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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Gallacher v. Ballantine [1876] ScotLR 13_496 (6 June 1876)
URL: http://www.bailii.org/scot/cases/ScotCS/1876/13SLR0496.html
Cite as: [1876] ScotLR 13_496, [1876] SLR 13_496
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SCOTTISH_SLR_Court_of_Session
Page: 496↓
Court of Session Inner House First Division.
Sheriff of Edinburghshire.
v.
Facts:
A got decree against B for £8, 1s. 1d., of which payment was made upon a decree of furthcoming, after arresting in the hands of C, a creditor of B. Thereafter, B having been meantime made notour bankrupt, B, another creditor, got decree against A for £7, 15s., the proportion of the £8, 1s. 1d. due to him, comparing his debt against B with A's. A then proceeded to get further payment of his debt by executing a poinding of B's goods under the former decree. In a petition at B's instance for interdict against a sale of the poinded goods, on the ground that the original decree had been implemented by the diligence of arrestment, and that the poinding was therefore wrongous; that no notice of the poinding had been given to B; and (3) that under the statute, section 12, D had not been in titulo to recover from A.— Held (1) that the decree had not been implemented, and that A merely held as a trustee for other creditors; (2) that no notice was necessary; and (3) that the merits of the question between A and D could not be opened up.
This was an appeal from the Sheriff Court of Edinburghshire in a petition at the instance of John Gallacher, slater, West Calder, against L. H. Ballantine, draper there (respondent) praying for warrant to prohibit the respondent “from carrying away, selling, or disposing of, or interfering with” certain articles of furniture belonging to the pursuer, which had been poinded under the following circumstances:—
On 6th January 1875 Ballantine obtained a small-debt decree against Gallacher for £8, 1s. 1d.; and on 16th January he used arrestments upon that decree in the hands of a person named Taylor, a debtor to Gallacher, and having pursued a furthcoming, on 5th March he got decree. On 13th March Gallacher, having been incarcerated by Field & Allan, another creditor, was made notour bankrupt. Three days thereafter Taylor, the arrestee, paid Ballantine £8, 1s. 1d. under the decree of furthcoming. Upon 18th June Field & Allan, relying on the provisions of the 12th section of the Bankruptcy Act, took proceedings against Ballantine, for the purpose of compelling him to give them a share of the fund which he had recovered, proportioned to £114, 18s. 1d., the amount of their debt against Gallacher, the ground of this proceeding, which was also in the Small Debt Court, being the notour bankruptcy of Gallacher. The Sheriff decided in favour of Field & Allan, and against Ballantine, and on 30th June Ballantine was compelled on that decree to part substantially with the whole amount which he had recovered. In these circumstances Ballantine, having in the result obtained no more than 8s. 8d., proceeded to use further diligence and execute a poinding
Page: 497↓
of Gallacher's furniture, which the latter was now by this petition endeavouring to stop. The Sheriff-Substitute ( Hallard) pronounced the following interlocutor:—
“Finds that the poinding, of which complete execution by sale is now proposed to be stopped by interdict, proceeds on a decree pronounced in foro at the respondent's instance against the petitioner: Finds that the petitioner has failed to instruct aliunde payment of the debt due by him to the respondent under said decree except to the extent of the difference (being 8s. 8d.) between the sum of £8, 1s. 1d. arrested and recovered by the respondents in the hands of Taylor, a debtor of the petitioner, and the sum of £7, 12s. 5d., paid by the respondent out of said arrested sum to Field & Allan, a creditor of the petitioner, as verified by the decree and receipt thereunto appended, No. 8 of process: Finds that the petitioner has failed to shew that by selling the goods under the present poinding the respondent will recover more than will amount to the respondent's just debt against him after crediting him with the 8s. 8d. still remaining in the respondent's hands as aforesaid: Therefore refuses the prayer of the petition, dismisses it, and decerns.
Note.—When the petitioner applied ex parte for interim interdict to stop his creditor's diligence against him on the ground of payment, he was told that unless he could instantly instruct his averment the diligence must be allowed to take its course. No interim interdict therefore was granted.
A warrant of service, however, was given, and a record has now been closed. The result is, that while by the respondent's admission the petitioner instructs his averment of payment aliunde, he is obliged to take that admission with its qualification that the respondent having recovered £8, 1s. 1d. from the petitioner's debtor, Taylor, had immediately thereafter to pay £7, 12s. 5d. thereof to the petitioner's creditors, Field & Allan, leaving the difference, 8s. 8d., at the petitioner's credit in the hands of the respondent. Even without the production of any document, the petitioner founding on the respondent's admission would be bound to take its qualification along with it; but the documents are in process. It appears that Field & Allan incarcerated the petitioner, and then (under section 12 of the Bankrupt Act) made the respondent account to them for the fund arrested by him in proportion to the excess of their debt over his. Their debt was £114, 18s. 1d., while his was £8, 1s. 1d. The pari passu ranking left no more in his hands than 8s. 8d. It is not pretended that this small residue, when added to the value of the poinded goods, will more than pay the respondent's debt.”
On appeal by the petitioner to the Sheriff, the foregoing interlocutor was adhered to.
Thereupon the petitioner appealed to the First Division of the Court of Session, and argued—The action of the poinder was wrongous, because the decree had been implemented by the payment upon the decree of furthcoming, and the petitioner should have been convened or notice sent him before a poinding was executed. Field & Allan were not creditors “judicially producing liquid grounds of debt in terms of the 12th section of the Bankruptcy (Scotland) Act 1856,” and were not therefore entitled to recover from Ballantine.
Authorities— Shiell v. Mossman, November 7, 1871, 10 Macph. 58; Rowan v. Mercer, May 12, 1863, 4 Irvine 377; Railton, &c. v. Gray, February 4, 1837, 15 S. 487.
At advising—
The first objection taken by the appellant is, that the original decree obtained by Ballantine against Gallacher was implemented and the debt paid. I think that is a bad objection; the debt was not paid, except to the extent to which it ultimately turned out that Ballantine was entitled to retain the sum paid to him. I agree with the argument of Mr Thorburn, that upon the 5th March, when Ballantine was paid the £8, 1s. 1d., he got payment, as trustee, for any creditor who might come in afterwards to make a claim under the operation of the statute.
The second objection is, that Ballantine was not entitled to go on with his diligence without some preliminary proceeding in the way of giving notice to Gallacher. I cannot find any authority for that in the statute, and the common law does not make it necessary. When a man gets a small-debt decree—the debtor being personally present—no charge requires to be given, but the decree operates as a warrant for every species of diligence, and if one kind of diligence is not sufficient, another may be used on the same warrant. The diligence of furthcoming has been insufficient in this case, and therefore the creditor requires to have recourse to the second diligence of poinding.
But, then, it is said, lastly, that Ballantine did wrong in paying away money to any extent, and that Field & Allan were not entitled to a pari passu preference in terms of the 12th section of the statute. That question entirely depends on the construction of the statute. The section is as follows—“Arrestments and poindings which shall have been used within sixty days prior to the constitution of notour bankruptcy, or within four months thereafter, shall be ranked pari passu, as if they had all been used of the same date; provided that, if such arrestments are used on the dependence of an action or on an illiquid debt, they be followed up without undue delay; provided further, that any creditor judicially producing in a process relative to the subject of such arrestment or poinding, liquid grounds of debt, or decree of payment within such period, shall be entitled to rank as if he had executed an arrestment or a poinding, and in case the first or any subsequent arrester shall in the meantime obtain a decree of forthcoming and preference, and thereupon shall recover payment, or a poinding creditor shall carry through a sale, he shall be accountable for the sum recovered to those who, by virtue of this Act, may be eventually found to have a right to a ranking pari passu thereon, and shall be liable to an action at their instance for payment to them proportionally, after allowing out of the fund the expense of recovering the same.” The question is, whether Field & Allan are in the situation of creditors,
Page: 498↓
I am therefore of opinion upon the whole matter that this diligence of poinding must be allowed to proceed, and that the Sheriff's interlocutor should be affirmed.
The Court adhered.
Counsel for Petitioner (Appellant)— M'Kechnie. Agent— William Paterson, L.A.
Counsel for Respondent— Thorburn. Agents— Wallace & Foster, L.A.