deed is nothing but an assignation to the surplus-rent; for the creditor pays no rent in his alleged character of subtenant; he is merely taken bound to apply the surplus-rent in extinction of the debt. But such an assignation to the surplus-rent cannot compete with the real right vested in the trustee, in virtue of the sequestration.
As an assignation to the principal lease it is inept, never having been completed by intimation to the landlord; and as to the payments made by the subtenant, which are said to supply the want of intimation, they cannot be equivalent to intimation of the assignation to the surplus-rents. Besides, there could be no possession under this assignation to the lease. The lands were possessed by another; and an assignation retenta possessione gives no preference to the assignee over a subsequent acquirer of the subject, whose titles are legally completed.
The Court refused the petition, without answers.
Observed on the Bench: There have been many questions as to the mode of completing an assignation to a lease. But there can be none more effectual than possession; see, 6th June 1794, Hardie Douglas. No. 46. p. 2802. Here there is all the possession that the case admits of,—the possession of the subrents, which implielso intimation to the subtenants.
Lord Ordinary, Glenlee.For Petitioner, Jeffrey.Agent, Arch. Dunbar, W. S.Clerk, Home.
Fac. Coll. No. 247. p. 554.
