Scottish Court of Session Decisions

By disposition dated 26th and recorded 29th May 1876, William Stewart, nurseryman, Dundee and Broughty-Ferry, in consideration, inter alia, of the sum of £2000 sterling, with interest and penalty as therein mentioned, which was declared to be a real burden upon and affecting the lands and subjects thereby conveyed, disponed to Henry Gibson, solicitor in Dundee, certain heritable subjects situated near Broughty-Ferry, in the county of Forfar. By minute of agreement between the parties, dated 11th March 1876, and referred to in said disposition, and held to form part thereof, and also by a personal bond granted by Gibson to Stewart of date 26th March 1876, it was provided that the said sum of £2000 should remain a real burden on the subjects until Gibson's title should be made unchallengeable. In February 1879 Gibson's estates were sequestrated, and Robert Bower Ritchie, accountant in Dundee, was appointed trustee thereon.

Stewart brought a petition before the Sheriff-Substitute of Forfarshire, praying him to grant warrant to poind and distrain All and Sundry the readiest moveable goods, &c., of the said Henry Gibson, or forming part of his estates or sequestrated estates, and to “make payment thereof to account of or to the avail and quantity of the principal sum of £2000, being the amount of the real burden created and constituted in favour of the pursuer on and over the said lands, subjects, and others by disposition granted by the pursuer in favour of the defender, and specified in the said condescendence, penalty specified in the said disposition, and the interest of the said principal sum at the rate of £4, 10s. per centum per annum from and after the term of Martinmas last, the terms of payment thereof being always first come and byegone.” Gibson's trustee entered appearance, and a record was made up in the action. The defender made this statement—“That the interests of the pursuer may be fully protected, and that there may be no pretext for asking decree in this action, the defender is prepared, and now offers, on his being allowed, to sell the whole effects which belonged to the said Henry Gibson, situated within or upon the said heritable subjects, for behoof of whom it may concern, and that at the sight and to the satisfaction of any person to be named by the Court to hold the proceeds, subject to any claim which the pursuer may lodge in the sequestration, to be adjudicated upon by the defender, or under appeal from his judgment, all in terms of the Bankrupt Statute.”

The pursuer pleaded—“(1) The sums condescended on, and in any event the interest of the real burden mentioned in the petition, being in the circumstances presently exigible, or at least not being a contingent but a certain debt, the pursuer is entitled to the warrant and decree craved. (2) In any event, pursuer having the rights condescended on, is entitled to have the goods and others sought to be poinded, or the proceeds thereof, applied or set apart in payment or security pro tanto of the sums due and to become due to him.”

The defender pleaded—“(2) The pursuer has not averred, or at least has not produced, any title warranting him to ask a decree of poinding the ground as prayed for. (7) The claim of the pursuer being contingent, as before mentioned, and the contingency not having been purified, the sequestration of the bankrupt affords no pretext for the raising of this action, and the same ought to be dismissed as incompetent, or at least as prematurely raised by the pursuer, and the pursuer found liable in expenses. (8) In any event, procedure under this action ought to be sisted till the pursuer shall have purged the contingency hereinbefore mentioned, and in the meantime the defender ought to be allowed to proceed with a sale of the moveables in question at the sight of the Court, and under reservation of the claim of the pursuer and all concerned to the proceeds of the sale, and under reservation also in the meantime of all questions of expenses. (9) At the utmost, decree in this action can only go out in terms of the prayer of the petition, on the understanding that the proceeds of the poinded effects when sold shall be consigned in the hands of the Clerk of Court, under reservation of the claims of all concerned, and subject to the orders of the Court in this action, and under reservation also in the meantime of all questions of expenses.”

On 22d May 1879 the Sheriff-Substitute ( Cheyne) pronounced this interlocutor:—“Grants warrant as craved in the prayer of the petition, with this variation—that instead of making payment as craved, the officer who carries out the warrants shall consign the free proceeds with the Clerk of Court, to abide the orders of Court, and decerns ad interim to this effect, reserving to dispose

Page: 142↓

of the money that may be consigned, and to pronounce further as may be just.” The Sheriff ( Heriot) on appeal adhered. The warrant to poind the ground was accordingly executed, the execution bearing that the decree had been obtained against the defender for not making payment of the principal sum of £2000 and the interest thereof, and the Sheriff-Substitute having granted a warrant of sale, “the proceeds of the sale to be consigned in terms of the order of Court,” the goods were thereafter sold, and the pursuer duly reported the sale.

On 1st October 1879 the defender lodged a minute in which he submitted that the poinding and sale following thereon were irregular and illegal, in respect the officer in many instances appraised in one sum various articles which were of different kinds and values, thus leading to the effects being exposed in corresponding lots, to his consequent loss and injury, and he therefore craved that the officer at whose sight the poinding was executed be not allowed the expenses of the poinding and sale, and that in the meantime he should be ordained to consign with the Clerk of Court the full amount of the roup roll, including the value of effects adjudged over to the poinding creditor, except in so far as consignation had already been made.

On 13th October the Sheriff-Substitute pronounced this interlocutor:—“Finds that the proceeds of the sale amounted to £163, 10s., whereof the sum of £13 is still in the pursuer's hands, being the value of articles knocked down to him as the poinding creditor at the appraised values … Finds that there is now in the hands of the Court the sum of £128, 7s. 8d., and that this sum may be taken as representing the free proceeds of the sale exclusive of the £13 above mentioned, less the dues of the consignation… . . Grants warrant to the Clerk of Court to pay out of the consigned fund … to the pursuer the sum of £31, 1s. 3d., being the balance of the half-year's interest due at Whitsunday last on the bond mentioned in the proceedings after deducting income-tax, and also the above-mentioned sum of £13, and decerns ad interim; and quoad ultra continues the cause.”

He added this note—“While disposed to think that there have been some irregularities in the way in which this poinding has been carried out, which would have entitled the trustee or anyone interested to interdict the sale, I do not see how, when matters have been allowed to go so far, I can possibly treat the sale as null and void; nor do I feel justified in entertaining the trustee's motion that in respect of these irregularities all the expenses incurred in connection with the sale should be disallowed. It seems to me that the trustee's remedy, if he has one, must be sought by an action of damages against the officer.” … .

On 12th November 1879 the pursuer lodged a minute craving the Court to grant decree for payment to him out of the balance of the consigned fund of the interest due to him on his bond for £2000 for half-year ending at Martinmas 1879, amounting, less income-tax, & c., to £40, 8s. 3d., and the Sheriff-Substitute decerned accordingly.

On 10th March 1880 the pursuer lodged a further minute, in which he stated, inter alia—(1) That the heritable subjects in question were recently sold for £2050, i.e., for £50, under burden of the debt of £2000 and consequents from date of entry. (2) That the interest on the said £2000 from Martinmas 1879 to Candlemas 1880, amounting to £20, 0s. 9d., was unpaid and payable out of the consigned fund. (3) That he had had to pay certain sums to the superior of said subjects to prevent declarator of irritancy of the fen ob non solutum canonem, viz., certain feu-duties, and a sum of £8, being a composition payable on death of last vassal of said subjects. To this minute answers were lodged by Mr Ritchie. Answers 1 and 2 were, “Believed to be true.” 3. The payments to the superior were objected to, and it was explained that “the superior had no right to full or preferable payment of that sum, the same being simply a personal claim.”

The Sheriff-Substitute on 30th March 1880 pronounced the following interlocutor:—“Finds that the heritable subjects to which the action relates were recently exposed to sale by the liquidators of the City of Glasgow Bank in virtue of an absolute disposition by the bankrupt in favour of the said bank, and were purchased, under burden of the pursuer's debt of £2000 and consequents from the date of the purchaser's entry (which was at Candlemas last), for the sum of £50, which sum did not cover the expenses of the sale and the conveyance to the purchaser: Finds that the interest due to the pursuer for the period from Martinmas 1879 to 2d February 1880 is unpaid, and that said interest amounts, after deducting income-tax, to £20, 0s. 9d… . Finds that the pursuer has recently made the following payments to the superior of the subjects, viz., the sum of £29, 5s. 10d., being the amount of the feu-duties payable therefrom for the period from Whitsunday 1876 to Martinmas 1879, with progressive interest, and the sum of £8, being the composition payable on the death of the last entered vassal, and that in virtue of the assignation by the superior in his favour he is entitled to have these sums repaid to him out of the proceeds of the moveables sold under his poinding, now in manibus curiæ, under deduction, however, of the following sums (amounting together to £3, 9s. 11d.) of which under the feu-contract the superior was bound to relieve the vassal … . And as the result of these findings, Finds that the pursuer is now entitled to an order to uplift from the consigned fund the sum of £48, 15s. 11d. (forty-eight pounds, fifteen shillings, and elevenpence sterling); and grants warrant to the Clerk of Court to make payment to him of that sum accordingly.”

This note was added—“It is quite true that the feu-contract in the case of Morrison's Trustees v. Webster (16th May 1878, 5 R. 800) contained a declaration, which does not occur in the one before me, that the entry-moneys stipulated for on the entry of heirs or singular successors should be real burdens on the subjects, and recoverable as debita fundi; but a perusal of the opinions delivered by the Lord Justice-Clerk and Lord Gifford, who formed the majority in that case, has satisfied me that the judgment would have been the same though the specialty to which I have referred had been absent, for both these learned judges were, as I read their opinions, prepared to hold, that where in an old feu-contract the vassal undertakes as one of his obligations to pay, say, a duplicand of the feu-duty as composition on the entry of each heir or singular successor, the composition so agreed to be paid forms an

Page: 143↓

integral condition of the grant, just as much as the feu-duty itself does, and is ex sua natura a real burden without any clause declaring it to be such. The case in question is, therefore, in my opinion, a direct authority for negativing the defender's contention that the composition of £8 which the pursuer paid, and quoad which he is now in the superior's place, is not a debitum fundi, but merely a personal debt of the vassal.”

On appeal the Sheriff adhered.

Ritchie appealed to the Court of Session, and argued—The £2000 had not been well constituted a real burden; the minute of agreement had not been put on record, and the burden on the land was therefore not sufficiently definite—1 Bell's Com. (M'Laren's ed.) 727, 728; 37 and 38 Vict. c. 94 (Conveyancing (Scotland) Act 1874), sec. 30. The case must be treated very strictly, as it was a competition between a heritable creditor and a trustee in sequestration. It was incompetent to poind the ground for a contingent debt— Lady Ednam, 1628, M. 8128 and 10,545; Stair, ii. 5, 7, 8; Ersk. iv. 1, 2, ii. 8, 32. The action was clearly incompetent as regarded the principal sum of £2000; and at the date when the peti tion was presented no interest was due—2 Ross’ Lectures, 429, 439; Stair, iv. 23, 18; Raploch, 1625, M. 1277. There was nothing in the execution of the poinding or the warrant of sale to show that the poinding was not for principal as well as interest. The interim payments of interest were incompetent. The payment out of the consigned fund of £8 to the superior as composition was incompetent; it was merely a personal claim— Morrison's Trustees v. Webster, 16th May 1878, 5 R. 800. The form in which the poinding had been carried out was also incompetent, and was sufficient to invalidate the whole proceedings, articles having been slumped together and their value being thereby grossly depreciated— M'Knight v. Green, 27th Jan. 1835, 13 S. 342.

The respondent (pursuer) answered—The principal sum had been well constituted as a real burden. The pursuer did not insist on this poinding as for the principal, and he had never done so, as was clear from the interlocutor of 22d May 1879 and subsequent proceedings. A heritable creditor was entitled to poind for payment of a debt not yet due if he did not ask for payment till it was due— Lady Ednam, 1628, M. 8128, 8129; Douglas of Morton, 1662, M. 1282 and 8130; Lady Pitfoddels, 1674, M. 10,548. He was in this case bound to come forward before his debt became due in order to preserve his preference over the trustee in sequestration— Royal Bank v. Bain, July 6, 1877, 4 R. 985; Campbell's Trustees v. Paul, Jan. 13, 1835, 13 S. 237; Hay v. Marshall, July 7, 1824, 3 S. 157, aff. 2 W. and S. 71; Barstow v. Mowbray, March 11, 1856, 18 D. 846. The interim payments of interest were competently awarded, and the appellant's pleadings in the Sheriff Court showed that he had not there disputed this—he had no right to do so now. The composition of £8 had rightly been paid out of the consigned fund; it was a condition of the tenure just as much as the feu-duty— Morrison's Trustees v. Webster, N.S. 2 Ross’ Lectures, 302. As to the mode in which the sale was carried out, it was admittedly somewhat irregular, but not sufficiently so to invalidate the proceedings. The objection taken by the defender in the Sheriff Court was only that the officer's fees should not be paid on that account; his proper remedy was to have interdicted the sale.