Scottish Court of Session Decisions

This is an action of multiple poinding and exoneration brought in the name of James Ritchie, writer in Glasgow, agent for election expenses for Sir Norman Macdonald Lockhart of Lee and Carnwath, Baronet, against John M'Lachlan, accountant, Wishaw, common debtor, and Archibald Pollock, accountant in Glasgow, trustee under a trust-deed executed by the said John M'Lachlan, for behoof of his creditors, real raiser, Henry M'Lachlan, accountant, Coatbridge, and others. In the condescendence annexed to the summons the circumstances in which the action is brought are explained:—

“The common debtor was one of the agents at the last election of a Member of Parliament for South Lanarkshire, and in promoting the candidature of the said Sir Norman Macdonald Lockhart there was incurred to him an account for work performed and monies disbursed by him. The said account having been disputed, was referred by the said common debtor, with consent and concurrence of the defender Henry M'Lachlan, and the said James Ritchie, as agent for election expenses for the said Sir Norman Macdonald Lockhart, to the decision and final award of George Smith, writer in Glasgow, as arbiter mutually chosen by them, conform to minute of agreement and reference entered into between them, dated 2d and 3d June 1869. The said arbiter, after sundry steps of procedure in said reference, pronounced an award on or about 9th September last, finding the common debtor entitled to the sum of £170, being the amount of the fund in medio. A copy of the said minute of agreement and reference and of the said award are herewith produced. On or about 19th August 1869 the said common debtor, for the better security and more sure payment of the debts due by him, executed a trust-deed in favour of Archibald Pollock, accountant, Glasgow, defender and real raiser. The said Henry M'Lachlan alleges a right to the said fund in medio, or part thereof, in virtue of an assignation, or pretended assignation, by the common debtor in his favour, and the other defenders have arrested in the hands of the pursuer and nominal raiser, for sums alleged to be due to them by the said common debtor. The said real raiser has endeavoured to convene a meeting of the creditors of the said common debtor, with the view of getting some amicable arrangement, and a fair division of the means and estate of the said common debtor, but having failed to do so, the present action has become necessary.”

The following are the claimants on the fund in medio:—

(1) James Graham, watchmaker, Glasgow, who claims to be ranked on the fund, for the sum of £24, 16s. in respect of an arrestment dated 9th September 1869 laid on in the hands of the nominal raiser James Ritchie. The arrestment was laid “in the hands of James Ritchie, writer, Glasgow, as individual and as agent of Sir Norman Macdonald Lockhart.”

(2) The said Archibald Pollock, who claims the whole fund in medio in virtue of a trust-deed in

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his favour for behoof of creditors, granted by the common debtor, dated 19th August 1869.

(3) The said Henry M'Lachlan, who claims to be ranked for two sums of £81, 1s. 2d. and £15, 7s. 7d. in respect of an assignation dated 18th December 1868 by the common debtor in his favour, of an account of £267, 11s., of which payment was claimed by the common debtor from Sir Norman Macdonald Lockhart, the said account being that under which, in the reference above specified, the common debtor was found entitled to a sum of £170. This assignation was intimated to Ritchie on or about 20th January 1869.

(4) Messrs D. & J. Cassels, grocers, Hamilton, who claim two sums, amounting to £58, 7s. 11d., in virtue of an arrestment used on the dependence of an action in the Sheriff-court of Hamilton, dated 2d March 1869. The arrestment bore to be in the “hands of James Ritchie, writer, Glasgow.” It arrested a sum of “£50 sterling money, less or more, due and addebted by him to the said John M'Lachlan, together with all goods, gear, debts, sums of money,” &c.

(5) James Marshall, auctioneer, Carluke, who claims £14 in virtue of an arrestment laid under an extract registered protest of a bill, dated 20th August 1869.

The following is the material part of the deed of submission:—“Therefore the said James Ritchie, as agent foresaid, and the said John M'Lachlan (with consent foresaid), have submitted and referred, as they hereby submit and refer, their aforesaid differences, and all other questions or differences arising out of or in relation to the said account, to the amicable decision, final sentence, and decree-arbitral to be pronounced and given forth by George Smith, writer in Glasgow, arbiter mutually chosen by the said James Ritchie and John M'Lachlan, to the end that he may determine the same, with power to the said George Smith to tax the said account on the footing that the said John M'Lachlan was an agent of the said Sir Norman Macdonald Lockhart, or on any other footing that he may determine that the said John M'Lachlan was engaged in during the said election, or consider reasonable, and assess the same as a whole, or each item thereof (both fees and outlay), at such a sum or sums as he shall think proper; and further, with power to the said George Smith to receive claims, take all manner of probation he may think fit, by writ, witnesses, or oath of party, and, inter alia, to call for all books, accounts, and full details thereof, vouchers, letters, and documents relative to the foresaid account and claim and others, or to the engagement and actings of the said John M'Lachlan, and to hear the parties thereon; as also to decern against either party, in whole or in part, for payment of the expenses which may be incurred by the other party under this submission, including the remuneration of the clerk to the submission, as also including the expense of the deed of submission itself, and of the decree or decrees-arbitral to follow hereon, and of the registration of the same respectively; and whatever the said arbiter shall determine in the premises in whole or in part, by decree or decrees-arbitral, whether interim or final, to be pronounced by him between and the day of next, or on or before any other day to which he may prorogate the submission, which he is empowered to do at pleasure; I, the said James Ritchie, bind and oblige myself as agent foresaid, and my said constituent, and we, the said John M'Lachlan and Henry M'Lachlan, bind and oblige ourselves and our respective heirs, executors, and successors, to acquiesce in, implement and fulfil to each other, under the penalty of £100 sterling, to be paid by the party failing to the party observing or willing to observe the same over and above performance.”

The award was as follows:—“The arbiter having met with the agents for the parties, and gone over with them the details furnished by the claimant of his account or claim-Finds that the same ought to be modified to £170 sterling, and modifies the same accordingly: Finds also the respondent liable to the claimant in one-half of the expenses incurred by him in the submission, as the same may be taxed by the arbiter, of which allows an account to be lodged.

“ Note.—The arbiter thinks that the sum awarded the claimant will fully remunerate him for his services during the election contest in question, notwithstanding the large modification of the claim. The arbiter allows the claimant half costs, because a considerable portion of the inquiry in the submission was directed to the question as to the character in which the claimant acted, in which he has been successful—the respondent, in consequence of his not having begun to take charge till after the contest commenced, evidently not being aware of the whole circumstances connected with tile claimant's employment and actings.”

The Lord Ordinary ( Jerviswoode) pronounced the following interlocutor:—“The Lord Ordinary having heard counsel for the parties respectively in the competition, and made avizandum, and considered the debate, productions, and whole process—Finds that the arrestment used in the hands of Sir Norman Macdonald Lockhart on behalf of the claimant James Marshall, the execution of which, as returned by the messenger, forms No. 15 of process, was so used validly and competently to the effect of attaching such sum as was then in his, the said Sir Norman Macdonald Lockhart's, hands as due, and in which he was addebted to John M'Lachlan, the common debtor; and to such extent and effect sustains the plea in law stated on behalf of the said claimant Marshall: Finds that the arrestment used on behalf of the claimant James Graham, in the hands of the nominal raiser, as an individual, and as agent of Sir Norman Macdonald Lockhart, the execution of which forms No. 21 of process, and that used on behalf of the claimants Messrs D. & J. Cassels, in the hands of James Ritchie, Esq., writer, Glasgow, the nominal raiser-the execution of which is No. 24 of process—were, in point of law, respectively invalid and ineffectual to attach the sum which forms the fund in medio in the present process, in respect that the said sum was not, and did not constitute a debt due by the said arrestee to the defender John M'Lachlan, but was in its proper character a deposit of a sum of money in the hands of the arrestee, for a separate special and limited purpose, and as such was not arrestable by the personal creditors of him, the said John M'Lachlan; and before further answer, and with reference to the preceding findings, appoints the cause to be enrolled, that parties may be heard as to the application of the same to the claims of several parties, reserving meanwhile the matter of expenses.

Note.—The questions raised in this process are not free from difficulty in their solution; but the Lord Ordinary has endeavoured to deal with them in such form as he trusts may sufficiently exhaust

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the points of law which all parties, as the Lord Ordinary understood, were agreed could be and ought to be disposed of in the present stage of the process.

If it shall appear to the parties, or any of them, that other points raised by them, which are not embraced in the present judgment, may be decided now, the Lord Ordinary, if moved to that effect, would endeavour to exhaust such matter of question before the period of reclaiming against this interlocutor shall expire.”

The claimants Graham & D. and J. Cassels reclaimed.

H. J. Moncreiff for Graham.

Shand and W. A. Brown for D. &. J. Cassels.

Scott for Henry M'Lachlan.

Brand for Marshall.

B. V. Campbell for Pollock.

The case was several times before the Court, and was argued by the parties upon a variety of points. The Court ultimately decided as follows:—They held (1) that the arrestment laid on by Graham in the hands of Ritchie, the nominal raiser, was a good arrestment. It was dated 9th September 1869, the date on which under the submission referred to the common debtor became entitled to £170. Ritchie was a party to the submission, and under it he came to be in right of funds which he was bound to pay over to the common debtor. By the Corrupt Practices Act, the agent for election expenses was the only party who could satisfy election claims, the candidate being interpelled from himself making such payments. It was unnecessary to say what might have been the result if Ritchie had had no funds in his hands belonging to the common debtor, but in virtue of the award under the submission he must be taken to have had funds at the date of the arrestment. The Lord Ordinary was wrong in holding that the fund in medio was not arrestable, because “it was in its proper character a deposit of a sum of money in the hands of the arrestee for a separate, special, and limited purpose.” His Lordship was confounding the case where there was a destination of a fund in favour of particular creditors where an arrestment by a creditor of the party making the destination would not carry off the fund. Here the funds were in the hands of the nominal raiser for the express purpose of paying the common debtor, and as arrestment could not be laid in his hands, it must necessarily be done in the hands of the party in possession. (2) The arrestment in the hands of Ritchie used by D. & J. Cassels was also good. It was different in terms from Graham's arrestment, who had arrested in Ritchie's hands not only as an individual but as an agent; but on the assumption that he held funds there was a concurrence of the two conditions necessary to validate the arrestment—1st, indebtedness by Ritchie to the common debtor; 2d, the possession of funds that might be attached. If funds were due by Ritchie to M'Lachlan, it was immaterial in what capacity the relation of debtor and creditor was established. (3) The assignation in favour of Henry M'Lachlan was not open to the objections stated to it by the arresting creditor Graham. If it were taken to be an assignation in the strict sense of the word, a penny stamp would certainly be insufficient. But it was of the nature of a mandate to Henry M'Lachlan to receive the sum which was due to the common debtor, and therefore fell within the principle of the judgment in Lawrie v. Ogilvie, 6 Feb. 1810, 15 F.C. 561 The Lord Justice-Clerk was further of opinion that the deed founded on was liable to no objection under the Stamp Act; but the judgment of the majority was rested on the ground that the mandate was an effectual transmission of the right. (4) The arrestment used by Messrs D. & J. Cassels in the hands of Ritchie was not only good, but although the schedule only specified a sum of £50 as arrested, was valid to enable the claimants to he preferred for a larger sum on the fund in medio. There was no doubt that an arrestment on the dependence covered not only the principal debt but all the expenses of recovering it in whatever Court these might be incurred. And the arrestment laid an embargo on all “sums of money” in the arrestee's hands, Lord Cowan observing that an arrestee paying away any part of funds in his hands after an arrestment had been laid on did so at his own risk, and exposed himself to the penalties of a breach of arrestment. Lord Benholme differed on this point. He held that the words in the schedule of arrestment, “together with all goods, gear, debts, and sums of money,” were to be read as mere words of style; and that the words “more or less” in the schedule, occurring after the specification of the sum arrested, were to be held as qualifying not the amount specified in the schedule, but the amount of the debt, operating however within the limits specified.