Scottish Court of Session Decisions

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Cite as: [1880] ScotLR 17_632, [1880] SLR 17_632

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SCOTTISH_SLR_Court_of_Session

Page: 632↓

Court of Session Inner House Second Division.

Saturday, June 5. 1880.

[ Lord Craighill, Ordinary.

17 SLR 632

Kyd

v.

Waterson and Others.

Subject_1Process
Subject_2Multiplepoinding
Subject_3Competency.
Facts:

W. executed a voluntary trust-disposition for behoof of creditors. A non-acceding creditor raised an action of multiplepoinding in the name of the trustee, on the ground that undue preferences were being given to other creditors to her prejudice. Held ( rev. Lord Craighill) that such an action was incompetent.

Headnote:

On 9th June 1879 John Waterson, a farmer at Garth of Airntully, executed a trust-disposition in favour of George Kyd, an auctioneer at Perth, for behoof of his creditors. The trustee accordingly realised the estate in the autumn of 1879, and the proceeds amounted to about £2500.

Mrs Waterson, the mother of the truster, was one of the creditors to the amount of £525, and had not acceded to the trust, and accordingly, as she believed that undue preferences were being given to some of the other creditors to her prejudice, she raised an action of multiplepoinding in the name of the trustee George Kyd, as pursuer and nominal raiser, for the purpose of obtaining the adjudication of the Court upon the rights of the several creditors.

Kyd objected to the competency of the action, on the ground that there was no double distress or conflicting claims in regard to the funds in dispute, and that the same had not been rendered litigious by arrestments.

The Lord Ordinary ( Craighill) found that the action was not incompetent, and appended the following note to his interlocutor:—

“ Note.—The Lord Ordinary refers parties to the statement of Professor Bell relative to procedure under voluntary trust-deeds for creditors (Commentaries, 7th edition, vol. ii., 391):—‘When an estate vested in trustees is sold, and disputes arise as to the division of the price, the only practicable mode of settling matters is by a multiplepoinding raised either by the trustees or in their name; and there can be no doubt that such a proceeding is competent.’ This, the Lord Ordinary thinks, fully covers the present case if the question is to be decided upon authority.”

The trustee reclaimed.

At advising—

Judgment:

Lord Ormidale—The dictum from Bell's Commentaries which has been quoted is very comprehensive, and comes to this, that in every case where there is a private trust-deed granted, the creditors can come to the Court of Session to take the place of the trustee. There is no precedent for such a proceeding. I referred during the discussion to a case in which the trustee who had carried through a private trust and could not get his discharge from the acceding creditors, accordingly brought a multiplepoinding and exoneration to get his discharge from the creditors. That is a very different case from this, where the ground is that the trustee refuses to recognise the claim of one of the creditors. The creditors

Page: 633↓

are quite amicable, and the dispute, if any, is with the trustee. If the trustee under a private trust-deed refuses to do his duty, the creditors can sequestrate the estate of the truster. The complaining claimant is not bound by the trust-deed; he has not acceded to it.

This Court will not sustain a multiplepoinding unless it be raised upon good and sufficient grounds. To sustain this action would be to authorise useless expense. If there is any real difficulty the creditors can easily use sequestration. In such a case to bring a multiplepoinding is practically to ask the Court to administer the estate. We will recal the Lord Ordinary's interlocutor and dismiss the action.

Lord Gifford—I am entirely of the same opinion. This is a very striking proceeding, and no case like it can be adduced in the books. I am averse to introducing a new form of process, especially where there is this simple remedy that any creditor who is displeased with what is being done can use sequestration and so get the advantage of all the short and summary modes of procedure introduced by the Bankruptcy Act. The result of sustaining this attempted proceeding would be that any creditor could supersede the trustee in a voluntary trust and make this Court the trustee, with the anomalous result that this Court could be superseded by the trustee in a sequestration if such a process was resorted to.

Moreover, there is no real double distress here. Is the whole fund, amounting to over £2000, to be thrown into the Court of Session when the only dispute is about a sum of £150? I am of opinion that the whole proceeding is quite incompetent.

Lord Young—I am of the same opinion, and the only observation I wish to make is in reference to the passage from Bell's Commentaries cited in the Lord Ordinary's note. As an absolute and unqualified legal proposition I cannot assent to it. Bell cites no authority for it, and so far as we know or are informed none such exists. Limited and qualified it may be true. Your Lordship in the chair instanced the case of creditors acceding to a trust, and after the trustee had realised and distributed the greater part of the estate and the residue was claimed by several persons, observed that it would be a very convenient proceeding to raise a multiplepoinding. Here a non-acceding creditor proposes to supersede a private trustee and put the management of the trust-estate into the hands of this Court. By such a process the estate of any farmer in Scotland might be put under the management of the Court. Voluntary trustees cannot stand in the way of non-acceding creditors. The estate is in the hands of a trustee under a trust which does not affect them. They can use ordinary diligence against the estate. I am clearly of opinion that this process should be dismissed.

The Court recalled the Lord Ordinary's interlocutor, found the action incompetent, and dismissed it.

Counsel:

Counsel for Nominal Raiser and Reclaimer— Strachan. Agent— David Milne, S.S.C.

Counsel for Real Raiser and Respondent— Kinnear— W. J. Mure. Agents— Simpson & Wallace, S.S.C.
1880