Scottish Court of Session Decisions

James Davidson, merchant in Rothes, died there in 1868, leaving a trust-disposition and settlement by which he directed his trustees, inter alia, to pay to his widow Helen Findlay or Davidson a certain free yearly annuity, and on her death the whole estate, heritable and move-able, then in existence was to be realised and divided among his grandchildren then surviving per capita, share and share alike, who were nominated his residuary legatees, but under the declaration that the interest of his said residuary legatees should become vested at the period of his (the truster's) death, and be payable on their reaching the age of twenty-one years.

John Mantach and the Rev. Alexander M'Watt, the trustees nominated by the testator, accepted office.

One of the grandchildren of the testator alive at his death was James Davidson Sharp. He died unmarried and intestate in 1872, survived by his father James Sharp, and by several brothers and sisters, and his father thereby became entitled to one-half his estate, and his brothers and sisters to the other half. On the 14th March 1883 the testator's widow died, and accordingly James Sharp became entitled to one-half of share to which his deceased son was entitled.

On 26th September 1879 James Sharp by personal bond and assignation in security, on the consideration therein expressed, had conveyed to Davidson Sharp, then a clerk in Glasgow, another of his sons, the sums to which he was entitled from the estate of his deceased son James Davidson Sharp, as one of the residuary legatees.

Intimation of this bond and assignation in security was made to Mr Mantach, as trustee of James Davidson, on 1st December 1879.

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On 1st October 1879 James Jameson, solicitor, Elgin, raised an action against James Sharp. On the dependence of it he used arrestments in the hands of Mantach, James Davidson's trustee, on 22d October 1879. Decree was obtained in this action, and in execution of it Jameson on 4th June 1880 used arrestments in the hands of Mantach and M'Watt, as Davidson's trustees. Mr M'Watt died in November 1880, and in 1883 and 1884 Jameson used subsequent arrestments in execution in the hands of Mantach.

Mr Neilson, the commissioner of Davidson Sharp, who had gone abroad, having raised, in respect of the bond and assignation by James Sharp to him (Davidson Sharp), an action against Mantach concluding for the payment of the share of James Davidson Sharp's estate which fell to James Sharp, and became payable by the death of the annuitant Mrs Davidson, Mantach raised an action of multiplepoinding to have himself discharged of the sum falling to James Sharp by succession to James Davidson Sharp. Neilson claimed the whole fund. Jameson claimed to be ranked preferably to Neilson for the sum in the decree, with interest. Jameson maintained (1) that the intimation of the bond and assignation in security by James Sharp to Davidson Sharp was ineffectual, as being granted to a son when James Sharp was insolvent, and without just cause, and to his (Jameson's) prejudice; (2) that it was not duly intimated, because only intimated to Mantach and not to M'Watt. Neilson maintained that Jameson's arrestments of 1879 and 1880 were prescribed, and that his other arrestments were subsequent in date to his intimation of the bond and assignation in security. He denied the alleged insolvency at the date of the granting of the bond. It was admitted that James Sharp applied for cessio in June 1880, and that decree of cessio was obtained in October 1880. It was also admitted that Mantach had held the whole trust-funds, and that M'Watt, who was in bad health, did not act in the trust at the dates of the intimation and arrestments. In this action Jameson and Neilson lodged claims.

Jameson pleaded—“(1) In virtue of the decree and arrestments libelled, particularly the arrestment used on 4th June 1880 and subsequent dates, the claimant James Jameson is entitled to be ranked and preferred as claimed. (2) The bond and assignation founded on by the claimant Thomas Neilson was not duly intimated, and is inept. (3) The said bond and assignation is struck at by the Act 1621, cap. 18.”

Neilson pleaded—“(1) The said Davidson Sharp having acquired, as condescended on, right to the said share of the trust-estate of the said James Davidson, to the exclusion of all other claims, the present claim to the whole fund in medio should be sustained. (2) The arrestments founded on by the claimant Mr Jameson being invalid and inept, and the arrestments specially founded on being posterior in date to the intimation of the bond condescended on, and being also prescribed, his claim is unfounded, and should be repelled.”

The Act 1669, cap. 9, “concerning prescriptions,” provides that “all arrestments to be used hereafter upon decreets, registrate bonds, dispositions, or contracts not pursued and insisted on within five years after the laying on thereof, shall after that time prescrive;… and that all arrestments used or to be used upon dependence of actions shall likewise prescrive within five years after sentence is obtained in the said actions if the said arrestments be not pursued or insisted on within that time.”

On June 22d 1886 the Lord Ordinary ( Kinnear) repelled the first and second pleas-in-law stated for the claimant James Jameson, and allowed parties a proof of their respective averments applicable to the third plea-in-law for the said claimant.

“ Note.—The subject of competition in this case is the interest of James Sharp in the residuary estate of the late James Davidson, merchant in Rothes, and the competing claimants are a creditor, who claims a preference in respect of certain arrestments, and the factor and commissioner for Davidson Sharp, a son of James Sharp, who founds upon an intimated assignation.

“James Sharp in 1880 obtained a decree of cessio bonorum, and a trustee was nominated in whose favour he was appointed to execute a disposition. But no such disposition was in fact executed, and no further proceedings were taken in the process. The present process has been intimated to the trustee, but he has not thought fit to enter appearance. The only persons who were stated by the petitioner in the application for cessio to be creditors are the real raiser Mr Mantach and the claimant Mr Jameson, and all parties are agreed that their rights may be determined in this process, and that it is unnecessary to resort to the process of cessio for that purpose.

“The questions argued were, whether the arresting creditor has obtained an effectual preference, assuming the assignation to be valid? and if not, whether the assignation has been duly intimated, so as to divest the cedent?

“The arrestments used on 22d October 1879 and on the 4th of June 1880 are, in my opinion, prescribed (1 and 2 Vict. c. 114, sec. 22); and the assignation, assuming that it is valid and well intimated, is preferable to the later arrestments. It is maintained that prescription was interrupted by the decree of cessio in October 1880. But there is nothing in the proceedings upon which the claimant Jameson can found as being tantamount to his ‘pursuing and insisting on’ his arrestment within the statutory period of three years. The Sheriff found the petitioner entitled to the benefit of cessio on the 7th October, and pronounced decree of cessio on the 22d October 1880, and since then nothing appears to have been done in that process. Mr Jameson made no claim in the cessio, and took no step to make his arrestment effectual, or to found upon it for any purpose until he claimed in the present action. He appears to have objected to decree of cessio being granted on the ground that the fund now in medio was not included in the debtor's statement of his assets. But the Sheriff repelled the objection, 1st, because the petitioner was not at that date possessed of funds to meet his liabilities; and 2ndly, because in so far as he had a prospective interest in James Davidson's estate he had either been denuded of the same by the assignation to his son, or if that assignation were, as Mr Jameson maintained, challengeable as collusive, he would be denuded by the disposition omnium bonorum which he would be required to grant. It appears to me that there is nothing in

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these proceedings to keep alive the arrestment. It is said that under the Cessio Act then in force (6 and 7 Will. IV. c. 56) the decree operated as an assignation of the debtor's moveables in favour of the trustee for behoof of creditors. But that would not affect preferences already obtained either by a previously intimated assignation or by duly executed diligence, nor could it have any effect in perfecting uncompleted diligence.

“The next question is, whether the intimation has been duly intimated so as to be preferable to the later arrestment. The objection is that there were two trustees, and that the assignation was intimated to only one of them. But it is admitted that the whole trust-funds were in the hands of Mr Mantach, the trustee to whom intimation was made, and that his co-trustee Mr M'Watt died in November 1880, before any of the arrestments were used, which were still in force when this action was raised.”

Jameson reclaimed, and argued—(1) The arrestments were not prescribed. He had done all he could do. He had appeared in the cessio, the foundation of which were these arrestments, as a man who had laid a nexus upon this reversionary right. Looking to the condition of the fund he could have done no more. To take a formal step in a judicial proceeding was sufficient to satisfy the Act 1669 c. 9— Crawford v. Simpson, June 20, 1732, M. 11, 049; Thomson v. Simpson, July 23, 1774, M. 11, 049; Macmaster v. Campbell, July 9, 1802, M. 11, 051. In these cases prescription had been held interrupted by proceedings in a multiplepoinding, and that was really on all-fours with a cessio— Thomas v. Stiven, May 20, 1868, 6 Macph. 777. (2) The intimation was not good. It was made to only one of two trustees. He could not pay away without the consent of his co-trustee; Black v. Scott, January 22, 1830, S. 367; Hill v. Lindsay, February 7, 1846, 8 D. 472.

Argued for the respondent—(1) Prescription must operate, as Jameson had done nothing. He should have raised a furthcoming. (2) The intimation was complete. Mantach had the whole funds and the entire management under his control. So well did Jameson know that, that he took the arrestments in his hands only. Besides, intimation to one of several trustees is sufficient—Ersk. iii. 5, 5. It is, however, the assignee's interest to have intimation made to all the parties in order to interpel them from making payment to the cedent—Ersk. ib.; Watt's Trustees v. Pickney, December 21, 1853, 16 D. 279; Miller v. Learmonth, May 17, 1870 (H. of L.), 42 Scot. Jur. 418.

At advising—