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United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Dame Either Gray, Widow and Executrix of Sir James Gray, Bart. her late Husband, deceased v. Edward Callander, Writer in Edinburgh [1724] UKHL Robertson_483 (1 April 1724)
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Cite as: [1724] UKHL Robertson_483
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SCOTTISH_HoL_JURY_COURT
Page: 483↓
(1724) Robertson 483
REPORTS OF CASES ON APPEAL FROM SCOTLAND.
Case 109.
v.
Subject_Assignation General. —
An assignation to a creditor of as much of the first and readiest of the rents of his lands that should happen to be due to him at the time of his decease, as would satisfy and pay a certain sum, gave no preference in a competition of creditors after the debtor's death.
Subject_Creditors of a defunct — Act of Sederunt, 1662. —
After expiration of six month from the debtor's death, one creditor cites the executor in an action of constitution on the 18th of June, and same day the executor cites that creditor, and the general assignee above-mentioned, in a multiple poinding: the latter afterwards, on the 27th of June, cited the executor in an action of constitution; the creditor, giving the first citation, also got the first decree of constitution, and is by the Court preferred to the other; but the judgment is reversed, and both are preferred pari passu.
After the determination of the appeal, No. 1, of this collection, by which the Duke of Hamilton was ordered to pay to Sir James Gray, Bart, the sum of 1000 l. with interest thereof, upon an agreement of the parties, Sir James advanced so much money as, with the principal and interest then in arrear upon the said bond, made up 1400 l. And for securing the repayment thereof, the Duke, on the 25th of March, 1709, executed a bond to Sir James in the sum of 1400 l. of principal, payable with interest on the 15th of May, 1710; and in that bond the duke assigned to Sir James as much of the best and readiest of the rents of the Dukedom of Hamilton, whenever he should happen to succeed thereto, as would satisfy the said 1400 l. and interest. Of the same date, the duke executed another deed, by which he assigned to Sir James as much of the first, readiest, and best of the rents, or arrears of rents of his lands in Scotland, that should be due to him at the time of his decease, and as much of the first and readied of all his moveable goods, debts, and sums of money, and others whatsoever, that should happen to pertain and belong to him at the time of his decease, in case his mother should survive him, as should be sufficient to pay the said bond.
The duke, in his lifetime paid several sums of money to account of the interest of the said sum of 1400 l. but died in November, 1712, in the lifetime of his mother, and no part of the principal money was paid. The Court of Session, in March thereafter, appointed one Crawford, factor, to receive the arrears of rents due to the duke at the time of his death; and to this factor Sir James intimated, in due form, the assignments of the arrears of rents made by the duke in his favour.
Page: 484↓
The late Duke of Hamilton was also indebted to the respondent in the sum of 900 l. sterling with several years interest upon a bond dated 22d November 1703; and upon this bond the respondent had raised and executed letters of horning against the duke in 1706.
The present Duke of Hamilton was confirmed executor to his father deceased on the 16th of June 1722, and immediately gave up an inventory of all his father's personal estate, and particularly of the arrears of the rent that were due at the late duke's death, and which had been received by the factor, or continued in the hands of the tenants. His grace also raised an action of multiple poinding before the Court of Session, in which he called all his late father's creditors as parties.
In this action of multiple poinding both the appellant and respondent received citations on the 18th of June 1722; and on the same day the respondent cited the duke as executor in an action of constitution of his debt before the commissaries of Edinburgh. On the 4th of July the commissaries sustained process at the respondent's instance; on the 17th of July, they found the debt proved, and decerned against the executor; but the final decree of constitution, was not given out till the 21st of that month. Upon this decree, the respondent took out letters of horning and charged the executor; but further proceeding was stopped by the multiple poinding.
The appellant's husband on the 27th of June 1722, also cited the duke before the commissaries, and applied by petition to be conjoined in the respondent's action, but this was refused. Sir James Gray, on the 17th of July, obtained an interlocutor for sustaining process against the executor; but did not follow out a decree for payment of the debt.
The action of multiple poinding coming to be heard before the Lord Ordinary, Sir James Gray, insisted that by virtue of the assignation by the late Duke of Hamilton in his favour, of all the personal estate, he should die possessed of, and particularly of all the rents of his estates that should be due at the time of his death, Sir James, ought as to the personal estate to be preferred to all other creditors merely personal. The respondent on the other hand founded on his prior citation before the commissaries, The Lord Ordinary having reported this cause, the Court on the 18th of January 1723, “preferred the respondent.” Sir James Gray reclaimed, and the Court, after answers for the respondent, on the 8th of February 1723, “ found that Mr. Callander had no right to the heirship moveables by virtue of his decree before the commissaries; and found that the petitioner Sir James Gray could have no preference upon his assignation, but remitted to the Lord Ordinary to hear parties, how far the petitioner and Mr. Callander upon their respective diligences were preferable pari passu or not.”
Sir James Gray in the mean time died, having left the appellant his executrix, and the cause being transferred against her, upon report of the Lord Ordinary, a hearing was ordered by the Court
Page: 485↓
Entered, 21 Jan. 1723–4.
The appeal was brought from “several interlocutory sentences of the Lords of Session of the 18th of January, the 8th of February, and 15th of November 1723.”
Heads of the Appellant's Argument.
As Sir James Gray had a judgment against the duke, so long ago as 1708, and might have then sued it to execution, and recovered his payment: so out of friendship to his grace, he took the security in question, in order to secure his payment in all events; and the duke having executed the said assignment for a consideration so beneficial, Sir James ought to have the benefit thereof, and be preferred to any creditor who had no such security.
Sir James by this general assignment had a hypotheck upon or conventional pledge of all the assignor's personal estate, for payment of his debt; and consequently the present duke who was confirmed executor, ought to be considered as a trustee for the assignee, so far as his debt extends; and his possession of the personal estate ought to be for the benefit of the assignee, and the executor being in the eye of the law the same person as the deceased, it is not necessary to give notice to him. Nor does it alter the case, that the assignor continued in possession, because the assignment was of such things as could not admit of a present possession, viz. the personal estate, the duke should die possessed of. And Sir James having given notice of his assignment to the factor appointed by the Court of Session to receive part of the very subject of the assignment, Sir James ought to be preferred to any other creditor as to these arrears, the factor being the only person to whom such notice could properly be given.
A debt thus fairly contracted, and secured by such an assignment, if it should not give a preferable right to the assignee, ought at least to entitle him to come in equally with any other creditor, and be paid in a due proportion, as far as the assets will go.
Act of Sederunt. 28 Feb. 1662.
It is true that in order to prevent one creditor, who might be in a good correspondence with an executor, from carrying off all the effects to the hurt and exclusion of the others, an act of sederunt in 1662, was made by the Lords of Session, declaring “that all creditors of defunct persons using legal diligence at any time within half a year of the defunct's death, by citation of the executors and intrometters with the defunct's goods, &c., shall come in pari passu with any other creditors, who have used more timely diligence.” But there is no law or statute which enacts, that after the expiration of the six months, a creditor giving a citation one day, or one hour before another creditor shall be paid in the first place. The appellant conceives, that all creditors, having an equal right by the nature of their debts, who appear before assets are actually applied, ought to be paid equally; the
Page: 486↓
Sir James in this case, not only cited the executor a few days after his confirmation, but had prayed to be admitted to plead preference in the respondent's suit, and had even obtained sentence against the executor, as soon as the respondent, and all this before any payment made by the executor, for to this hour he is possessed of the whole effects, and has not paid any part to the respondent.
The citation in the multiple poinding was given to Sir James, and to the respondent on the same day, that the respondent cited the duke before the commissaries: and this citation by the executor to both creditors, ought to be considered as equivalent to, and the same as if Sir James had then cited the executor, since it put a stop to any effectual proceedings before the Commissary Court, and brought the matter to be properly determined in the Court of Session; and Sir James in that Court could have Recovered a decree, just as if he had cited the executor.
Heads of the Respondent's Argument.
The law of Scotland, for the benefit of commerce, has long since repudiated all private sales, or impignorations of goods or effects, unless the goods and effects so sold, or pledged be actually delivered to the buyer or creditor, or to some third person in trust for him. It is certain that the late Duke of Hamilton might, during his life, sell or dispose of any part of his personal estate, and that the same was subject to be taken in execution by any creditor, notwithstanding of this assignment to Sir James Gray, which after the late duke's death, ought no more to protect his personal estate, than it did or could do in his lifetime.
Stair B. 3. Tit. 8. & 68, 69.
By the law and custom of Scotland, creditors were preferred according to their diligence, the creditor who gave the first citation being preferred to all the rest. But in the year 1662, the Lords of Session, considering that creditors, living at a distance, were often without any fault or delay of theirs excluded by the prior diligence of creditors, who lived near to the deceased, and thereby got quicker intelligence of his death, did therefore make an act of a sederunt settling a rule, that all creditors giving citations within six months of the death of the debtor, should be preferred pari passu. But if the creditor did not come forward in that time, the Lords of Session thought he deserved no relief; and therefore after the expiration of that time, the old law still takes place, and creditors are preferred according to the priority of their citations; and vigilantibus jura subveniunt. Were it otherwise the executor might prefer Whom he pleased by insisting on dilatory
Page: 487↓
The commissaries could not by the forms of their Court, admit the appellant into the respondent's action before them; every person who has a just claim, and brings his action, gets a separate decree against the executor; but though the commissaries had granted this request, it could have been of no service, the preference depending upon the date of the citation.
The appellant dated, that Sir James obtained a decree of the commissaries on the same day that the respondent obtained his: but the interlocutor which the appellant points at, is that of the 17th of July, sustaining process at her husband's instance; and the respondent had obtained an interlocutor of the same nature with that upon the 4th of July, and upon the 17th, he obtained a further judgment, finding the libel proved, and decerning to pay, which is what neither Sir James, nor the appellant ever obtained; so that in effect, the appellant has no decree of the proper court in her favour. Nor could the Lords of Session upon the multiple poinding have given her such a decree; for in that action they can prefer no creditor, unless such creditor have a decree constituting his debt against the executor, or an action pending before the Court of Session for that end, neither of which the appellant ever had: whereas the respondent has a final decree of the Commissary Court of the 21st of July 1722, constituting his debt against the executor; and so has not only the first citation, but also the first and only decree.
Judgment, 1 April, 1724.
After hearing counsel, It is ordered end adjudged that the interlocutor complained of in the said appeal of the 15th of November 1723, adhering to the interlocutor of the 18th of January 1723, be reversed: And it is hereby declared, that it is the opinion of this House, “ that the appellant in virtue of her diligence is entitled to a proportionable share, with the respondent of the personal estate, and executry of James late Duke of Hamilton, and that the appellant and respondent are preferable, and be paid pari passu accordingly.
Counsel: For Appellant,
Ro. Dundas.
C. Wearg.
Will. Hamilton.
For Respondent,
Dun. Forbes.
C. Talbot.
In the Dictionary vol. I. p. 207. Creditors of a Defunct, the judgment of the Court of Session, though here reversed, is mentioned as an existing decision: the statement appears also to be erroneous in mentioning the case, as if the creditor who gave the last citation obtained the first decree. It is also stated by Mr. Erskine, Instit. B. 3. tit. 9. § 46.