Scottish Court of Session Decisions

This was a multiplepoinding, in which the Highland Railway Company were the pursuers and nominal raiser's, and in which the British Linen Company, Messrs Chisholm & Company, contractors, 11 Queeusgate, Inverness, and William Alexander M'Lean, storekeeper, Cabuie Road, Auchnasheen, Ross-shire, were the defenders, the British Linen Company being the real raisers.

The British Linen Company averred as follows’(Cond. 1) The firm of Chisholm & Company, contractors, Inverness, were employed by the Highland Railway Company to carry out the Dornoch Railway contract, and under said contract monthly instalments of the contract price fell to be paid to said firm by said Railway Company at the end of each month. (Cond. 2) The said firm of Chisholm & Company in the beginning of 1900 applied to the defenders the British Linen Company at their branch office in Inverness for a temporary overdraft … This overdraft was allowed on condition of Chisholm & Company agreeing that the Highland Railway Company should pay to the British Linen Company all monthly instalments payable to them (the said Chisholm & Company) by the Highland Railway Company in respect of the Dornoch Railway contract. Chisholm & Company accordingly addressed to the Highland Railway Company, and handed to the bank's agent, a letter in these terms—‘31st March 1900.—Please hold to the order of the British Linen Company Bank, Inverness, all monthly instalments due to us in respect of the Dornoch Railway contract. This order not to be withdrawn without the consent of the said bank. The receipts will be signed by us in the usual way, and as if the money were paid to us direct.’… (Cond. 3) The said Railway Company agreed to act upon said letter, and in compliance with the directions thereby given the monthly instalment due on 31st May, and all subsequent instalments prior to the instalment due on 31st October, were duly paid by the said Railway Company to the British Linen Company at their Inverness branch, and placed to the credit of Chisholm & Company's account. (Cond. 4) On 31st October an instalment of £316 was due to Chisholm & Company by the Highland Railway Company. On the morning of that day the Highland Railway Company received a letter from Chisholm & Company purporting to withdraw the authority previously given by them to the Railway Company to pay the said instalment to the bank. The said sum of £316 forms the fund in medio in the present action. (Cond. 5) Upon 1st November 1900 an arrestment was executed in the hands of the said Railway Company by virtue of a deliverance dated 31st October 1900 containing warrant to arrest on the dependence of a petition and action raised in the Sheriff Court at Inverness at the instance of the defender William Alexander M'Lean, storekeeper, Cabuie Road, Auchnasheen, Ross-shire, against the said Chisholm & Company purporting to arrest the sum of £300, less or more, addebted and resting-owing by the said Railway Company to the said Chisholm & Company, or to any other person or persons for their use or behoof. (Cond. 6) The Highland Railway Company have intimated that they have a claim against Messrs Chisholm & Company for about £30 in respect of carriage of materials, and this may form a claim upon the fund in medio. The said Railway Company, by letter dated 12th November 1900, addressed to the bank's agent at Inverness, admitted that a sum of £316 was due to Messrs Chisholm & Company, but stated that in view of the said letter of 31st October from Messrs Chisholm & Company purporting to withdraw the authority previously given, and of the said arrestment, it was impossible for them to hand over to the bank their cheque for £316 already signed until their right to it was established in an action of multiplepoinding. The said Railway Company still refuse to pay to the real raisers the said instalment of £316, and the present action has been rendered necessary, and

Page: 585↓

is brought in order to have the rights of parties determined.”

The pursuers and nominal raisers, the Highland Railway Company, objected to the competency of the action, and stated that under their contract with Chisholm & Company the monthly and all other payments were conditional upon the contractor's obligation being fulfilled, that there was no instalment due on 31st October except under the conditions of the contract, and that few, if any, men were working on that date, and the contractors were then hopelessly insolvent. They denied that on 31st October an instalment of £316 was due to Messrs Chisholm & Company by them, and explained that by the contract it was provided that a certificate by the company's engineer should be a condition-precedent to said instalments becoming due, and that no such certificate was granted. The estates of Messrs Chisholm & Company were sequestrated on 13th November 1900. The Highland Railway Company set forth certain claims, due and contingent, made by them against Messrs Chisholm & Company, and averred that they were entitled to impute towards satisfaction of these claims any debts which might be due by them to Messrs Chisholm & Company.

The Highland Railway Company pleaded, inter alia—“(1) There being no fund in medio, the action is incompetent, and ought to be dismissed, with expenses.”

The British Linen Company (the real raisers) pleaded, inter alia, as follows—“(2) The nominal raisers' objections are irrelevant.”

Argued for the nominal raisers (Highland Railway Company). There was here no fund in medio, in respect that the condition-precedent to the instalment on 31st October becoming due, viz., the granting of the engineer's certificate, was not fulfilled. The fact that there was no fund in medio rendered the action incompetent. In the cases cited by the real raisers there had originally been a fund in medio in existence.

Argued for the real raisers (British Linen Company). The objection that there was no fund in medio was not a valid objection to the competency of the action— Crombie v. Christian's Trustees, May 13, 1830, 8 S. 745; Miller v. Ure, June 23, 1838, 16 S. 1204; Mackay's Manual of Practice, 386.