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A party granted a bond and disposition in security of a loan, and at the same time a letter by which he agreed that the lender should have power to appoint a factor to uplift the rents, but to account to the proprietor for his intromissions, after paying the interest of the loan. A factor was appointed. Held that this agreement was practically putting the lender in possession of the rents, and that the appointment was not recalled by the sequestration of the proprietor.
This was a suspension and interdict brought by the trustee on the sequestrated estate of William Uuncan junior, S.S.C., against Matthew Brown, cabinetmaker, Edinburgh, for the purpose of interdicting the latter from collecting or interfering with the rents of certain heritable subjects belonging to the trust, due at the term of Martinmas 1867. The Lord Ordinary (Mure) granted interiminterdict, and thereafter, on the passed note, made the interdict perpetual, with expenses in favour of the complainer. The respondent reclaimed, and amongst other questions the following arose and was disposed of:—
It appeared that the bankrupt Duncan had, prior to his sequestration, borrowed £1000 from a Mr Baigrie, to whom he granted a bond and disposition in security over his heritable property, and unico contextu with the bond, he also granted a letter setting forth that it was part of the agreement under which the loan was granted, that, while he held the money, Baigrie should have power to appoint a factor to uplift the rents of the subjects included in the bond, such factor to account to him (Duncan) for his intromissions, after paying the interest of the loan to Baigrie. In virtue of this arrangement, the respondent was appointed factor, his appointment being verbal, but being understood to be by Baigrie and Duncan jointly. The question now was, inter alia, whether this appointment fell by the sequestration of Duncan. It was contended by the trustee that it did; that the arrangement in question was one which conferred only a personal right; that it did not amount to puttingthe creditor in possession, as under a decree of maills and duties; that it was merely a jointmandate, revocable (so far as Brown was concerned) by either mandant; and that the parties having chosen to rely upon an arrangement having that character, it was not for the Court. to give it a higher and a different character.
Shand and Macintosh for complainer.
Trayner and Scott for respondent.
The Court, however, held that the mandate, whether joint or by Baigrie alone, was for behoof of Baigrie the creditor, and was in substance a putting of Baigrie in possession of the rents so far as necessary for his interest. That being so, it was not a mandate which was revocable by Duncan, or which fell by Duncan's sequestration. Upon the merits of the case generally the Court recalled the Lord Ordinary's interlocutor, and refused the note of suspension, with modified expenses.
Agent for Complainer— William Spink, S.C.C.
Agent for Respondent— Thomas Wallace, S.S.C.