Scottish Court of Session Decisions

This was an action of reduction of an arrestment of railway stock, on the ground, inter alia, that it was used by the railway company in their own hands. There were also conclusions for declarator that the defenders were bound to make payment to the pursuer of the bonuses, dividends, or profits which have accrued and arisen and been declared, and which may accrue, arise, and be declared on the said stock, and for an accounting in regard to the said bonuses, dividends, and profits, and payment of the amount ascertained to be due.

The defences stated were (1) that the defenders had at the date of the arrestment a lien over the share and dividends in security of sums due to them by the pursuer for carriages, and were entitled to retain the same till payment thereof; and (2) that the arrestment was effectual.

The action was originally raised by John Anderson, on 2d June 1863. The record was closed on 4th December 1863. Alexander Watt was sisted as a party to the action on 15th January 1864, it having been stated in a minute that Anderson had sold his stock to Watt. Watt's transfer was never recorded in the books of the company.

On 16th November 1864, the Court, recalling an interlocutor of the Lord Ordinary (Jervis-woode), sustained the first plea in law for the defenders, in so far as the same is urged as a defence against the petitory conclusions, but repelled it in so far urged as a title to exclude the declaratory and reductive conclusions, but without prejudice to the defenders' right to plead retention in another action and in competent form.

On 20th January 1866, the Court, recalling an interlocutor of the Lord Ordinary, found that Watt had a title to insist in the action ( ante, vol. i., p. 116).

The case having returned to the Outer House, parties were heard, and the Lord Ordinary on 6th June 1866, pronounced the following interlocutor:—

“ Edinburgh, 6 th June 1866.—The Lord Ordinary having heard counsel and made avizandum, and of new considered the record and whole process, decerns in favour of Alexander Watt, as pursuer, in terms of the reductive conclusions of the summons, and finds, declares, and decerns under the declaratory conclusions thereof, but only to the effect that the defenders are bound to make payment to the pursuer, Alexander Watt, from and after the 30th November 1863, and so long as he continues in right of the stock mentioned in the said conclusions; and with reference to the petitory conclusions of the summons, appoints the defenders to lodge within ten days from the date hereof a state of any bonus, dividends, or profits which have accrued, arisen, or been declared upon the stock referred to, from and after the 30th November 1863, reserving meanwhile the question of expenses.

Charles Baillie.”

“ Note.—In this anxiously-contested case the Lord Ordinary has been again called on to pronounce judgment in regard to the right of the defenders to maintain to its full extent the plea of retention as set forth on their behalf, in defence against the petitory conclusions of the summons, as the same is now insisted in at the instance of Alexander Watt, who has been sisted as pursuer.

It was argued, on the defenders' behalf, that under various authorities, but more especially with relation to the judgment of the Court in the case of Hotchkis v. the Royal Bank, as decided in the House of Lords, 28th November 1797, 3 Paton's Appeals, p. 618, that the plea of retention of the share itself is competent to the defenders. But as the Lord Ordinary reads the report of the case, it differs from this in respect to particulars which must have been deemed material, aud most important in the consideration of it. In that case, not only was there no statutory enactment, the terms of which could interfere with the operation of the common law, but the latter was supported in relation to its application to the particular case, by the provision in the bye-laws framed under the powers of the charter of the bank, by which the directors were enabled, if they thought fit, to stop a transfer of stock until the proprietor should find security for what he owed to the bank.

Here, as the Lord Ordinary reads the provisions of the Companies' Clauses Act which bears upon this matter, the stock of the company is transferable by the holder to a purchaser at all times, with the exception only of the periods specially provided by the statute, during which it is lawful for the directors to close the register of transfers.

C. B.”

The defenders reclaimed, and prayed the Court “to recal and alter the said interlocutor, except in so far as it decerns in terms of the reductive and of the first declaratory conclusions of the libel and to repel the pursuer's fourth plea in law, and sustain the defences founded on the plea of retention as regards the remaining declaratory and the petitory conclusion of the libel, in so far as the same have not been sustained by your Lordships' interlocutor of 16th November 1864 and to assoilzie the defenders, with expenses.”

Clark and Birnie were heard for the defenders.

Thoms for the pursuer Watt.

At advising,