Scottish Court of Session Decisions

The summons in this action, at the instance of Major-General Day Hort Macdowall of Garthland, and William Cuninghame, Esquire, late of Craigends, captain in the 11th Regiment of Hussars; against Andrew Hoggan and William Henry Hill, writers in Glasgow, clerks to the Trustees on the Roads in the County of Renfrew, and as such representing the said last-mentioned trustees, concluded for payment out of the funds, assets, and revenues, under the charge of the said Trustees, to the pursuer the said Major-General Day Hort Macdowall, of the sum of £1333, 6s. 8d. sterling, and to the pursuer the said Captain William Cuninghame, of the sum of £833,6s. 8d. sterling, being the respective amounts paid by the pursuers respectively to the respective creditors in right of certain bonds dated 1793 and subsequent dates, and which bonds were granted under the authority of the Act 32 Geo. III. c. 121, (1792) upon the credit of the tolls of particular roads mentioned in the bond; and the question raised was whether, on a sound construction of the statutes regulating the Renfrewshire roads, the pursuers were placed in the situation of general creditors and entitled to rank pari passu upon the whole cumulo funds of the Renfrewshire.

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Road Trust. The facts of the case are fully stated in the interlocutor of the Lord Ordinary:—

“ Edinburgh, 25th July 1871.—The Lord Ordinary having heard parties' procurators, and having considered the closed record, the bonds libelled, and the various Acts of Parliament, minutes of the Road Trustees, and other writs founded on, Finds that the defenders, Messrs Andrew Hoggan and William Henry Hill, writers in Glasgow, are clerks to the Trustees on a great number of roads in the County of Renfrew, being, inter alia, the roads enumerated in the 3d section of the Act 6th Geo. IV. cap. 108, and as such the said defenders represent the Trustees on the whole of said roads: Finds that the pursuers are in right of certain bonds, or parts thereof, being the seven bonds mentioned in the conclusions of the summons granted by the Road Trustees, acting as trustees on certain special roads mentioned in the bonds: Finds that, besides and apart from any personal obligations created by the said bonds against the granters thereof as individuals, the said bonds respectively by their terms created only a security over the tolls on the special roads therein mentioned, and create no security in favour of the creditors over other roads not specially mentioned, and the tolls of which other roads are not specially mentioned or assigned: Finds that none of the Acts of Parliament, and none of the minutes of the Road Trustees founded on by the pursuers, entitle the pursuers, as creditors in the bonds founded on by them, to payment of the said bonds, or any part thereof, from the tolls or revenues of any other roads than the road specially mentioned in the bonds, in competition with the creditors on such other roads, or who hold securities over the tolls or revenues of such other roads; and, in particular, finds that the pursuers, as in right of the bonds libelled, or part thereof, are not entitled to a pari passu ranking with the other creditors of the whole roads under the charge of the Renfrewshire Road Trustees: Finds that there is nothing in the statutes, or in the minutes of trustees founded on, to create the whole debts incurred by the present Renfrewshire Road Trustees, or their predecessors, a cumulo debt chargeable upon the whole roads and revenues under the charge of the said Trustees: but, on the contrary, finds that each debt must be charged, in the first instance, only against the particular road or roads, tolls or revenues upon which by the terms of the bond it is made chargeable, or which by the bond are especially assigned or impledged: Finds that the pursuers are not entitled to decree for the sums concluded for against the Renfrewshire Road Trustees, or their clerks generally, in the broad terms in which decree is sought in the present action; but that the said decree must be limited or restricted so as to operate as a decree against the trustees only so far as they have, or may have, funds in their hands applicable to the payment of the bonds sued for; and with these findings, appoints the case to be enrolled for further procedure.

Note—This case has been several time debated in the Procedure Roll, and was from time to time delayed for the production of documents, particularly minutes of the Road Trustees, which it was thought might have a material bearing upon the points raised. As the history of the bonds sued upon goes back so far as 1793, opportunity was given to the pursuers to look over the Trustees' accounts and minutes for the last eighty years, so that anything bearing upon the suit might be extracted therefrom. The Lord Ordinary understands that the defenders have given the fullest information and the fullest access to their books and papers, and that no diligence or judicial order was necessary.

These inquiries have necessarily caused considerable delay, and even yet many points connected with the history of the roads under the defenders' charge, and of the various debts, or classes of debts, over them, are involved in some obscurity.

In many respects the action is not well suited to try the various questions which the parties have endeavoured to raise under it. The pursuers fairly and frankly avowed that their object, or one of their objects, was to try the question whether the numerous statutes passed by the Legislature in reference to the Renfrewshire roads, with the minutes of trustees following thereon, had not the effect of making the whole debts of the Renfrewshire Road Trust, whensoever contracted, and in whatsoever terms the bonds were expressed, catholic debts, affecting equally and entitled to rank pari passu upon the whole cumulo funds of the Renfrewshire Roads Trust. The parties also announced that they wished to raise the subordinate or alternative question, whether, supposing the whole debts are not to rank on the whole funds and tolls pari passu with each other, there may not be subordinate rankings, or rankings secundo loco, so that the tolls of one road, though primarily liable for its own debt only, may yet be liable subsidiarily for the debts of other roads, which are not so prosperous, and the tolls of which are not sufficient to pay their own proper debts.

Still further, very serious questions are raised as to the rights of the Glasgow, Paisley, and Ayr Railway Company, the Glasgow and Greenock Railway Company, and the Glasgow, Crofthead, and Neilson Railway Company, or their successors, in reference to sums paid by these railway companies to the Road Trustees, and for which sums the railway companies have a valid claim of a certain character against the tolls or revenues of the roads or parts thereof. These questions depend inter alia upon the terms of the various railway Acts. Other questions still were raised regarding the effect produced by the Renfrewshire Road Trustees having, on 22d September 1864, divided the whole roads under their charge into three districts, and their keeping separate books and accounts for each district. These questions, again, involve an inquiry into the amount of debt on each district, and in some instances on each road, and very serious inquiries as to the rights of each individual creditor.

Now, all this mass of legal inquiry is sought to be raised in a simple petitory action, concluding for part of seven bonds dated in 1793 and subsequent dates, and directed solely against the Renfrewshire Road Trustees generally, no parties being called as defenders except Messrs Hoggan and Hill, the clerks of the General Trust, and who represent the whole trust, or congeries of trusts, administered by the Renfrewshire Road Trustees.

It very soon appeared to the Lord Ordinary that the rights of competing creditors could not be conclusively or effectually determined without calling these creditors into the field. The rights of the various Railway Companies could not be determined in an action to which they were no parties, and a general ranking of the trust creditors

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could not be effected without general states of the trust affairs, and without seeing the precise terms, if not the precise history, of every bond or debt affecting the trust. All this pointed to an action of a declaratory nature, very different from the present, to the calling of numerous other parties into the field, and probably to an extensive investigation into the funds and liabilities of the trust.

At the same time, the Lord Ordinary felt that the pursuers, who are in right of debts nearly eighty years old, and on which no interest has been paid for many years past, are entitled, were it for nothing else but to stop prescription, to a decree of constitution of their debts, either in terms of their bonds, or in terms of these bonds as affected and altered by subsequent legislation or by the minutes of trustees. He therefore could not dismiss the action as utterly incompetent, nor could he even appoint other parties to be called, for a mere decree of constitution against the Trustees could of course be obtained without calling other creditors of the trust.

The result of the first debate, therefore, which was confined to the defenders' first and second pleas, was that these pleas were allowed to stand over, to be discussed and disposed of along with the merits.

After making such inquiries as the parties thought necessary, both parties concurred in asking the Lord Ordinary to dispose by findings of certain questions of law arising upon the construction of the series of statutes which the Road Trustees have obtained, and of the minutes which have followed thereon. Both parties represented that such judgment, though not binding on absent creditors or absent parties, might probably save very expensive inquiry and very expensive proceedings.

The Lord Ordinary, who felt very anxious as far as possible to meet the views of the parties, heard an argument upon the statutes and minutes, and the result is that he has pronounced the findings contained in the preceding interlocutor. He has regarded the present action as a mere action of constitution, and in this view it appears to him that the course he has taken is not inappropriate, because the findings will determine the precise terms in which decree of constitution is to be pronounced, and the limitations with which it is to be accompanied.

The substance of the Lord Ordinary's opinion is that the pursuers, as creditors in the bonds libelled, are entitled to rank as creditors of the special roads mentioned in the bonds, and of no other roads, or at least—for the Lord Ordinary has gone no farther in the meantime—that they are not entitled to compete with, or to rank pari passu with, the creditors of other or different roads. The result is that the pursuers must be limited in the first instance to the Barnsford and Houston road, which apparently, under somewhat different or varied names, is the only road mentioned in their bonds.

The series of statutes relating to the roads of Renfrewshire is one of the most complicated and intricate series of statutes to which the Lord Ordinary has had occasion to refer. There are in all about a dozen statutes, which require to be read, compared, connected together, and contrasted, and, as was remarked at the bar, it is not easy to reconcile some of their provisions.

Qmitting several earlier Acts, the leading statutes are the following:—29 Geo. III., c. 79 (1789); 32 Geo. III., c. 121 (1792); 32 Geo. III., c. 68 (1792); 37 Geo. III., c. 162 (1797); 43 Geo. III., c. 96 (1803); 44 Geo. III., c. 52 (1804); 46 Geo. III., c. 71 (1806); 52 Geo. III., c. 55 (1812); 1 Geo. IV., c. 83 (1820); 6 Geo. IV., c. 108 (1825); 1 Will. IV., c. 138 (1830); 3 and 4 Will. IV., c. 116 (1833); 19 and 20 Vict., c. 85 (1856).

With these must be read the General Turnpike Act, 1 and 2 Will. IV., c. 43, and the previous General Act, being 4 Geo. IV., c. 49. In reference to the various railways interested in the road debts, the railway statutes must be referred to.

The Lord Ordinary may dismiss in a single word the minutes of the Road Trustees. He is of opinion that none of these minutes affect the rights, preferences, or ranking of creditors whose debts were contracted prior thereto, and he thinks that, reading these minutes in connection with the statutes, none of them can be fairly held to enlarge in any way the rights of the creditors under bonds previously granted. Of course the minutes of trustees creating or dividing districts may fairly enough be read as explaining bonds subsequently granted over districts so erected. But no such question occurs in the present case. The bonds sued for in the present action are all dated long before any of the minutes to which the Lord Ordinary was referred.

The Lord Ordinary thinks, therefore, that the minutes of the Renfrewshire Road Trustees do not really affect or change the rights of the pursuers as creditors under the bonds libelled. The whole question turns, and must turn, on the statutes.

The result of the Lord Ordinary's perusal of the statutes is, that they have not the effect contended for by the pursuers. They do not, in the Lord Ordinary's opinion, enlarge the rights given by the bonds themselves.

(1.) We start with the terms of the bonds themselves.

For the sake of shortness and distinctness, it will be sufficient to take one of these bonds, and the Lord Ordinary will take the first mentioned, being the bond to the College of Glasgow for £1000, dated 13th and 30th November, and 2d, 4th, and 5th December 1793. Although the other bonds are somewhat varied in expression, the same principle applies to all. No argument was founded on any variation in their terms.

The bond in question bears to be granted by the ‘ Trustees on the Turnpike Road from Barnfoot to Houston, and as such having power to borrow money for making and repairing the said road.’ It narrates the Act of 32 Geo. III., cap. 68, for enlarging the term and powers of the Act 30 Geo. II. It acknowledges the receipt of the loan of £1000 from the Glasgow College, which sum, with interest, it binds and obliges ‘ the trustees of the said road, and the rents, produce, and funds under their management,’ to repay. There are certain personal obligations superadded, with which in the present action we have nothing to do.

Now, the Lord Ordinary is of opinion that where a creditor takes a bond expressed in terms so narrow and limited, the onus lies exclusively upon the creditor to show that by statute, or by the act of the debtor, the bond came to have a wider or more extensive application. The money was borrowed by the trustees of a single road, for the use and purposes of that single road alone. It was borrowed for the making and repairing the road

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from Barnfoot to Houston, and for no other road whatever: and (apart from the personal obligation) it is the ‘rent, produce, and funds of the said road,’ and no other funds, which are liable in repayment. The pursuers say that other funds and other roads are now liable to repay the sum; but surely the onus is on the pursuers to show this, and certainly a very heavy onus it is. They must contradict, so to speak, the terms of their own bond.

(2) It is not said by the pursuers that any corroborative bond in larger or in broader terms was ever given by the Road Trustees. The bond of 1793 is the sole and only document of debt libelled for the sum therein contained. The creditor never asked, and the debtor never gave, any bond of corroboration, or any new bond over other roads or over other funds, or even with new obligants. If, therefore, the security is enlarged, it must be by the bare force of the Acts of Parliament. It is not disputed that the bond of 1793 was granted in precise accordance with the Acts at its date—that it was then lawfully confined to the Barnfoot and Houston road—and that if there had been no subsequent statute the real security could never have gone beyond that road. This makes the sole point the terms of the statutes. The same remarks apply, mutatis mutandis, to the other bonds libelled.

(3) The Lord Ordinary thinks there is nothing in the statutes, when fairly read and construed, to invert or alter the terms of the bonds.

The Lord Ordinary may safely omit any special commentary upon the statutes prior to the Act 6 Geo. IV., cap. 108 (1825.) A number of the provisions of these statutes were referred to as pointing to an accumulation or consolidation of the various road trusts, and as implying rather than expressing some vague intention that the debts should be massed as a whole, and the funds administered in cumulo.

It was hardly pretended, however, that this intention or inclination of the Legislature got any definite expression till the Act of 1825, although it is said (and denied) that the funds of the trust were, even previous to 1825, treated as cumulo funds, and interest paid from the tolls on all the bonds without regard to the particular tolls primarily liable for the special debts.

The 13th section of the Act of 1825, and subsequent sections, are specially relied on by the pursuers. The rubric of the 13th section is in these words—‘ Tolls liable for aggregate debt,’ and the pursuers argue that this was the true import of the clause, which they read as enacting that the whole cumulo tolls of the whole aggregate trusts shall be liable as one undivided fund for the whole aggregate or cumulo debt of the trust, without regard to the terms of special bonds.

The Lord Ordinary cannot so read the clause. On the contrary, he thinks it is carefully expressed (though certainly its expression is neither very grammatical nor very accurate) so as to keep the tolls of each respective road liable for the debts of that road. The word ‘respective’ is introduced no less than three times into the short clause, and although this word is not quite accurately placed, the Lord Ordinary is unable to give it any other force or meaning than that of preserving and separating the debts of each road or district of roads as distinct and independent charges upon the tolls of the respective roads or district of roads.

Again the word ‘aggregate,’ on which so much is founded in the rubric, does not occur in the clause itself. Indeed the word ‘respective’ seems to have been substituted for the word ‘aggregate,’ so that the rubric really gives no idea of the true enactment.

Nor do the following clauses in the least help the pursuers. On the contrary, they seem to the Lord Ordinary to be conclusive against them.

Much was founded upon the statutory form of the bond given in section 14. It is a general form of bond by the ‘Renfrewshire Road Trustees,’ and it was urged that the Trustees had no power to grant a bond over only part of their revenues, or over a single road.

But even if this were so, it would not affect past bonds, or bonds granted long before the statute of 1825. Future bonds might be catholic, but it would require a very different enactment to make limited bonds, lawfully limited under former Acts, change their whole character—it may be to the serious prejudice of whole classes of creditors. For example, the Barnsford Road might have been a profitable and prosperous road, and all the other roads poor or bankrupt. It would be startling to hold, from a mere short form of bond given in 1825, that creditors of 1793, who held good securities, must share them with other creditors of far later dates, who held bad securities, or none at all.

The true meaning of the clause prescribing the form of bond is that the security may be given in a short form, but it does not prohibit the defining or limiting what the security is to be. Where-ever the security is not catholic, this of course must be expressed.

Indeed it is remarkable that the Act of 1825 does not contain a power to borrow, and the reason is that it incorporates the Act 4 Geo. IV., cap. 49, which is the old General Turnpike Act. Now this General Act empowers (section 22) Road Trustees to borrow on the credit of the tolls of any particular road or roads, and in security to ‘assign the tolls on such road or any part or parts thereof,’ so that, in the Lord Ordinary's opinion, it is plain that even under the Act of 1825 special securities might be given even over a single road.

But when other sections of the Act of 1825 are read, this becomes still more clear; for section 15 empowers the trustees to divide the roads into districts, and to assign the tolls of any particular district as a security for money borrowed for the use of the particular district, and it specially enacts that the tolls and duties of each district shall be liable for the monies borrowed for that district only, and shall not be liable for monies either already borrowed or to be borrowed for other roads or for other districts. Of course this enactment is utterly inconsistent with the idea that there is to be only one aggregate fund and one aggregate debt.

And then, to make the matter still more complete, section 16 expressly enacts that without the consent of creditors their securities shall not be in anyways prejudiced, or lessened or extended, and that creditors who have lent money shall not be in anyways affected by allocations or divisions made under the Act. All this seems conclusive against the notion that the rights of the present pursuers might be altered or affected by the minutes of the Road Trustees, for it is not alleged that the pursuers or their authors were ever in any way parties or consenters to any of the said minutes.

Reference was made to the 20th, 21st, and 22d sections of the Act of 1825 in regard to the allocation of cumulo debt by the Trustees on particular

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districts of roads, the Trustees being empowered to allocate to each line or portion of road a fair and proper share of debt. It was argued that this implied that the whole debt in cumulo was chargeable on the whole roads, and that the Trustees might allocate it as they pleased for the purpose of regulating the tolls.

The Lord Ordinary, however, cannot so read the clauses. They do not make the whole debt an aggregate debt; they only provide that when a debt is aggregate it may be apportioned with a view to the regulation of the tolls. It is to be observed, however, that creditors and their securities are noways affected by such allocation (see section 16), which is a mere matter of book-keeping for the Trustees for regulating the raising and the lowering of toll-duties when the interests of creditors are not affected.

It is unnecessary to consider the other clauses of the statute of 1825, or the provisions of the subsequent statutes. It was hardly maintained that if the Act of 1825 does not affect the accumulation and aggregation of the whole debt, and establish a pari passu ranking, any of the subsequent statutes do so.

The Lord Ordinary, by the findings in the preceding interlocutor, has endeavoured to define, as far as he safely can, the rights of the pursuers. He does not mean to foreclose the question whether the pursuers may not have a subsidiary ranking, or a ranking secundo loco or ultimo loco, on roads free of debt, or after the creditors thereof are all paid or provided for. This question scarcely arises, and can scarcely be competently settled in this action. The Lord Ordinary's present leaning is against any such right, but it may depend upon other considerations or provisions which have not been presented to the Lord Ordinary, or brought under his notice.

The Lord Ordinary has appointed the case to be enrolled. His present impression is that all he can do in the present action is to give decree of constitution to the pursuers in the precise terms of their bonds, decerning against the Trustees only qua Trustees of the Barnsford and Houston road, and only so far as they have funds of that road applicable to the pursuer's debt. The Lord Ordinary's present view also is, that as the defenders have never resisted such decree, they will be entitled to expenses.”

17th June 1873.— Lord Gifford— Act. Balfour, Alt. Crawford.—The Lord Ordinary having heard parties' procurators on the remaining points in the cause with reference to the findings in the interlocutor of 25th July 1871—Decerns against the defenders, as clerks to and representing the Trustees on the turnpike roads mentioned in the bonds founded on by the pursuers, for payment of the sums concluded for, but that only so far as they have or may have funds in their hands derived from the tolls or revenues of the said roads available for such payment, and saving and reserving always the rights of all parties who have or may have prior claims or pari passu claims, as holders of portions of the said bonds or otherwise, upon the said tolls and revenues: Finds the pursuers liable in expenses, appoints an account thereof to be lodged, and remits the same to the Auditor of Court to tax and report.”

The pursuers reclaimed.

At advising—