United Kingdom House of Lords Decisions

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SCOTTISH_HoL_JURY_COURT

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(1828) 3 W&S 75

CASES DECIDED IN THE HOUSE OF LORDS, ON APPEAL FROM THE COURTS OF SCOTLAND, 1828.

2 d Division.

No. 6.

William Burridge Cabbell, Cashier to the Glasgow Bank Company, Appellant.—Bosanquet—Spankie—Fullerton

v.

James Brock, (Newbigging and Company's Trustee), Respondent.—Sol.-Gen. Hope—Adam—T. H. Miller

May 13. 1828.

Lord Cringletie.

Subject_Title to Pursue — Lease — Assignation in Security. —

A mercantile company, in possession of a lease of a printfield, having borrowed money from a private Bank, and granted an assignation of the lease in security to the Bank, which was intimated to the landlord; and the Bank having thereupon granted a sub-lease to the company, who remained in possession, and paid the rents; and no possession having been taken by the Bank; and the Court of Session having held, in a question with the trustee on the sequestrated estate of the company, that the assignation was not effectual against the creditors; and the Bank having appealed in name of the office-bearers;— Question raised, but not decided, 1. Whether they had any title to appear; and, 2. A remit made to take the opinions of all the Judges on the merits.

By two separate deeds of tack in 1800 and 1801, James Buchanan, Thomas Hopkirk and Company, (of whom, among others, Archibald Newbigging was a partner), merchants in Glasgow, obtained certain portions of the lands and estate of Denovan, from the proprietor, Johnston of Alva, on lease for 100 years, with the right, liberty, and privilege of using the same as a printfield, bleachfield, &c. The leases were taken to the Company, and to the partner or partners who might be assumed, and to their heirs, assignees, and subtenants whomsoever, “but for whom always the original tenants shall continue bound.” Having entered into possession, the company converted the premises into a bleachfield and printfield, built houses, erected and placed extensive machinery and utensils, and furnished the subjects with every implement essential to the proposed operations. In 1806 this company was dissolved, and in January 1807 they assigned the whole premises to Archibald Newbigging, and his heirs and assignees. ^* This assignation was recorded in March

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* In the question which arose, it was maintained by the opposite party, that there was satisfactory evidence in the case, that this assignation was taken solely for the

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1808. In September 1807 Archibald Newbigging formed a company with John Newbigging and Peter Scott, who had also been partners of the previous company. These parties entered into possession of the subjects, made extensive additions and alterations on the buildings and machinery, and carried on the works. In 1809, the company requiring a cash-credit, obtained one from Kensington, Styan and Adams, of London. The bond for this credit, and assignation of the leases in security, were granted solely by Archibald Newbigging, and the leases were declared redeemable by him, his heirs and assignees. This deed was recorded in the same year. Kensington, Styan, and Adams having failed, and the money having been called up, Newbigging and Company required pecuniary assistance in another quarter. They therefore entered into a transaction with the Glasgow Bank Company, for the advance of L.7000; and for an after sum of L.5000, if required. This was effected by an assignation on the 12th March 1816, by Newbigging and Company, which, after describing the leases, and the assignation to Archibald Newbigging, proceeds:—

“And seeing that the partners of the company carrying on business under the name and firm of the Glasgow Bank Company, have, by the hands of William Burridge Cabbell, Esq. banker in Glasgow, their cashier, and from the funds of the said banking company, instantly advanced and paid to us, the said Archibald Newbigging, John Newbigging, and Peter Scott, as partners foresaid, for the use of the said company of Archibald Newbigging and Company, the sum of L.12,000 sterling, of which sum receipt, &c.; therefore we, and each of us, as individuals and partners foresaid, have sold and assigned, as we and each of us, of one advice and consent, do hereby sell, alienate, assign, &c. from us, and each of us, and one and each of our heirs, executors, and successors, to and in favour of William Burridge Cabbell, cashier, and Robert Brown, accountant, for themselves, and as trustees for the other partners of the Bank, and to the assignees and subtenants of the said William Burridge Cabbell, and Robert Brown, and survivor of them, and the heir of the said survivor, absolutely and irredeemably, not only All and Whole the two tack rights, &c. with full right to the possession, use, and disposal of the subjects, grounds, and buildings, and others therein described,
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behoof of the company. On the other hand, it was contended, that there was no foundation whatever for this averment.

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for all terms and years thereof to run from and after the date thereof, in so far as we, or any of us, or our foresaids, had, have, or can pretend right thereto in any manner of way, But also the whole of the buildings, machinery, printing utensils, and others erected by and belonging to us, or any of us, in said company of Archibald Newbigging and Company, in or upon the subjects set; together with the said tacks,”

&c. On the other hand, the Bank obliged themselves, by acceptance, to relieve Newbigging and Company of the tack-duties and other obligations payable by or incumbent on the tenants by the terms of the original leases. Of the same date Archibald Newbigging and Company granted their promissory-note for L.7000, at twelve months, to Messrs Muir and Johnstone, and on their indorsation it was discounted by the Bank, who retained the discount of L.350. Also of the same date Newbigging and Company wrote to Mr Johnstone, the landlord,—“In consequence of a considerable part of our funds being for the present locked up in the hands of several houses here, (Glasgow), who have suspended payment, we have made an application to our bankers for a temporary loan upon our works at Denovan, which loan they have granted to us in the handsomest manner. The forms of law, however, require that this measure, although only of a temporary nature, must be intimated to you, and our partner, Mr Scott, will wait on you for that purpose. Although we find that our funds are by present wants to be withdrawn for a time from the business, our own prospects are, that they will be restored in good time, under no greater ultimate loss than from L.1000 to L.2000.” On the 14th March 1816 this assignation was intimated to Mr Johnstone. The notarial instrument then taken bears, “that the said assignation was duly and legally intimated, and that the said James Johnstone, and his heirs and successors, should be liable to the said William Burridge Cabbell and Robert Brown, for themselves, and as trustees foresaid, and their foresaids, in performance of the whole conditions and obligations incumbent on him and them by the foresaid tack, and should be bound to consider them as in all respects his lawful tenants in the subjects in time coming, in terms of the said tack and assignation, and should not pretend ignorance thereof.” Mr Johnstone wrote on the deed, “The foregoing assignation intimated to me at Alva, 14th March 1806. James Johnstone.” And an entry, acknowledging the assignees, was made in his book by his agent or factor. On the 15th March the following missives were

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interchanged between the Bank and Newbigging and Company:

“Messrs Archibald Newbigging and Company. Gentlemen, —We, as assignees to the tacks thereof, hereby offer and agree to subset to you the printfield, ground, houses, and machinery at Denovan, as presently occupied by you, for the space of one year from this date, at the subrent of per annum, over and besides the whole rent and others payable to Mr Johnstone, the landlord, and others, for the same, which, with all taxes, burdens, and duties whatever affecting the property or possession, you are to pay and fulfil, as well as to uphold and keep the whole buildings, fences, machinery, in good order and repair; and having by our cashier, Mr William Burridge Cabbell, signed this missive, written by William Lang, writer in Glasgow, at Glasgow the 15th March 1816, we are, &c. for the Glasgow Bank Company, (signed) W. B. Cabbell.”

—“To the Glasgow Bank Company. Gentlemen,—We do hereby accept of the offer expressed in the above letter, subscribed by your cashier; and obliging ourselves to pay and fulfil the rents, taxes, and obligations therein mentioned or referred to, have subscribed this missive, written by me Archibald Newbigging, at Glasgow this 13th March 1816. (Signed) Archibald Newbigging and Company.” Of the same date Cabbell and Brown, on behalf of the Bank, granted their back-bond to Archibald Newbigging and Company, which, after narrating the leases and different transmissions thereof, proceeded, “And also considering, that although the said disposition and assignation in our favour proceeds on the narrative of the said Glasgow Bank Company having, by the hands of me, the said William Burridge Cabbell, their cashier, actually advanced and paid the sum of L. l2,000 sterling from the funds of the said Banking Company to the said Archibald Newbigging, John Newbigging, and Peter Scott, for the use of the said Company of Archibald Newbigging and Company, for and in consideration of the said assignment; yet we hereby declare, that the same was only granted, and the said tacks and others disponed, by the said Archibald Newbigging, John Newbigging, and Peter Scott, in security of the punctual repayment, in the first place, of the sum of L.7000, and interest to become due thereon, contained in and due by a promissory-note, of date the said 12th March current, and payable twelve months after date, granted by the said Archibald Newbigging and Company to William Johnstone, Hugh Muir, and Robert Hugh Muir, merchants in Glasgow, and indorsed by the three payees to the said Glasgow

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Banking Company for the said sum of L.7000 sterling, advanced by that Company to the granter; and, in the second place, in security and for payment of such other sums or balance as the said Archibald Newbigging and Company are, or shall become owing to the said Banking Company, in account or credit with the latter, not exceeding in all the said sum of L.12,000 sterling, including the contents of the said promissory-note.” And this clause followed, binding the Bank to denude “in favour of the said Archibald Newbigging, &c. and their foresaids, of the said disposition and assignation in our favour, and of the tacks and others above-mentioned, thereby conveyed, and for that purpose to grant, subscribe, and deliver, on the expenses of the grantees, to and in favour of the said Archibald Newbigging and Company, and the individual partners thereof, a formal retrocession, assignation, and reconveyance of the said tack and others.” It was also declared, that in case Johnstone, Muir, or Hugh Muir, or their heirs or successors, paid the L.7000, then the retrocession should be granted in their favours, for the better enabling them to operate their relief, they being in fact merely cautioners for Archibald Newbigging and Company. When the bill of L.7000 fell due, it was renewed, the Bank deducting discount; and this mode of operation continued until July 1819, by which time the Bank, in consequence of increased advances, were creditors of Archibald Newbigging and Company for L.6648.10s. 5d. more. In the meanwhile, Archibald Newbigging and Company remained in possession of their premises,—paid the rent as usual to Mr Johnstone, and all the burdens and taxes affecting the Denovan works,—and received receipts in the same terms as before. The Bank never paid any rent to the landlord; nor did Archibald Newbigging pay rent to the Bank, unless it were possible to consider the discount on their various bills as rent. The Company made extensive additions to the moveable stock of utensils, and to the buildings; and insured the works in their own names. Accordingly, Mr Johnstone, in the course of the following summer, in letting them an additional portion of land in the neighbourhood of Denovan, designated them “tenants of the printfield of Denovan;” and the evidence predominated, that the rent received from them by the landlord, was never considered by him as paid on the part of the Bank. Neither did the Bank ever take natural possession of the subjects; nor was any instrument of possession executed, or inventory made up, of the machinery and utensils.

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In July 1819 Archibald Newbigging and Company became bankrupt, were sequestrated, and Walter Brock appointed trustee. On receiving this information, the landlord intimated to the Glasgow Banking Company, that he held them liable for the current and future rents of the printfield, and other property of Denovan, possessed by Archibald Newbigging and Company, in terms of the intimated assignation. The trustee entered into the natural possession of the premises; paid the rents, and performed the obligations incumbent on the bankrupts as those fell due. The Bank, learning that he proposed to dispose of the machinery and utensils, presented a bill of suspension and interdict, which was passed, and interim interdict granted. The Lord Ordinary, when the letters were expede, suspended simpliciter, and continued the interdict; and afterwards adhered, “reserving to the trustee to demand from the Bank the value of any addition made to the machinery existing at the date of their assignment thereto, which additions may be considered separate from, and extensions of what formerly existed, if such additions there be; and to the Bank their defences against paying such value, and also their claim against the trustee, to put the machinery in the order stipulated by the lease.” The trustee now raised an action of declarator against the Bank, stating, that the pursuer, in his character of trustee, had entered into and taken possession of the whole subjects contained in the leases, and of the whole buildings, machinery, materials, utensils, furniture, and other articles which had been erected, furnished, and fitted up thereon, and had continued to possess the same, paying to the landlord the proper rents at the usual terms, and defraying the burdens and charges connected with the property; that when about to realize, as trustee, the said whole subjects and others, he had been molested and interrupted by the Glasgow Bank Company and the cautioners, “who, without any proper or legal title fairly completed and made up in their persons, but on the faith alone of some simulate and colourable title, privately and improperly concocted by them, and never published or completed in a legal sense, nor, in fact, at all acted upon in any real shape whatever, and, at any rate, ineffectual in law, and altogether different from the one pretended to be entered into between them and the said Archibald Newbigging and Company, falsely and injuriously, and to the great prejudice of the sequestrated estate, and the interest of the creditors, pretend that the whole right to the foresaid leases, and the use and possession of the subjects thereby let, together with the right to possess all buildings,

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and the property of the machinery, materials, &c. and the articles of whatever kind or denomination, is now completely and absolutely vested in them, to the entire and utter exclusion of the pursuer as trustee foresaid;” and concluding, that it should be found and declared, “that the pursuer (as trustee foresaid) has the only good and undoubted right, not only to the two tacks, and whole terms and years still to run, and to the free use and enjoyment and disposal of the subjects therein described, but also to the value and right of possession of the whole buildings, and to the property of the whole machinery, materials, utensils, furniture, and other articles of whatever description or denomination, situated upon the said subjects or others at Denovan aforesaid, in so far as the said original tenants had, or would have had right thereto, if no such pretended assignation had ever been made; together with the said tacks and other relative writings, &c.; and that the said William Burridge Cabbell and Robert Brown, whether for themselves, or for and in name and in behalf of the said Glasgow Banking Company, or as trustees for the whole partners of the said Bank, or in whatever other character they pretend right to the foresaid leases, subjects, and others; as also the said William Johnstone and Robert Hugh Muir, before designed, have no right or title to the same, and that the said defenders should be decerned to cease from molesting or interrupting the pursuer as trustee aforesaid in the free use and enjoyment, &c. in all time coming.”

The Lord Ordinary conjoined the processes, adhered in the suspension, and assoilzied in the declarator. On advising petition and answers, the Court, on the 15th November 1821, altered, and found, that under the whole circumstances of this case, the assignation founded on cannot be effectual against the trustee for the creditors of the cedents; and therefore, in the suspension, found the letters orderly proceeded, and in the declarator decerned in the terms of the libel; and on the 29th November 1822 adhered. ^*

The Bank appealed in name of their office-bearers, and when their Counsel began to argue the merits,

Solicitor-General Hope, (for the respondents), objected, That there were no proper parties to the appeal. ^† It was presented in the names of “William Burridge Cabbell, cashier, and Robert Brown, accountant to the Glasgow Banking Company, for and

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* 2. Shaw and Dunlop, No. 54.

† This discussion occurred in 1825.

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on behalf of that Company, and William Johnstone of Grange, and Robert Hugh Muir, merchant in Glasgow, cautioners for Archibald Newbigging and Company to the said Bank.” But they have no royal charter, and are not an incorporated body, and therefore had no persona standi.

Bosanquet (for the appellants).—The appeal is by two individuals, in their own names, for and on behalf of the Glasgow Banking Company, and of William Johnstone and Robert Hugh Muir, cautioners for Archibald Newbigging to the Bank. Although others may have a beneficial interest, these parties have a similar interest in their own right. If this were an appeal merely on the part of the Bank, the want of a charter might be fatal. But that is not the case. The assignation is to William Burridge Cabbell, cashier, and Robert Brown, accountant, for themselves, and as trustees for the other partners of the Bank. These individuals do not appear merely in their official capacity, but as trustees having important interests. Besides, here are the two cautioners, who have clearly an interest; for if the suspension fail, they must bear the loss.

Solicitor-General.—The object of an incorporating charter is to enable the corporate body to sue and be sued by a trustee. But this cannot be gained merely by a declaration in the Bank contract, that a trustee may sue and be sued. If the interlocutors are affirmed, execution might be attempted to be stayed on this very ground, that the proper parties were not in the field. The cautioners here are not interested in the assignation. Before they have a legal interest of any kind, they must shew that they are distressed. Their present interest is too remote and indirect. They are merely cautioners for due payment of the bills; but they have no title to sue until the Bank assigns to them a right to pursue.

Lord Gifford.—In the declarator I see little difficulty. It is directed against the appellants, as individuals, and also against the Company; but in the suspension, you sue on behalf of the Company.

Fullerton (for the appellants).—The case is not different from having sued for A and B, and certain others who are interested. The question truly is, whether or not the appellants come forward for the Company. The suspension and interdict merely apply to the machinery, and not to the lease. Besides, the suspension and interdict is good as far as concerns the two individual cautioners. They have certainly both a good title and a good interest; at any rate, the declarator is properly instituted.

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Lord Gifford.—Observe, the appellants have appealed not in their individual character. Could this House allow the case to proceed as being in the name of the cautioners? I consider, that in the declarator you come here as assignees to the tack; but in the suspension the Company are at the Bar. The case is certainly materially different from that of the Commercial Bank against Pollock. ^* Counsel may therefore proceed, and this objection which has been raised, shall be considered before delivering judgment.

Counsel having been fully heard,—

Lord Gifford said,—I am not yet satisfied on the question of form. The Company appears in the suspension; the individuals in the declarator. But the appeal is brought on behalf of the Company. No doubt, there are also the cautioners.

Solicitor-General.—They have not paid. They have not been distressed, and cannot therefore be parties.

Fullerton.—Still they would have a good title to appear. They have been called as defenders, and are they not entitled to defend themselves?

Lord Gifford.—I am unwilling to turn you out, if you could get the matter amended. But how can you separate these actions? If the suspension is ill brought, and in it you find great difficulty in supporting the judgment, and the declarator well brought, can we still decern in the latter?

Fullerton.—We submit that your Lordships can. Such proceeding is adopted every day.

Solicitor-General.—But observe, no defences were given in for the parties called in the declarator; and can they who were never parties below become parties here?

Fullerton.—If the House can allow the matter to be remedied, there is nothing in the objection that they did not appear in the declarator. If they did not appear it was a judgment in absence, and they have an interest to appeal. Whether the appeal has been taken formally, is a different thing.

Lord Gifford.—The difficulty is, whether Cabbell and Brown have been so before the Court below, as to be parties here.

The consideration of the cause was then put off; but at the same time it was ordered, that the appellants be at liberty to apply for leave to amend their appeal. They accordingly by

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* See postea, 28th July 1828.

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petition prayed to “have leave to amend their said appeal, by stating your petitioners, the said William Burridge Cabbell and Robert Brown, as appellants, for themselves, and as trustees for the individual partners of the said Bank; and, if necessary, that your Lordships might make such order in regard to the said William Johnstone and Robert Hugh Muir, the cautioners, as to your Lordships might seem proper.” The appeal committee ordered the matter of the petition to be argued by one Counsel on each side at the Bar of the House. Some delay was created by abatement of the appeal by the death of Walter Brock, the respondent, and the revival in the name of James Brock. In the meanwhile, the statute 7. Geo. IV. c. 67. was passed, to regulate the mode in which Scotch Banking Companies may sue and be sued. But this Act provides, that nothing therein contained should in any way affect any question which may be in dependence before any Court of law at the passing of the Act. Both parties, however, having agreed to waive this saving clause, a petition was presented, (William Burridge Cabbell having, in terms of the statute, been registered as the individual by whom the Company was to sue or to be sued), praying that the case might be restored to its place and be heard; which prayer was granted. Counsel were then heard during the present session fully on the merits; but, as no decision was pronounced on them, and a remit was made to the Court of Session to review their judgments, it is unnecessary to give the arguments.

Lord Chancellor.—The point in this case is similar to the one raised in Breadalbane against Russell. That case Lord Gifford moved to be remitted to the Court of Session, to be reviewed generally, &c. ^* The question went back, but the case was disposed of on other grounds than the point of law. ^† I think, therefore, that your Lordships ought to be of opinion that the same course should be pursued here.

The House of Lords accordingly “ordered and adjudged, that the cause be remitted back to the Court of Session in Scotland, to review generally the interlocutors complained of in the said appeal: And it is further ordered, that the Court to which this remit is made, do require the opinion of the Judges of the other Division, and of the Lords Ordinary, on the matters and questions of law in this case stated in writing, which Judges of the other Division and Lords Ordinary are so to give and

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* 1. Wilson & Shaw, 28th June 1825.

† 5. Shaw & Dunlop, No. 433.

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communicate the same; and, after so reviewing the interlocutors complained of, the said Court are to do and decern in this cause as may be just.”

Appellants' Authorities.—Stair's Inst. 3. 1. § 1. 6.; Bankton's Inst. 3. 1. § 2. 6.; Ersk. Inst. 3. 5. § 2. 3.; Wallace, Nov. 16. 1750, (2805.); Douglas, June 6. 1794, (2802.); Yeaman, Feb. 2. 1813, (Fac. Coll.); Ersk. Inst. 2. 6. §23.; Bell on Leases, (Edit. 1805.) p. 361.; Bell's Comm. vol. i. p. 51.; Chambers on Leases; Barnwell and Alderson's Rep. 514.; Turnbull, June 12. 1751, (868.); Bell's Comm. vol. ii. p. 614.; Arkwright, Dec. 3. 1819, (Fac. Coll.)
Respondent's Authorities.—Craig, 2. 10. 9.; Dirleton, 223. 295–6.; M'Kenzie's Observations, p. 37.; Mack. Inst. 2. 6. 5. and 8.; Stair's Inst. 2. 9. 4. and 7.; 2. 3. 2. 6.; Bank. Inst. 2. 9. 3, 4.; Ersk. Inst. 2. 6. 25.; Bell on Leases, 346. 354.; Bell's Comm. vol. i. p. 5. 51. 86. 187.; Stair's Inst. 3. 1. 8.; and 2. 3. 27.; Ross's Lectures, vol. ii. p. 386. 506.; Kilkerran, voce Competition, p. 145.; Russell's Conveyancing, p. 6. 23.; Elchies' Decisions, voce Tack, No. 17.

Solicitors: Richardson and Connell— Moncreiff, Webster, and Thomson,—Solicitors.

1828