Scottish Court of Session Decisions

William M'Laren, butcher, 103 Nicolson Street, Edinburgh, proprietor of the heritable subjects No. 10 and No. 12 Cowgate there, in security of a debt of £800 granted a bond and disposition in security for that sum over said subjects dated 21st April 1876, to which the trustees of the late Alexander Wright, Esq., of St Catherine's, Edinburgh, acquired right by an assignation dated 1st August 1877. In 1878 William M'Laren sold the subjects to Robert M'Laren under said burden of £800, and executed a disposition in his favour which contained in gremio the following clause—“Which sum of £800 it has been agreed is to remain on the security of the said subjects and others as aforesaid, and the said Robert M'Laren is to take upon himself the obligation to repay the same; and it is further agreed, as the said Robert M'Laren by acceptance hereof declares and agrees, that the personal obligation to pay principal and interest and penalty contained in said bond and disposition in security shall be a burden upon his title in the same manner as it was that of me, without the necessity of a bond of corroboration or other deed or procedure, and the personal obligation may be enforced against him by summary diligence or otherwise in the same manner as against me.” The disposition was duly recorded along with a warrant of registration in the following terms:—Register on behalf of Robert M'Laren, residing at No. 4 Hope Park Crescent, Edinburgh, in the Register of the Burgh of Edinburgh, J. & J. Gardiner, Edinburgh, S.S.C., agents.”

Mr Wright's trustees having failed to obtain payment of the sum contained in the bond upon demand, and to realise the subjects burdened, brought an action of maills and duties against Robert M'Laren and his tenants in order to get the rents of the subjects paid to them and Robert M'Laren found liable in the expenses of process.

M'Laren offered to let decree go out against him if expenses were not demanded, but he pleaded that, “not having rendered himself personally liable for the sums contained in and due by the said bond and disposition in security, and he not being liable therefor, decree of absolvitor should be granted in his favour with expenses.”

The Act 37 and 38 Vict. c. 94 (Conveyancing (Scotland) Act 1874) provides by section 47—“Subject to the limitation hereinbefore provided (sec. 12) as to the liability of an heir for the debts of his ancestor, an heritable security for money duly constituted shall, together with any personal obligation to pay principal, interest, and penalty contained in the deed or instrument whereby such security is constituted, transmit against any person taking such estate by succession, gift, or bequest, or by conveyance, when an agreement to that effect appears in gremio of the conveyance, and shall be a burden upon his title in the same manner as it was upon that of his ancestor or author, without the necessity of a bond of corroboration or other deed or procedure; and the personal obligation may be enforced against such person by summary diligence or otherwise in the same manner as against the original debtor” ….

Upon 17th January 1891 the Lord Ordinary ( Kyllachy) decerned against the compearing defender Robert M'Laren in terms of the conclusions of the summons, and found the pursuers entitled to expenses.

M'Laren reclaimed, and argued — The creditors could still sue the granter of the bond— University of Glasgow v. Yuill's Trustee, February 10, 1882, 9 R. 643. They were not entitled as under the 1874 Act to enforce the personal obligation against the disponee unless he had plainly taken that obligation upon himself. The Act was intended to simplify conveyancing and to dispense with a bond of corroboration where formerly necessary, not to enlarge the rights of creditors in every case. The clause used here was not stronger than that used in Carrick, &c. v. Rodger, Watt, and Paul, &c., December 3, 1881, 9 R. 242, which was held not to transmit the personal obligation. Even if it were stronger it was invalid to effect this purpose, as the creditor in the bond had not been a party to the disposition which contained the clause in question, and there was nothing in the disposition which the creditors could complete a title by infeftment. Nor was there anything on which they could take summary diligence against the disponee, whereas they could take such summary diligence against the disponer, the principal debtor who had not been relieved.

Argued for respondents—The clause here fulfilled all the conditions of the Act. It was a distinct agreement in gremio of the disposition to become personally liable for the debt. The clause in Carrick's case was only one of relief. Even there the Judges who had considered the question were equally divided as to the transmission of the personal obligation.

At advising—