Scottish Court of Session Decisions

Mr George Pendreigh senior carried on business at Bonnington Mills, near Edinburgh, as a miller and grain merchant, and James Pendreigh, George Pendreigh junior, John Pendreigh, and Thomas Graham Scott, were also in business as grain merchants and mill-masters, under the firm of J. & G. Pendreigh, of which firm they were the sole partners. The said James Pendreigh and George Pendreigh junior also carried on a separate business as brewers, under the same name, but with a different firm, of which the said James Pendreigh and George Pendreigh junior were the sole partners. The estates of the said two firms, and of the said James Pendreigh, George Pendreigh junior, John Pendreigh, and Thomas Graham Scott, were sequestrated on the 16th day of March 1869, and Mr Frederick Hayne Carter was appointed trustee on the sequestrated estates.

The bankrupts, soon after their examination, offered the creditors on both estates a composition of 7s. 3d. per pound, but the offer was opposed by some of the creditors, including Messrs D. M'Laren & Company, of Leith, who believed that the estate was able to pay a composition of at least 9s. per pound. In consequence of this opposition Mr Daniel Smith, at the request of some of the creditors, proposed to Mr George Pendreigh junior that he should buy off the opposing creditors by giving them a sum of money over and above the composition. In pursuance of this proposal Mr George Pendreigh junior, on 29th April 1869, lodged in the hands of the said Daniel Smith the sum of £375 for the purpose of arranging with the opposing creditors. Daniel Smith accordingly paid the above fund to the opposing creditors, and they withdrew their opposition; but having soon after

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become alive to the penalties and forfeitures of the 150th section of “The Bankruptcy (Scotland) Act, 1856,” they immediately returned the said sum of £375 to Daniel Smith, who retained it in his possession. In consequence of this, Mr George Pendreigh senior, who averred that the money belonged to him, and had been obtained by George Pendreigh junior for business purposes, raised a multiplepoinding in the name of Daniel Smith, as holder of the fund. Besides Mr George Pendreigh senior, the real raiser, Frederick Hayne Carter, as trustee on the sequestrated estates of James Pendreigh, George Pendreigh, John Pendreigh, and Thomas Scott Graham, as above narrated, was called as defender.

The pursuer and nominal raiser objected to the action as incompetent, on the ground that there was no averment of double distress.

The Lord Ordinary ( Gifford) pronounced the following interlocutor and note:—

“ Edinburgh, 14 th March 1872.—The Lord Ordinary having heard parties' procurators on the summons, and on the objections for the nominal raiser, No. 5 of process, allows the summons to be amended as proposed; and this having been done at the bar, and parties farther heard, repels the objections to the competency of the action of multiplepoinding, and finds the nominal raiser liable only in once and single payment, but reserving to the nominal raiser all claims of retention or other claims competent to him as accords: Appoints the summons and process to be intimated to Messrs D. M'Laren & Company, merchants, Leith, and to the individual partners of that firm; and appoints all concerned claiming an interest in the alleged fund in medio to lodge condescendences and claims by the second box-day in the ensuing vacation, and reserves meantime all questions of expenses.

Note.—At first sight the nominal raiser's objections appear very strong, and the Lord Ordinary was greatly impressed with the argument submitted in support thereof. Even as amended, the summons scarcely avers double distress, but only that competing claims may possibly arise.

On farther consideration, however, the Lord Ordinary thinks that the present case is exceptional, and that the action of multiplepoinding is competent. The circumstances are very peculiar. On the face of the nominal raiser's objections he himself has no right to the fund. He holds it merely as trustee either for the party from whom he received it—Mr Pendreigh junior—or for the party to whom the money really belongs. The real raiser claims it on the ground that the money is his property; and it is plain that in a direct action the nominal raiser could not pay in safety without calling Mr Pendreigh junior, his trustee, and probably Messrs M'Laren. Thus an action of multiplepoinding is really fairly required for the nominal raiser's exoneration, and he seems to have no legitimate interest to object thereto, and to insist upon being cited in an ordinary petitory action. All questions of expenses are reserved, and the nominal raiser will be kept safe and indemnis. As Messrs M'Laren may have an interest in the fund, intimation to them seems proper.”

The pursuer and nominal raiser reclaimed.

Watson and Trayner for him.

Solicitor-General and J. G. Smith for defenders.