Scottish Court of Session Decisions

Subject_1 COMPENSATION - RETENTION.
Subject_2 SECT. XV.

Concursus Debiti et Crediti.

The Creditors of Mr William Clark, Advocate, and John Keith, their Factor,
v.
Mr David Dewar, Advocate

Date: 6 November 1697
Case No. No 123.

An adjudger infeft pursued for mails and duties. Compensation was not sustained to a tenant upon a debt due to him by his master, against whom the adjudication was led.

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The Creditors of Mr William Clark, advocate, and John Keith their factor, pursue Mr David Dewar, advocate, for the sum of 400 merks, as some years rent of a dwelling-house, pertaining to the said Mr William and his creditors, and possessed by the said Mr David; and the libel being referred to his oath, he deponed in these terms, acknowledging the possession and the quota of the mail; but adjected this quality, that he had become cautioner for the said Mr William, to the Faculty of Advocates, for 600 merks he had borrowed from them on bond, and on distress had paid it, and so craved compensation. It was alleged, The defence of compensation could not be received, neither by way of quality, nor otherwise; because the creditors standing infeft in this tenement on their adjudications, no debt due by Mr William Clark, their debtor, who is denuded in manner foresaid, can compense, or meet their right to the mails and duties of their own lands. Answered for Mr David, That he seeing Mr Clark in possession, was not obliged to know whether he was denuded or not; nor is a tenant bound to go and seek the registers for a creditor's infeftment, unless they be interpelled and put in mala fide by a citation of mails and duties, or a poinding of the ground, or by an arrestment at the creditor's instance; and compensation is as favourable as bona fide payment, which would have liberate and exonered Mr David if he had paid to Mr William Clark. The Lords considered in this case there was a great difference between bona fide payment and compensation; for, in the first case, both the favour of tenants and solution sustains the payment, though made to the wrong hand, if there was a probable ground of mistake; but, in compensation, there must be a true creditor as well as a debtor before it can take place; but here Mr William Clark being denuded by the creditor's diligence, perfected by infeftment, (though no process was thereon raised against the tenants), Mr Clark ceased to be a true creditor to Mr Dewar for the house rent, and consequently Mr Clark's debt cannot compense the same.——The Lords repelled the compensation, arid preferred the creditors; else bankrupts might easily disappoint their creditors by granting bonds to their tenants, or obligements that they retain their rents till they be paid of such a sum; which ought not to militate against singular successors: Then Mr Dewar's procurators craved the creditors might assign him to their diligences pro tanto for his relief.——The Lords thought this unreasonable, unless to come in after their whole debts were satisfied and paid, but not to bring him in pari passu with themselves.

Fol. Dic. v. 1. p. 166. Fountainhall, v. 1. p. 790.